SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 2009
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 000-52828
DIGITAL DEVELOPMENT PARTNERS, INC.
-------------- -----------------------------------
(Exact name of registrant as specified in its charter)
Nevada 98-0521119
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
17800 Castleton St., Suite 300
City of Industry, California 91748
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(Address of Principal Executive Office) Zip Code
Registrant's telephone number, including Area Code: (626) 581-0388
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ]
Indicate by check mark whether the registrant (1) has filed all reports 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. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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 [ ] 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 Act): [ ] Yes [X] No
The aggregate market value of the voting stock held by non-affiliates of the
Company on June 30, 2009 was -0-.
As of March 15, 2010, the Company had 85,970,665 issued and outstanding shares
of common stock.
Documents incorporated by reference: None
1
ITEM 1. BUSINESS
The Company was incorporated in December 2006. During the period from its
incorporation through March 15, 2010 the Company has not generated any revenue.
In January 2007 the Company leased ten mining claims from an unrelated
third party. These claims were located in Piute County, Utah. The mining lease
was for a twenty-year term and required the Company to pay a royalty to the
lessor equal to 2.5% of the net smelter returns from the sale of any minerals
extracted from the claims. Minimum royalty payments of $4,500 were also required
each year during the term of the lease.
On November 1, 2008 the mining lease was terminated by the mutual
agreement of the Company and the lessor.
Between November 2008 and March 2009 the Company did not conduct any
business.
On January 15, 2009 Jeffrey A. Collins purchased 1,500,000 shares of the
Company's common stock from Consultants & Risk Management, Inc. At that time,
the 1,500,000 shares purchased by Mr. Collins represented approximately 42% of
the Company's common stock and Consultants & Risk Management, Inc. was
controlled by the Company's sole officer and director, Richard Shea.
Contemporaneous with the sale, Richard Shea resigned as an officer and director
of the Company and Jeffrey Collins was appointed as the sole officer and
director of the Company.
On May 19, 2009 Jeffrey Collins, the Company's sole director:
o in accordance with Section 78.207 of the Nevada Revised Statutes,
approved a resolution approving a 3-for-1 forward stock split and
increasing the Company's authorized capitalization to 225,000,000
shares of common stock; and
o in accordance with Section 92A.180 of the Nevada revised statutes,
approved a resolution changing the Company's name to Digital
Development Partners, Inc.
Prior to May 19, 2009 the Company had an authorized capitalization of
75,000,000 shares of common stock and had 3,625,000 outstanding shares of common
stock. Following the forward split, the Company had 10,875,000 outstanding
shares of common stock.
The forward stock split and the name change became effective on the OTC
Bulleting Board on June 29, 2009.
On August 3, 2009 the Company acquired all of the outstanding shares of
4gDeals, Inc. for 15,495,000 shares of the Company's common stock. At the time,
Isaac Roberts was the President and a director of 4gDeals and Ravikumar
Nandagopalan was the Secretary, Treasurer and a director of 4gDeals.
2
In connection with the acquisition:
o Jeffrey Collins resigned as the Company's sole officer and director;
o Isaac Roberts was appointed the Company's President and a director;
o Ravikumar Nandagopalan was appointed the Company's Secretary and
Treasurer and a director;
o Jeffrey Collins sold 4,500,000 shares (as adjusted for the June 2009
forward stock split) of the Company's common stock to Isaac Roberts
for a nominal price; and
o the Company issued Mr. Collins a warrant which allows Mr. Collins to
acquire up to 2,000,000 shares of the Company's common stock at a
price of $1.00 per share at any time prior to June 1, 2014. These
warrants were subsequently assigned by Mr. Collins to unrelated third
parties.
Between September 30 and November 4, 2009 the Company sold 216,000 Units
to private investors at a price of $0.75 per Unit. Each Unit consisted of one
share of the Company's common stock, one Series A Warrant and one Series B
Warrant.
Each Series A Warrant entitles the holder to purchase one share of the
Company's common stock at a price of $1.00 per share. Each Series B Warrant
entitles the holder to purchase one share of the Company's common stock at a
price of $1.25 per share. The Series A and B Warrants expire on September 30,
2014.
In November 2009 the Company issued 100,000 shares of its common stock in
consideration for an option to acquire TopFloor Studios LLC. TopFloor Studios is
a privately held company engaged in website design.
On December 18, 2009 James McMahon was appointed the Company's Chief
Operating Officer and a director.
On December 18, 2009 4gDeal's articles of incorporation were amended to
change the name of 4gDeals to YuDeal, Inc.
