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EX-32 - EXHIBIT 32 SECTION 1350 CERTIFICATIONS - Digital Development Partners, Inc.dec10kexh324-11.txt
EX-31 - EXHIBIT 31 RULE 13A-14(A) CERTIFICATIONS - Digital Development Partners, Inc.dec10kexh314-11.txt

                       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, 2010
    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
 ----------------------------------         -----------------------------------
 (State or other jurisdiction               (I.R.S. Employer Identification No.)
  of incorporation or organization)

      17800 Castleton St., Suite 300
       City of Industry, California                     91748
   --------------------------------------               ------
   (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 [ ] 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, 2010 was $142,753.

As of March 31, 2011, the Company had 86,402,665 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 is manufactured by an unrelated third party. 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 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 YuDeal's common Shares of Company's stock received in exchange common stock exchanged for shares of the Company's for name shares of YuDeal 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. In April 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 is actively marketing the EFT-phones to the affiliates of EFT. The EFT-Phone has a retail price of approximately $300. As of December 31, 2010 the Company had generated only limited revenues. The Company needs capital to implement its business plan. The Company may attempt to raise capital through the private sale of its securities or loans from third parties. General As of March 31, 2011 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 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, the Company's common stock did not begin trading until June 24, 2010. Shown below are the ranges of high and low closing prices for the Company's common stock for the periods indicated as reported by FINRA. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions. Quarter Ended High Low ------------- ---- --- June 30, 2010 $ 0.18 $ 0.08 September 30, 2010 $ 0.18 $ 0.17 December 30, 2010 $ 0.19 $ 0.07 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 31, 2011 the Company had 86,402,663 outstanding shares of common stock and 10 shareholders of record. As of March 31, 2011 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 31, 2011 there was no public market for the Company's warrants. As of March 31, 2011 7,137,665 shares of the Company's common stock were freely tradable. The remaining outstanding shares, 79,265,000, are owned by a wholly owned subsidiary of EFT Biotech Holdings and may be sold pursuant to Rule 144 of the Securities and Exchange Commission. 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, 2010 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, 2010. 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. Since its inception, the Company has financed its operations through the private sale of its common stock. The Company does not have any firm 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
See Note 4 to the financial statements included as part of this report for information concerning the impairment of the Company's principal asset. 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 Management's Report on Disclosure Control 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, 2010. 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, 2010. 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. 8
The Company's management evaluated the effectiveness of its internal control over financial reporting as of December 31, 2010 based on criteria established in Internal Control - Integrated Framework issued by the Committee 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, 2010. There was no change in The Company's internal control over financial reporting that occurred during the year ended December 31, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 9B. OTHER INFORMATION Not applicable. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Name Age Position ---- --- --------- Jack Jie Qin 50 President, Secretary, Chief Executive Officer and Director William E. Sluss 55 Principal Financial and Accounting Officer 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 officers and director during the past several years is as follows: Mr. Qin has been the Company's President, Chief Executive Officer, Secretary and Director since February 2010. Mr. Qin has been EFT BioTech Holding, Inc.'s President, Chief Executive Officer and Chairman of its Board of Directors since November 2007. Since 2002, Mr. Qin has beenP 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. 9
Mr. Sluss has been the Principal Financial and Accounting Officer since January 2011. Between August 2010 and January 2011 Mr. Sluss assisted the Company with its accounting and financial reporting. Between 2008 and 2010 Mr. Sluss was the Chief Financial Officer for AcccuForce Staffing Services in Kingsport, TN. Between 2002 and 2008 Mr. Sluss was the Chief Financial Officer and Treasurer for Studsvik, Inc., a nuclear services company based in Erwin, TN. Mr. Sluss is a certified public accountant and received his Bachelor of Science degree in accounting from the University of Virginia's College at Wise (Wise, Virginia) in 1990. The Company believes that Mr. Qin's longstanding experience with EFT BioTech Holdings, and in particular with EFT's affiliate base, qualifies him to be a director. 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. Mr. Sluss devotes approximately one-third of his time to the Company and is paid an annual salary of $37,700. The Company does not have a compensation or an audit committee. Mr. Sluss serves as the Company's 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 two officers. Compensation Committee Interlocks and Insider Participation. The Company's director acts as its compensation committee. During the year ended December 31, 2010 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. 10
