UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| Quarterly Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange
Act Of 1934
For the quarterly period ended March 31, 2010
|_| Transition Report Under Section 13 Or 15(D) Of The Securities Exchange
Act Of 1934
For the transition period from __________ to __________
Commission File Number: 000-52828
DIGITAL DEVELOPMENT PARTNERS, INC.
------------------------------------------
(Exact name of registrant as specified in its charter)
NEVADA 98-0521119
---------------------------- -------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
17800 Castleton St., Suite 300
City of Industry, CA 91748
-----------------------------------------
(Address of principal executive offices, including Zip Code)
(626) 581-3335
--------------------------------------
(Issuer's telephone number, including area code)
(Former name or former address if changed since last report)
Check whether the issuer (1) 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 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 whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small 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 [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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). Yes [ ] No [x]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 85,970,665 shares of common stock as
of May 10, 2010.
Digital Development Partners, Inc.
(A Development Stage Company)
Balance Sheet
as at
March 31, December 31,
2010 2009
------------ ------------
(Unaudited)
ASSETS
Current Assets
Cash $ - $ 21,561
Stock Option - 100,000
EFT Project 8,030,492 -
------------ ------------
8,030,492 121,561
Other Assets
Goodwill 5,000 5,000
------------ ------------
$ 8,035,492 $ 126,561
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank Overdraft $ 117 $ -
Accounts Payable - 100,000
------------ ------------
$ 117 $ 100,000
Stockholders' Equity
Common Stock, $0.001 par value; authorized
225,000,000 shares; issued and outstanding
26,586,000 shares as at December 31, 2008,
85,970,665 shares as at March 31, 2010 85,971 26,586
Additional Paid-In Capital 8,281,596 228,014
Deficit accumulated during the development
stage (332,192) (228,039)
------------ ------------
Total Stockholders' Equity 8,035,375 26,561
------------ ------------
$ 8,035,492 $ 126,561
============ ============
The accompanying notes are an integral part of these financial statements.
1
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the For the Period
Three Months Ended of Inception
March 31, Jan. 1, 2007
------------------- to Mar. 31,
2010 2009 2010
---- ---- -------------
Revenue $ 1,200 $ - $ 1,200
Cost of Sales - - -
----------- ----------- -----------
Operating Income 1,200 - 1,200
----------- ----------- -----------
General and Administrative Expenses:
Mining Leases - - 15,650
Advertising 2,383 - 2,383
Consulting 41,445 2,671 161,176
Professional Fees 35,104 500 102,755
Licenses & Permits - - 750
Project Related Costs 11,147 - 14,151
Transfer Fees - - 2,623
Other Administrative Expenses 15,274 13 33,904
----------- ----------- -----------
Total General and
Administrative Expenses 105,353 3,184 333,392
----------- ----------- -----------
Net Loss from Operations $ (104,153) $ (3,184) $ (332,192)
=========== =========== ===========
Loss Per Common Share:
Basic and Diluted $ (0.004) $ (0.000)
=========== ===========
Weighted Average Shares Outstanding,
Basic and Diluted: 26,788,473 10,875,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
For the For the Period
Three Months Ended of Inception
March 31, Jan. 1, 2007
------------------- to Mar. 31,
2010 2009 2010
---- ---- -------------
Cash flows from operating
activities:
Net loss $ (104,153) $ (3,184) $ (332,192)
Adjustments to reconcile net
loss to net cash used by operating
activities:
Non cash issue of stock for
services 11,467 11,467
Non cash issue of stock for
investment 7,926,500 7,926,500
Non cash issue of stock for
debt 100,000 100,000
Non cash issue of stock for
subsidiary 5,000
Change in operating assets and
liabilities:
Accounts payable, accrued
liabilities (100,000) (225)
----------- ----------- -----------
Net cash (used by) operating
activities 7,833,814 (3,409) 7,710,775
----------- ----------- -----------
Cash flows from investing
activities
Investment in EFT Project (8,030,492) (8,030,492)
Stock Option 100,000
Investment in Subsidiary (5,000)
----------- ----------- -----------
Net cash (used by) investing
activities (7,930,492) - (8,035,492)
----------- ----------- -----------
Cash flows from financing
activities:
Common stock issued for cash 219,500
Contributed Capital 75,000 80,100
Warrants issued for cash 25,000
----------- ----------- -----------
Net cash provided by financing
activities 75,000 - 324,600
----------- ----------- -----------
Net increase (decrease) in cash (21,678) (3,409) (117)
Cash, beginning of the period 21,561 $ 3,409 -
----------- ----------- -----------
Cash, end of the period $ (117) $ - $ (117)
=========== =========== ===========
Supplemental cash flow disclosure:
Interest
paid $ - $ - $ -
============= =========== =============
Taxes paid $ - $ - $ -
============= =========== =============
The accompanying notes are an integral part of these financial statements.