YuDeal is developing a software based network which will allow
restaurants, merchants and service providers to send text messages to customers
advising the customer of discounts or other promotional offers. Through YuDeal's
network, the customer will be able to accept or counter the restaurant, merchant
or service provider's offer until the restaurant, merchant or service provider
agree on a new discount or promotional offer. The text message containing the
agreed upon discount or promotional offer will contain a code that will allow
the customer to obtain the discount or promotional offer. Establishments using
this network will be able to notify customers rapidly of discounts and
promotional offers and will avoid the time and cost of publishing the discount
or promotional offer in newspapers, or other traditional forms of media
including the internet.
3
In February 2010 the Company determined that its existing capital
structure would impair its ability to raise the capital required to further the
development of YuDeal's network. Accordingly, the Company adopted a
reorganization plan which:
o involved the distribution of its shares in YuDeal to the Company's
shareholders; and
o the acquisition of new line of technology which has the prospect of
being the core of a commercially viable business.
Consistent with its reorganization plan, on February 18, 2010 the
Company's directors approved an agreement between the Company and EFT Biotech
Holdings, Inc. ("EFT"), whereby EFT agreed to assign its worldwide distribution
and servicing rights to a product known as the "EFT-Phone" in exchange for
79,265,000 shares of the Company's common stock.
Aside from its "EFT-Phone", EFT distributes 25 nutritional products, 18
personal care products, an environmentally friendly automotive product, an
environmentally friendly house cleaner and a portable drinking container which
contains a filter to remove impurities.
EFT markets its products through a direct sales organization. Once a
customer of EFT's makes a minimum purchase of $300 (plus $30 for shipping and
handling fees), the customer becomes an "Affiliate". As of March 15, 2010, EFT
had approximately 980,000 Affiliates, a majority of which are located in China
and Hong Kong.
EFT's common stock trades on the OTC Pink Sheets under the ticker symbol
"EFTB."
The EFT-Phone consists of a cell phone which uses the Microsoft Operating
System. The phone will be manufactured by Noble Oriental Technology Co., Ltd.
The EFT-Phone has an application that will allow EFT's affiliate base to access
all of their back office sites including their Funds Management Account where
the affiliate will be able to deposit, withdraw and transfer money to another
EFT account or to another EFT Affiliate at no cost for the transfer. The
EFT-Phone will have educational applications and PowerPoint presentation
capability for recruiting and training new Affiliates anywhere in the world.
The worldwide distribution and servicing rights to the EFT-Phone include
the right to sell the EFT-Phone to EFT's affiliates and others. Servicing
includes the collection of service fees for all EFT-Phones worldwide, including
monthly fees, usage fees, as well as call forwarding, call waiting, text
messaging and video fees. The Company also acquired the rights to distribute all
EFT-Phone accessories.
In connection with the agreement between the Company and EFT:
o Isaac Roberts resigned as the Company's President and a director;
o Ravikumar Nandagopalan resigned as the Company's Secretary, Treasurer
and a director;
o James McMahon resigned as the Company's Chief Operating Officer and a
director; and
4
o Jack Jie Qin was appointed as the Company's sole director.
As part of its reorganization plan, the Company:
o assigned its option to purchase TopFloor Studios LLC to YuDeal in
exchange for 2,580,066 shares of YuDeal's common stock, and
o the following persons exchanged all of their shares of the Company's
common stock for shares of YuDeal's common stock:
Shares of Company's Shares of YuDeal's common stock
common stock exchanged received in exchange for shares
for name shares of YuDeal of the Company's common stock
------------------------- -------------------------------
Isaac Roberts 16,295,925 1,629,593
Ravikumar Nandagopalan 3,499,125 349,913
Christopher Killen 199,950 19,995
Ty Hallock 100,000 10,000
Following the transactions described above, the Company owned 670,565
shares of YuDeal. These 670,565 shares will be distributed to the Company's
shareholders, with the exception of EFT which will not participate in the
distribution, on the basis of one share of YuDeal for every ten outstanding
shares of the Company's common stock owned. YuDeal plans to sell shares of its
capital stock to fund its operations. Accordingly, the 670,565 shares of YuDeal
which will be distributed to the Company's shareholders are expected to
represent less than 10% of YuDeal's outstanding shares.
The Company plans to manufacture and begin the marketing of approximately
5,000 EFT-Phones by May 30, 2010. The Company estimates that each EFT-Phone will
cost approximately $200 to manufacture.
The Company is in the development stage and has not generated any revenue.
The Company needs capital to implement its business plan. The Company will
attempt to raise capital through the private sale of its common stock or other
securities.
General
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As of March 15, 2010 The Company did not have any full time employees.
ITEM 2. DESCRIPTION OF PROPERTY
See Item 1 of this report.
5
ITEM 3. LEGAL PROCEEDINGS.
-----------------
The Company is not involved in any legal proceedings and the Company does
not know of any legal proceedings which are threatened or contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
---------------------------------------------------
Not Applicable.
ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
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OTHER SHAREHOLDER MATTERS.
--------------------------
Although the Company's common stock has been quoted on the OTC Bulletin
Board under the symbol "CYIM" between November 7, 2007 and June 29, 2009, and
under the symbol "DGDM" since June 29, 2009, as of March 15, 2010 there was no
public trading market for the Company's common stock.
Trades of the Company's common stock, should a market ever develop, will
be subject to Rule 15g-9 of the Securities Exchange Act of 1934, which rule
imposes certain requirements on broker/dealers who sell securities subject to
the rule to persons other than established customers and accredited investors.
For transactions covered by the rule, brokers/dealers must make a special
suitability determination for purchasers of the securities and receive the
purchaser's written agreement to the transaction prior to sale. The Securities
and Exchange Commission also has rules that regulate broker/dealer practices in
connection with transactions in "penny stocks". Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in that security is provided by the exchange or system). The penny
stock rules require a broker/ dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk disclosure
document prepared by the Commission that provides information about penny stocks
and the nature and level of risks in the penny stock market. The broker/dealer
also must provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker/dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker/dealer and salesperson compensation information, must be given to the
customer orally or in writing prior to effecting the transaction and must be
given to the customer in writing before or with the customer's confirmation.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for the Company's common stock.
As of March 15, 2010 the Company had 85,970,665 outstanding shares of
common stock and 19 shareholders of record.
As of March 15, 2010 the Company had 2,000,000 outstanding warrants and
216,000 Series A and Series B outstanding warrants.
6
The 2,000,000 warrants allow the holders to purchase one share of the
Company's common stock at a price of $1.00 per share at any time on or before
June 1, 2014.
Each Series A Warrant entitles the holder to purchase one share of the
Company's common stock at a price of $1.00 per share. Each Series B Warrant
entitles the holder to purchase one share of the Company's common stock at a
price of $1.25 per share. The Series A and B Warrants expire on September 30,
2014.
As of March 15, 2010 6,705,665 shares of the Company's common stock were
freely tradable. The remaining outstanding shares (79,265,000) are owned by EFT
Biotech Holdings and may be sold pursuant to Rule 144 of the Securities and
Exchange Commission at any time after August 18, 2010
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. The Company's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
During the year ended December 31, 2009 the Company did not purchase any
shares of its common stock from third parties in a private transaction or as a
result of any purchases in the open market. None of the Company's officers or
directors, nor any of its principal shareholders purchased any shares of its
common stock from third parties in a private transaction or as a result of
purchases in the open market during the year ended December 31, 2009.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATION
The Company was incorporated in December 2006. The Company is in the
development stage and as of March 31, 2010 has never generated any revenue.
Since its inception, the Company has financed its operations through the
private sale of its common stock. The Company does not have any commitments or
arrangements from any person to provide the Company with any additional capital.
See Item 1 of this report for information concerning the Company's plan of
operation.
See Note 2 to the financial statements included as part of this report for
a description of the Company's accounting policies and recent accounting
pronouncements.
7
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS
See the financial statements attached to this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
---------------------------------------------
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
Under the direction and with the participation of the Company's
management, the Company carried out an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures as of December
31, 2009. The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in its periodic
reports with the Securities and Exchange Commission is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
regulations, and that such information is accumulated and communicated to The
Company's management, including its principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure. The Company's disclosure controls and procedures are designed to
provide a reasonable level of assurance of reaching its desired disclosure
control objectives. Based upon this evaluation, management concluded that the
Company's disclosure controls and procedures were effective as of December 31,
2009.
Management's Report on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting and for the assessment of the
effectiveness of internal control over financial reporting. As defined by the
Securities and Exchange Commission, internal control over financial reporting is
a process designed by, or under the supervision of The Company's principal
executive officer and principal financial officer and implemented by The
Company's Board of Directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of The Company's financial statements in accordance with U.S.
generally accepted accounting principles.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
The Company's management evaluated the effectiveness of its internal
control over financial reporting as of December 31, 2009 based on criteria
established in Internal Control - Integrated Framework issued by the Committee
8
of Sponsoring Organizations of the Treadway Commission, or the COSO Framework.
Management's assessment included an evaluation of the design of The Company's
internal control over financial reporting and testing of the operational
effectiveness of those controls.
Based on this evaluation, The Company's management concluded that The
Company's internal control over financial reporting was effective as of December
31, 2009.
There was no change in The Company's internal control over financial
reporting that occurred during the year ended December 31, 2009 that has
materially affected, or is reasonably likely to materially affect, The Company's
internal control over financial reporting.
Management's report was not subject to attestation by The Company's
independent registered public accounting firm pursuant to temporary rules of the
SEC that permit The Company to provide only management's report on internal
control in this report.
ITEM 9B. OTHER INFORMATION
-----------------
Not applicable.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
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Name Age Position
---- --- --------
Jack Jie Qin 49 President, Secretary, Chief Financial Officer and
Director
The directors of the Company serve in such capacity until the annual
meeting of the Company's shareholders and until their successors have been duly
elected and qualified. The officers of the Company serve at the discretion of
the Company's directors.