3
DIGITAL DEVELOPMENT PARTNERS, INC.
(A Development Stage Company)
Statement of Stockholders' Equity For the period
from Inception (January 1, 2007) to March 31,2010
(Unaudited)
Deficit
Common Stock Accumulated Total
------------------------------- Additional during the Shareholders'
Number of Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
--------- --------- ---------- ----------- -------------
Inception, January 1, 2007 - $ - $ - $ - $ -
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, September 30, 2009 26,586,000 $ 26,586 $ 228,014 $ (228,039) $ 26,561
Capital Contributed Feb. 2, 2010 75,000 75,000
January 5, 2010 Stock issued
for debt 100,000 100 99,900 100,000
Common Stock issued for
services @ $0.10 per share
Feb. 2, 2010 114,665 115 11,352 11,467
Stock issued per Agreement
with EFT Biotech Holdings, Inc.
Feb. 18, 2010 @ $0.10 per share 79,265,000 79,265 7,847,235 7,926,500
Common Stock returned to
Treasury and cancelled
Feb. 22, 2010 (20,095,000) (20,095) 20,095 -
Net loss for 3 mo. ended
Mar.31, 2010 (104,153) (104,153)
----------- ----------- ----------- ----------- -----------
Balances, March 31, 2010 85,970,665 $ 85,971 $8,281,596 $ (332,192) $8,035,375
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
4
DIGITAL DEVELOPMENT PARTNERS INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2010
(Unaudited)
1. Basis of Presentation and Nature of Operations
These unaudited interim financial statements as of and for the three months
ended March 31, 2010 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, in accordance with the
accounting principles generally accepted in the United States of America. All
adjustments are of a normal recurring nature. These unaudited interim financial
statements should be read in conjunction with the Company's financial statements
and notes thereto included in the Company's fiscal year end December 31, 2009
report. The Company assumes that the users of the interim financial information
herein have read, or have access to, the audited financial statements for the
preceding period, and that the adequacy of additional disclosure needed for a
fair presentation may be determined in that context. The results of operations
for the three month period ended March 31, 2010 are not necessarily indicative
of results for the entire year ending December 31, 2010. A majority of the
shares of the Company's subsidiary, YuDeal, Inc., were disposed of during the
first three months of the fiscal year. The remainder of the YuDeal shares are
earmarked for distribution to Company stockholders. The Company does not intend
to exercise its stockholder rights in the interim, therefore its minority
interest is not recorded in the financial statements. The Statement of
Operations represents combined activity during the consolidated period, to the
date of disposal of YuDeal Stock.
Organization
The Company was incorporated as Cyprium Resources, Inc. under the laws of the
State of StateplaceNevada December 22, 2006. The company was originally formed
for mineral exploration in the country-regionplaceUnited States. On May 19, 2009
the name was changed to Digital Development Partners, Inc.
Current Business of the Corporation
In January, 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 StateplaceNevada 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. YuDeal is a development stage company soliciting merchants for
contracts for the use of its web based system for issuing coupons to customers
on-line.
5
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, began
working with YuDeal, Inc. on web marketing of YuDeal's product.
On February 17, 2010 the Company adopted a reorganization plan which included:
1. Acquisition of a new line of technology through the acquisition of the
worldwide distribution and servicing rights to a cell phone enterprise
based in Hong Kong;
2. Change in management;
3. Sale of the Company's option on Top Floor Studio; 4. Distribution of the
Company's shares in YuDeal, Inc. to the
stockholders.
Accordingly on February 17, 2010 an agreement was signed with EFT BioTech
Holdings, Inc., which trades on the OTC Pink Sheets under the ticker symbol
"EFTB", and markets its "EFT-Phone" through direct marketing in China including
Hong Kong. Its distribution and servicing rights were acquired by the Company in
the agreement through the exchange of 79,265,000 shares of the Company's common
stock.
Coincidentally the management team of the Company resigned. The Company's
president, Isaac Roberts, was replaced by Jack Jie Quin, president of EFT
Biotech Holding Inc.
Pursuant to the plan, in February, 2010 the option on Top Floor Studio was
exchanged with YuDeal, Inc. for 2,480,066 shares of YuDeal common stock.
On February 22, 2010, pursuant to the plan, 2,009,501 shares of YuDeal common
stock held by the Company following the exchange with YuDeal Inc., were in turn
exchanged for Company stock owned by four stockholders of the company. These
included the former president and Secretary of the Company and the Chief
Operating Officer of Top Floor Studio, Inc. The exchange was on a 10 for 1
basis: one YuDeal share for ten Company shares. This resulted in 20,095,000
Company shares being returned to Treasury, which were then cancelled.
Following these transactions, the Company held a residual of 670,565 shares of
YuDeal Inc. According to the plan of reorganization, these shares are earmarked
for distribution to Company stockholders on the basis of one share of YuDeal,
Inc. for every ten shares of Company stock held.