The principal occupation of the Company's officer and director during the
past several years is as follows:
Mr. Qin (age 49) has been EFT BioTech Holding, Inc. President, Chief
Executive Officer and the Chairman of its Board of Directors since November
2007. Since 2002, Mr. Qin has been the President of EFT Inc. From July 1998 to
December 2002, Mr. Qin was the President of eFastTeam International, Inc.
located in Los Angeles, California. Between June 1992 and December 1997 Mr. Qin
was the President of LA Import & Export Company, also located in Los Angeles,
California. In May 1991, Mr. Qin earned an MBA degree from Emporia State
University. In May 1982, Mr. Qin graduated from Jiangxi Engineering Institute in
Nanchang, China with a major in Mechanical Engineering.
The compensation the Company plans to pay Mr. Qin, and the time he plans
to devote to the Company's business, have not yet been determined.
9
The Company does not have a compensation or an audit committee. The
Company does not have a financial expert.
None of the Company's directors are independent as that term is defined in
section 803 of listing standards of the NYSE AMEX.
The Company has not adopted a Code of Ethics applicable to its principal
executive, financial, and accounting officers and persons performing similar
functions. The Company does not believe it requires a Code of Ethics since its
only has one officer.
Changes in Management
- ---------------------
The following shows the changes in the Company's management since its
inception:
Appointed (A)
to or
Resigned (R) Positions Appointed to
Date Name from Position or Resigned From
---- ---- ------------- ----------------------
12/22/06 John Sutherland A President, Principal Financial
Officer, Secretary and Director.
9/09/08 John Sutherland R President, Principal Financial
Officer and Secretary.
9/09/08 Stephen Clevett A President, Principal Financial
Officer, Secretary and a
Director.
9/12/08 John Sutherland R Director
9/24/08 Stephen Clevett R President, Principal Financial
Officer, Secretary and a
Director.
9/24/08 Robert Shea A President, Principal Financial
Officer, Secretary and a
Director.
1/16/09 Robert Shea R President, Principal Financial
Officer, Secretary and Director.
1/16/09 Jeffrey Collins A President, Principal Financial
Officer, Secretary and Director.
8/03/09 Jeffrey Collins R President, Principal Financial
Officer, Secretary and Director.
8/03/09 Isaac Roberts A President and Director
8/03/09 Ravikumar Nandagopalan A Secretary, Treasurer and Director
12/18/09 James McMahon A Chief Operating Officer and
Director
10
2/18/10 Isaac Roberts R President and Director
2/18/10 Ravikumar Nandagopalan R Secretary, Treasurer and Director
2/18/10 James McMahon R Chief Operating Officer and
Director
2/18/10 Jack Jie Qin A Officer and Director
Compensation Committee Interlocks and Insider Participation.
- -----------------------------------------------------------
The Company's director acts as its compensation committee. During the year
ended December 31, 2009, the Company's sole officer was not a member of the
compensation committee or a director of another entity, which other entity had
one of its executive officers serving as a director of the Company or as a
member of the Company's compensation committee.
ITEM 11. EXECUTIVE COMPENSATION
The following table shows the compensation paid or accrued during the two
years ended December 31, 2009 to the executive officers of the Company. No
officer of the Company has ever received compensation in excess of $100,000 per
year.
All
Other
Annual
Stock Option Compen-
Name and Principal Fiscal Salary Bonus Awards Awards sation
Position Year (1) (2) (3) (4) (5) Total
- ------------------ ------ ------ ----- ------ ------ ------- -----
Robert Shea 2009 - - - - - -
Chief Executive 2008 - - - - - -
Officer (9-08 to
1-09)
Jeffrey Collins 2009 - - - - - -
Chief Executive
Officer
(1-09 to 8-09)
Isaac Roberts 2009 $24,000 - - - - $24,000
Chief Executive
Officer
(8-09 to 2-10)
Ravikumar Nandago- 2009 - - - - - -
Palan, Secretary
and Treasurer (8-09
to 2-10)
James McMahon 2009 - - - - - -
Chief Operating
Officer
(12-09 to 2-10)
(1) The dollar value of base salary (cash and non-cash) received.
11
(2) The dollar value of bonus (cash and non-cash) received.
(3) During the periods covered by the table, the value of the Company's shares
issued as compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table.
(5) All other compensation received that the Company could not properly report
in any other column of the table.
See Item 10 of this report regarding changes in the Company's management.
The Company does not have employment agreements with any of its officers.
The compensation the Company plans to pay Mr. Qin, and the time he plans to
devote to the Company's business, have not yet been determined.
Long-Term Incentive Plans. The Company does not have any pension, stock
appreciation rights, long-term incentive or other plans and has no intention of
implementing any of these plans for the foreseeable future.
Employee Pension, Profit Sharing or other Retirement Plans. The Company
does not have a defined benefit, pension plan, profit sharing or other
retirement plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. The Company's directors did not receive any
compensation for their services as director during the fiscal year ended
December 31, 2009.
Stock Option and Bonus Plans
- ----------------------------
The Company has not adopted any stock option or stock bonus plans.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
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RELATED STOCKHOLDERS MATTERS
----------------------------
The following table lists, as of March 15, 2010, those persons owning
beneficially 5% or more of the Company's common stock, the number and percentage
of outstanding shares owned by each director and officer of the Company and by
all officers and directors as a group. Unless otherwise indicated, each owner
has sole voting and investment powers over his shares of common stock.
Name and Address Number of Shares Percent of Class
- ---------------- ---------------- ----------------
EFT Biotech Holdings, Inc. 79,265,000 92%
17800 Castleton St., Suite 300
City of Industry, California 91748
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
See Item 1 of this report.
12
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
--------------------------------------
John Kinross-Kennedy audited the Company's financial statements for the
years ended December 31, 2009 and 2008. The following table shows the aggregate
fees billed to the Company during the years ended December 31, 2009 and 2008 by
Mr. Kinross-Kennedy.
2009 2008
---- ----
Audit Fees $3,000 $2,000
Audit-Related Fees $ 900 $ 900
Financial Information Systems -- --
Design and Implementation Fees -- --
Tax Fees -- --
All Other Fees -- --
Audit fees represent amounts billed for professional services rendered for
the audit of the Company's annual financial statements and the review of the
Company's interim financial statements. Before Mr. Kinross-Kennedy was engaged
by the Company to render these services, the engagement was approved by the
Company's Directors.
ITEM 15. EXHIBITS
--------
Exhibit
Number Exhibit Name
- ------- ------------
3.1 Articles of Incorporation *
3.2 Bylaws *
10.1 Mining Lease *
31 Rule 13a-14(a) Certifications
32 Section 1350 Certifications
* Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form SB-2 (File # 333-145951).
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: the Board of Directors and Shareholders
The Company Development Partners Inc.
I have audited the accompanying balance sheet of Digital Development Partners
Inc. as of December 31, 2009 and 2008, and the related statements of operations,
and of cash flows for the years ended 2009 and 2008 and the period from
inception (December 22, 2006) to December 31, 2009. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (placecountry-regionUnited States). Those standards
require that I plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. I believe that my
audit provide a reasonable basis for my opinion.
In my opinion, based on my audit, the financial statements referred to above
present fairly, in all material respects, the financial position of Digital
Development Partners Inc. as of December 31, 2009 and 2008 and the results of
its operations, and its cash flows for the years ended December 31, 2009 and
2008 and the period from inception (December 22, 2006) to December 31, 2009 in
conformity with United States generally accepted accounting principles.
The Company's financial statements are prepared using accounting principles
generally accepted in the placecountry-regionUnited States of America applicable
to a going concern, which contemplates the realization of assets and liquidation
of liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. In addition, the Company
has a deficit accumulated in the development stage of $228,039 as at December
31, 2009. These factors raise substantial doubt concerning the Company's ability
to continue as a going concern. The ability of the Company to continue as a
going concern is dependent on the Company obtaining adequate capital to fund
operating losses until it becomes profitable. However, management
cPersonNameannot provide any assurances that the Company will be successful in
accomplishing any of its plans. If the Company is unable to obtain adequate
capital, it could be forced to cease development of operations. The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
The Company has determined that it is not required to have, nor was I engaged to
perform, an audit of the effectiveness of its documented internal controls over
financial reporting.
/s/ John Kinross-Kennedy
John Kinross-Kennedy
Certified Public Accountant
CityplaceIrvine, StateCalifornia
February 24, 2010
1
DIGITAL DEVELOPMENT PARTNERS INC..
(A Development Stage Company)
Consolidated Balance Sheet
as at December 31,
2009 2008
------------ ------------
ASSETS
Current Assets
Cash $ 21,561 $ 3,409
Stock Option 100,000 -
------------ ------------
121,561 3,409
Other Assets
Goodwill 5,000 -
------------ ------------
$ 126,561 $ 3,409
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 100,000 $ -
Note Payable - 225
------------ ------------
100,000 225
------------ ------------
Stockholders' Equity
Common Stock, $0.001 par value; authorized
225,000,000 shares; issued and outstanding
10,875,000 shares as at December 31, 2008,
26,586,000 shares as at December 31, 2009 26,586 10,875
Additional Paid-In Capital 228,014 51,625
Deficit accumulated during the development
stage (228,039) (59,316)
------------ ------------
Total Stockholders' Equity 26,561 3,184
------------ ------------
$ 126,561 $ 3,409
============ ============
The accompanying notes are an integral part of these financial statements.