2. Summary of Significant Accounting Policies
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the country-regionplaceUnited 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.
6
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 March
31, 2010 approximate their respective fair values because of the short-term
nature of these instruments. Such instruments consist of cash, accounts payable
and accrued expenses. The fair value of related party payables is not
determinable.
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.
7
Going Concern
- -------------
The Company's financial statements are prepared using accounting principles
generally accepted in the country-regionplaceUnited 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.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish its plans to eventually secure 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 $332,192. 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
Comp 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, Earning Share for
the period presented. Basic net loss per share is based Per the weighted average
number of common shares outstanding. Dilute upon loss per share is based on the
assumption that all dilative conver net shares and stock options were converted
or exercised. Dilutiosible computed by applying the treasury stock method. Under
this me is options and warrants are assumed exercised at the beginning of the
pdhod, (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 March 31, 2010 the Company has potentially dilutive securities in
outstanding warrants for the purchase of 2,666,330,000 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 three months ended March
31, 2010 and 2009:
8
2010 2009
---- ----
Numerator:
----------
Basic and diluted net loss per share:
Net Loss $(104,153) $ (3,184)
Denominator
-----------
Basic and diluted weighted average
number of shares outstanding 26,788,473 10,875,000
Basic and Diluted Net Loss Per Share $ (0.004) $ (0.000)
------------------------------------
3. Capital Stock
Common Stock Issues
- -------------------
On January 5, 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.
On February 2, 2010 the Company issued 114,665 shares of common stock for
services, at $0.10 per share, representing the market price of the stock. An
expense of $11,467 was recorded. The shares were accompanied by an equal number
of Series A and Series B warrants. The Series A warrants entitle the holder to
purchase one share of the Corporation's common stock at a price of $1.00 per
share at any time on or before September 30, 2014. The Series B warrants are
similar, the strike price being $1.25.
On February 18, 2010 the Company issued 79,265,000 shares of common stock to EFT
Biotech Holdings, Inc. pursuant to an agreement to purchase the worldwide
distribution and servicing rights of the EFT-Phone system.
On February 22, 2010, 20,095,000 shares of Company stock were returned to
Treasury and cancelled, pursuant to an agreement to exchange the stock for
2,009,501 shares of subsidiary YuDeal, Inc.
As at December 31, 2009 the Company was authorized to issue 225,000,000 common
shares, of which 85,970,665 were issued and outstanding.
4. Subsequent Events
0
670,565 Shares of YuDeal Inc. held by the Company were subsequently issued to
stockholders, per the plan of reorganization.
9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
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.
10
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.
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:
11
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 31, 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
o Jack Jie Qin was appointed as the Company's sole director.
12
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
common stock exchanged stock 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. On April 20, 2010 these 670,565 shares were distributed to the
Company's shareholders, with the exception of EFT, which did 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 were 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 31, 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.
As of April 30, 2010 the Company did not have any full time employees.
Item 4T. Controls and Procedures.
(a) The Company maintains a system of controls and procedures designed to
ensure that information required to be disclosed in reports filed or submitted
under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded,
processed, summarized and reported, within time periods specified in the SEC's
rules and forms and to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act, is
accumulated and communicated to the Company's management, including its
Principal Executive and Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. As of March 31, 2010, the Company's
Principal Executive and Financial Officer evaluated the effectiveness of the
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design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Principal Executive and Financial Officer concluded that
the Company's disclosure controls and procedures were effective.
(b) Changes in Internal Controls. There were no changes in the Company's
internal control over financial reporting during the quarter ended March 31,
2010, that materially affected, or are reasonably likely to materially affect,
its internal control over financial reporting.
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PART II
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2010 the Company issued:
o 100,000 shares of its common stock as consideration for an option to
acquire TopFloor Studios, LLC.
o 114,665 shares of its common stock to its then Chief Executive Officer
and another party for services rendered.
o 79,265,000 shares of its common stock to EFT BioTech Holdings, Inc. in
consideration of the assignment to the Company of the worldwide
distribution and marketing rights to a product known as the EFT Phone.
The Company relied upon the exemption provided by Section 4(2) of the
Securities Act of 1933 with respect to the sales above. The persons who acquired
the shares were sophisticated investors and were provided full information
regarding the Company. There was no general solicitation in connection with the
offer or sale of the shares. The persons who acquired the shares acquired them
for their own accounts. The certificates representing shares of common stock and
will bear a restricted legend providing that they cannot be sold except pursuant
to an effective registration statement or an exemption from registration.
Item 6. Exhibits
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIGITAL DEVELOPMENT PARTNERS, INC.
May 14, 2010 By: /s/ Jack Jie Qin
------------------------------
Jack Jie Qin, President and Principal
Executive, Financial and Accounting
Officer
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