2
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
For the For the Period
Year Ended of Inception
December 31, Jan. 1, 2007
---------------------- to Dec. 31,
2009 2008 2009
---------- ---------- -------------
Revenue $ - $ - $ -
Cost of Sales - - -
---------- ---------- ----------
Operating Income - - -
---------- ---------- ----------
General and Administrative
Expenses:
Mining Leases - 6,650 15,650
Consulting 89,129 11,119 119,731
Professional Fees 61,175 3,525 67,651
Licenses & Permits - 325 750
Project Related Costs 3,004 - 3,004
Transfer Fees 2,623 - 2,623
Other Administrative Expenses 12,792 1,634 18,630
---------- ---------- ----------
Total General and
Administrative Expenses 168,723 23,253 228,039
---------- ---------- ----------
Net Loss $(168,723) $ (23,253) $(228,039)
========== ========== ==========
Loss Per Common Share:
Basic and Diluted $ (0.010) $ (0.002)
========== ==========
Weighted Average Shares
Outstanding, Basic and
Diluted: 17,341,411 10,875,000
========== ==========
The accompanying notes are an integral part of these financial statements.
3
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
For the For the Period
Year Ended of Inception
December 31, Jan. 1, 2007
-------------------------- to Dec. 31,
2009 2008 2009
------------ ------------ ------------
Cash flows from operating activities:
Net loss $ (168,723) $ (23,253) $ (228,039)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Non cash issue of stock for
investment 9,000 14,000
Change in operating assets and
liabilities:
Accounts payable, accrued
liabilities (225) 125
------------ ------------ ------------
Net cash (used by) operating
activities (159,948) (23,128) (214,039)
------------ ------------ ------------
Cash flows from investing activities
Investment in stock option (9,000) (9,000)
Investment in Subsidiary (5,000) (5,000)
------------ ------------ ------------
Net cash (used by) investing
activities (14,000) - (14,000)
------------ ------------ ------------
Cash flows from financing activities:
Common stock issued for cash 167,000 219,500
Contributed Capital 100 5,000 5,100
Subscriptions Received
Warrants issued for cash 25,000 25,000
------------ ------------ ------------
Net cash provided by financing
activities 192,100 5,000 249,600
------------ ------------ ------------
Net increase (decrease) in cash 18,152 (18,128) 21,561
Cash, beginning of the period 3,409 $ 21,537 -
------------ ------------ ------------
Cash, end of the period $ 21,561 $ 3,409 $ 21,561
============ ============ ============
Supplemental cash flow disclosure:
Interest paid $ - $ - $ -
============ =========== ============
Taxes paid $ - $ - $ -
============ =========== ============
The accompanying notes are an integral part of these financial statements.
4
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity
(Unaudited)
Deficit
Common Stock Accumulated Total
---------------------- Additional during the Shareholders'
Number of Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
---------- ---------- --------- ------------ ------------
Inception, January 1, 2006 - $ - $ - $ - $ -
Common stock issued for cash,
Jan. 10, 2007 @ $0.01 per share 4,500,000 4,500 10,500 15,000
Common stock issued for cash,
May, 2007 @ $0.02 per share 3,975,000 3,975 22,525 26,500
Common stock issued for cash,
June, 2007 @ $0.02 per share 2,400,000 2,400 13,600 16,000
Net loss for the year ended
December 31, 2007 (36,063) (36,063)
------------ ---------- ---------- ---------- ----------
Balances, December 31, 2007 10,875,000 $ 10,875 $ 46,625 $ (36,063) $ 21,437
Capital contributed
Nov. 26, 2008 5,000 5,000
Net loss for year ended
Dec.31, 2008 (23,253) (23,253)
------------ ---------- ---------- ---------- ----------
Balances, December 31, 2008 10,875,000 $ 10,875 $ 51,625 $ (59,316) $ 3,184
Capital contributed
August 1, 2009 100 100
Stock Issued for purchase
of subsidiary Aug 3, 2009
@ $0.0033/share 15,495,000 15,495 (10,495) 5,000
Sale of warrant @ $25,000
Aug.3, 2009 25,000 25,000
Common stock issued for cash
Dec 31, 2009 @ $0.75 per share. 216,000 216 161,784 162,000
Net loss for year ended
Dec.31, 2009 (168,723) (168,723)
------------ ---------- ---------- ---------- ----------
Balances, December 31, 2009 $26,586,000 $ 26,586 $ 228,014 $(228,039) $ 26,561
============ ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
5
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
1. Basis of Presentation and Nature of Operations
The accompanying audited consolidated financial statements have been prepared by
Digital Development Partners Inc. "the Company". The consolidated financial
statements include our accounts and those of our subsidiary, YuDeal, Inc. All
inter-company balances have been eliminated in consolidation.
These audited consolidated financial statements as of and for the year ended
December 31, 2009 reflect all adjustments which, in the opinion of management,
are necessary to fairly state the Company's financial position and the results
of its operations for the periods presented.
Organization
- ------------
The Company was incorporated as Cyprium Resources, Inc. under the laws of the
State of Nevada December 22, 2006. The Company was originally formed for mineral
exploration in the United States. On May 19, 2009 the name was changed to The
Company Development Partners, Inc.
Current Business of the Corporation
- -----------------------------------
On January 15, 2007 the Company entered into a 20 year lease agreement with the
owner of 10 mining claims situated in Utah, known as the King claims. The lease
was maintained current through September 30, 2008, however mining activities
were limited. The lease was terminated by mutual agreement in November 2008.
On August 3, 2009 the Company acquired all of the outstanding stock of 4gDeals
Inc., a private Nevada corporation, through the issue of 15,495,000 shares of
the Company's common stock. 4gDeals Inc. changed its name in 2009 to Yu Deal
Inc. It is a development stage company soliciting merchants for contracts for
the use of its web based system for issuing coupons to customers on-line.
On November 11, 2009 the Company purchased an option to buy all the membership
interests in Top Floor Studio Inc., a private Pennsylvania limited liability
corporation, through the issue of 100,000 shares of Company stock to the
principal of Top Floor Studio. Top Floor Studio, a web design company, is
working with YuDeal Inc. on web marketing of YuDeal's product.
Change in Officers and Directors
- --------------------------------
The following assumed the offices of President, Chief Financial Officer,
Secretary and Director in turn, on the dates indicated:
6
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
Stephen H. Cleven September 9, 2008
Robert Shea September 24, 2008
Jeffrey A. Collins January 15, 2009
Isaac Roberts August 3, 2009
On January 15, 2009 Jeffrey A. Collins purchased 4,500,000 shares of the
Company's common stock (after conversion to 3-for-1 split shares), from
Consultants' Risk Managers, Inc., a corporation controlled by Mr. Shea. The
shares represented approximately 42% of the outstanding shares of common stock.
Mr. Collins then became the sole officer and director of the Company. On August
3, 2009 Mr. Collins sold his shares to Isaac Roberts for a nominal price, and
Isaac Roberts assumed the offices held by Mr. Collins. Mr. Collins was granted a
warrant which allows the holder to acquire 2,000,000 shares of common stock of
the Company at a price of $1.00 per share at any time prior to June 1, 2014. In
the same transaction Mr. Collins tendered $25,000 to the Company in payment.
2. Summary of Significant Accounting Policies
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 of assets and
liabilities at the date of the financial statements, and reported amounts of
revenue and expenses during the reporting period. Actual results could differ
materially from those estimates. Significant estimates made by management are,
among others, realizability of long-lived assets and deferred taxes.
Cash and equivalents
- --------------------
Cash and equivalents include investments with initial maturities of three months
or less.
Fair Value of Financial Instruments
- -----------------------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 107, "Disclosures About Fair Value of
Financial Instruments." SFAS No. 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate that
value. The carrying amounts of the Company's financial instruments as of
December 31, 2009 approximate their respective fair values because of the
short-term nature of these instruments. Such instruments consist of cash, stock
option, accounts payable and accrued expenses. The fair value of related party
payables is not determinable.
7
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
Income Taxes
- ------------
The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the tax basis of assets and
liabilities and their financial reporting amounts based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company generated a deferred tax credit through net operating loss
carryforward. However, a valuation allowance of 100% has been established, as
the realization of the deferred tax credits is not reasonably certain, based on
going concern considerations outlined as follows.
Recent Accounting Pronouncements
- --------------------------------
In May, 2009, the FASB issued SFAS No. 165, Subsequent Events, which established
general accounting standards and disclosure for subsequent events. In accordance
with SFAS No. 165, the Company has evaluated subsequent events through the date
the financial statements were filed.
In June, 2009, the FASB issued SFAS No. 168 - The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No. 162. SFAS 168 establishes the FASB Accounting
Standards Codification as the single source of authoritative US generally
accepted accounting principles recognized by the FASB to be applied to
nongovernmental entities. SFAS 168 is effective for financial statements issued
for interim and annual periods ending after September 15, 2009. The adoption of
SFAS 168 will not have an impact on the Company's financial position, results of
operations or cash flows.
Going Concern
- -------------
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The ability of the Company
to continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease development of
operations.
8
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish its plans to engage a working interest
partner, in order to eventually secure other sources of financing and attain
profitable operations. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amount and classifications or liabilities or other adjustments
that might be necessary should the Company be unable to continue as a going
concern.
Development-Stage Company
- -------------------------
The Company is considered a development-stage company, with limited operating
revenues during the periods presented, as defined by Statement of Financial
Accounting Standards ("SFAS") No. 7. SFAS. No. 7 requires companies to report
their operations, shareholders deficit and cash flows since inception through
the date that revenues are generated from management's intended operations,
among other things. Management has defined inception as January 1, 2007. Since
inception, the Company has incurred an operating loss of $228,039. The Company's
working capital has been generated through the sales of common stock and
warrants. Management has provided financial data since January 1, 2007,
"Inception" in the financial statements, as a means to provide readers of the
Company's financial information to make informed investment decisions.
Basic and Diluted Net Loss Per Share
- ------------------------------------
Net loss per share is calculated in accordance with SFAS 128, Earnings Per Share
for the period presented. Basic net loss per share is based upon the weighted
average number of common shares outstanding. Diluted net loss per share is based
on the assumption that all dilative convertible shares and stock options were
converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, options and warrants are assumed exercised at the
beginning of the period (or at the time of issuance, if later), and as if funds
obtained thereby were used to purchase common stock at the average market price
during the period.
As of December 31, 2009 the Company has potentially dilutive securities in
outstanding warrants for the purchase of 2,432,000 shares of common stock. Since
the Company is in a loss position the warrants are anti-dilutive and not
considered in the calculation.
The following is a reconciliation of the numerator and denominator of the basic
and diluted earnings per share computations for the years ended December 31,
2009 and 2008:
9
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
2009 2008
---- ----
Numerator:
---------
Basic and diluted net loss per share:
Net Loss $ (168,723) $ (23,253)
Denominator
-----------
Basic and diluted weighted average
number of shares outstanding 17,341,411 10,875,000
Basic and Diluted Net Loss Per Share $ (0.010) $ (0.002)
------------------------------------
3. Stock Option
On November 11, 2009 the Company entered into an Agreement with the principal of
Top Floor Studio, L.L.C. to purchase an option to buy 100% of the membership
interests in Top Floor Studio L.L.C. for 100,000 shares of the Company's common
stock. The option grants the right to the Company to buy said membership
interests at a strike price paid in 200,000 shares of the Company's common
stock, until November 15, 2011. The Company was also granted the right to use,
without charge, the office space Top Floor Studio, L.L.C. until the option
expires. The option was valued at $100,000 based on the market value of the
Company's stock on the date the Agreement was executed, recorded as a payable on
that date. Top Floor Studio is a private Pennsylvania limited liability company
in the business of web design and marketing.
4. Capital Stock
Creation and Sale of a Warrant. Related Party Transaction.
- -----------------------------------------------------------
On May 21, 2009 the sole director approved a resolution establishing a warrant
for the purchase of common stock. The director purchased the warrant for
$25,000. The warrant entitles the holder to purchase up to 2,000,000 shares of
common stock of the Company at a price of $1.00 per share for a period of 5
years.
Forward Stock Split
- -------------------
On June 29, 2009 a 3-for-1 forward stock split was effected and the Company's
authorized capitalization increased from 75,000,000 shares to 225,000,000 shares
of common stock.
10
Digital Development Partners Inc.
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
Common Stock Issues
- -------------------
On August 3, 2009 the Company issued 15,495,000 shares of common stock to the
stockholders of 4gDeals Inc. in payment for 100% of the outstanding stock of
4gDeals. The payment price was $5,000, based on the value of the Company's
stock, in turn based on Net Asset Value. By this means 4gDeals became a wholly
owned subsidiary of the Company. 4gDeals changed its name in 2009 to YuDeals
Inc.
On December 31, 2009 the Company sold 216,000 shares to three investors at $0.75
per share, realizing $162,000. Each share was accompanied by two warrants:
- A Series A warrant, entitling the holder to purchase one share of the
Company's common stock at a price of $1.00 per share, expiring September
30, 2014.
- A Series B warrant, entitling the holder to purchase one share of the
Company's common stock at a price of $1.25 per share, expiring September
30, 2014.
As at December 31, 2009 the Company was authorized to issue 225,000,000 common
shares, of which 26,686,000 were issued and outstanding.
4. Forward Stock Split
Prior year financial statements have been restated to reflect the 3-for-1 stock
split of June 29, 2009.
5. Subsequent Event
In January 2010 the Company issued 100,000 shares of common stock to the
principal of Top Floor Studio Inc. in payment for the option to buy all the
membership interests of that company pursuant to an agreement signed November
11, 2009.
11
SIGNATURES
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 29th day of March 2010.
DIGITAL DEVELOPMENT PARTNERS, INC.
By /s/ Jack Jie Qin
-----------------------------------
Jack Jie Qin, President, Principal
Financial Officer and Principal Accounting
Officer
Pursuant to the requirements of the Securities Act of l934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Title Date
/s/ Jack Jie Qin
- --------------------- Director March 29, 2010
Jack Jie Qin
DIGITAL DEVELOPMENT PARTNERS, INC.
ANNUAL REPORT ON FORM 10-K
EXHIBITS