ITEM 11. EXECUTIVE COMPENSATION The following table shows the compensation paid or accrued during the two years ended December 31, 2010 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 ------------------ ---- ------ ----- ------- ------ -------- ------ Jack Jie Qin 2010 - - - - - - Robert Shea 2009 - - - - - - Chief Executive 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. (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. The Company has an employment agreement with William E. Sluss, the Company's Principal Financial and Accounting Officer. The employment agreement, which expires December 31, 2011, provides that Mr. Sluss will devote approximately one-third of his time to the Company and will be paid an annual salary of $37,700. 11
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, 2010. 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 RELATED STOCKHOLDERS MATTERS The following table lists, as of March 31, 2011, 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(1) 92% 17800 Castleton St., Suite 300 City of Industry, California 91748 (1) Shares are held of record by a wholly owned subsidiary of EFT Biotech Holdings. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. See Item 1 of this report. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES John Kinross-Kennedy, C.P.A,. audited the Company's financial statements for the years ended December 31, 2010 and 2009. The following table shows the aggregate fees billed to the Company during the years ended December 31, 2010 and 2009 by Mr. Kinross-Kennedy. 2010 2009 ---- ---- Audit Fees $3,000 $2,500 Audit-Related Fees $1,800 $1,400 Financial Information Systems -- -- Design and Implementation Fees -- -- Tax Fees -- -- All Other Fees -- -- 12
Audit fees and audit related 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 Digital Development Partners Inc. I have audited the accompanying balance sheet of Digital Development Partners Inc. as of December 31, 2010 and 2009, and the related statements of operations, and of cash flows for the years ended 2010 and 2009 and the period from inception, (December 22, 2006), to December 31, 2010. 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 (United 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, 2010 and 2009 and the results of its operations, and its cash flows for the years ended December 31, 2010 and 2009 and the period from inception (December 22, 2006) to December 31, 2010 in conformity with United States generally accepted accounting principles. 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 Certified Public Accountant Irvine, California March 30, 2011
DIGITAL DEVELOPMENT PARTNERS, INC. Balance Sheet as at December 31, 2010 and 2009 -------------------------------------------------------------------------------- 2010 2009 ASSETS Current Assets Cash $ 196,676 $ 21,561 Stock Option - 100,000 Pre-paid Deposit 269,128 - Loan Receivable 33,000 - ----------- ---------- 498,804 121,561 Other Assets Goodwill 5,000 5,000 ----------- ---------- $ 503,804 $ 126,561 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable and accrued liabilities $ 16,920 $ 100,000 Long Term Liabilities Loans payable (Note 5) $ 619,666 $ - ----------- ---------- Total Liabilities $ 636,586 $ 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, 2009, 86,402,665 shares as at December 31, 2010 86,403 26,586 Additional Paid-In Capital 8,281,164 228,014 Deficit accumulated during the development stage (8,500,349) (228,039) ----------- ---------- Total Stockholders' Equity (132,782) 26,561 ----------- ---------- $ 503,804 $126,561 =========== ========== The accompanying notes are an integral part of these financial statements F-1
DIGITAL DEVELOPMENT PARTNERS, INC. Statement of Operations ------------------------------------------------------------------------------- For the For the For the Period Three Months Ended Year Ended of Inception December 31, December 31, Jan. 1, 2007 ------------------ ----------------------- to Dec. 31, 2010 2009 2010 2009 2010 ---- ---- ---- ---- ---- Revenue Product Sales $ 590,400 $ - $ 691,600 $ - $ 691,600 Cost of Sales 546,120 - 653,362 - 638,620 ------------ --------- ------------- ------------- ------------ Operating Income 44,280 - 38,238 - 52,980 ------------ --------- ------------- ------------- ------------ General and Administrative Expenses: Mining Leases - - - 15,650 Advertising 20,000 - 77,383 4,290 77,383 Consulting 22,500 73,920 89,005 89,129 208,736 Professional Fees 1,400 25,158 67,726 61,175 135,377 Project Related Costs 335 - 12,620 3,004 18,081 Transfer Fees 1,777 869 3,519 2,623 7,584 Other Administrative Expenses - 12,433 14,533 8,502 44,758 Impairment loss on EFT project 8,030,492 - 8,030,493 - 8,030,492 ------------ --------- ------------- ------------- ------------ 8,076,504 112,380 8,295,279 168,723 8,538,061 ------------ --------- ------------- ------------- ------------ Net Loss from Operations (8,032,224) (112,380) (8,257,041) (168,723) (8,485,081) ------------ --------- ------------- ------------- ------------ Other Income and Expense Interest Income 71 - 782 - 782 Interest Expense (6,540) - (16,051) - (16,050) ------------ --------- ------------- ------------- ------------ (6,469) - (15,269) - (15,268) ------------ --------- ------------- ------------- ------------ Net Loss (8,038,693) $(112,380) (8,272,310) $ (168,723) (8,500,349) ============ ========== ============= ============= ============ Loss Per Common Share: Basic and Diluted $ (0.09) $ (0.00) $ (0.11) $ (0.01) ============ ========= ============= ============= Weighted Average Shares Outstanding, Basic and Diluted: 86,402,665 26,424,348 75,996,399 17,341,411 ============ ========== ============= ============= The accompanying notes are an integral part of these financial statements F-2
DIGITAL DEVELOPMENT PARTNERS, INC. Statement of Cash Flows ------------------------------------------------------------------------------- For the Period of Inception, For the Year Ended Jan. 1, 2007, December 31, to Dec. 31, --------------------------- 2010 2009 2010 ------------ ----------- -------------- Cash flows from operating activities: Net loss $ (8,272,310) (168,723) $ (8,500,349) Adjustments to reconcile net loss to net cash used by operating activities: Stock issued for asset, impaired 8,030,492 7,926,500 Balance of investment, impaired (103,992) Change in operating assets and liabilities: Pre-paid deposits (269,128) (269,128) Accounts payable and accrued liabilities (83,080) (225) 16,920 Employee Loan (33,000) (33,000) ------------- ------------- ------------- Net cash (used by) operating activities (731,018) (168,948) (859,057) ------------- ------------- ------------- Cash flows from investing activities Stock issued for EFT project Stock issued for investment in subsidiary (5,000) (5,000) Stock issued for goodwill 5,000 Option on assets exercised, cancelled 100,000 - ------------- ------------- ------------- Net cash (used by) investing activities 100,000 (5,000) - ------------- ------------- ------------- Cash flows from financing activities: Proceeds of loans 619,666 619,666 Common stock issued for cash 167,000 219,500 Common stock issued to finance services 11,467 11,467 Contributed Capital 75,000 100 80,100 Warrants issued for cash 25,000 25,000 Stock issued for debt 100,000 100,000 ------------- ------------- ------------- Net cash provided by financing activities 806,133 192,100 1,055,733 ------------- ------------- ------------- Net increase (decrease) in cash 175,115 18,152 196,676 Cash, beginning of the period 21,561 $ 3,409 - ------------- ------------- ------------- Cash, end of the period $ 196,676 $ 21,561 $ 196,676 ============= ============= ============= Supplemental cash flow disclosure: Interest paid $ - $ - $ - ============= ============= ============= Taxes paid $ - $ - $ - ============= ============= ============= The accompanying notes are an integral part of these financial statements F-3
DIGITAL DEVELOPMENT PARTNERS, INC. Statement of Stockholders' Equity For the period from Inception, (January 1, 2007), to December 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 sub-sidiary 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 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 - June, 2010 stock issued pursuant to completion of Sep. 2009 offering 432,000 432 (432) - Net loss for year ended Dec.31, 2010 (8,272,310) (8,272,310) ----------- ------- --------- ----------- ---------- Balances, December 31, 2010 86,402,665 $86,403 $8,281,164 $(8,500,349) $ (132,782) =========== ======= ========== =========== =========== The accompanying notes are an integral part of these financial statements F-4
DIGITAL DEVELOPMENT PARTNERS INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 1. Basis of Presentation and Nature of Operations The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The financial statements have, in management's opinion, been properly prepared within the reasonable limits of materiality and within the framework of the significant accounting policies summarized in Note 2. 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 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 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. 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. 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. 5
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 the cell phone company, EFT Bioteck Holding, 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. As required by the plan of reorganization, these shares were distributed to Company stockholders in March and April of 2010 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 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. 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 (FASB) issued Accounting Standards Codification (ASC) 820-10, (formerly SFAS No. 157), "Fair Value Measurements and Disclosures" for financial assets and liabilities. FASB ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The carrying amounts of the Company's financial assets and liabilities as at December 31, 2010 were measured against the three levels of inputs required by the standard to measure fair value: Loan Receivable $ 33,000 Level 2 based on promissory notes Loans Payable - $ 619,666 Level 2 based on promissory notes Income Taxes The Company utilizes ASC 740, "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 under "Going Concern" following. Recent Accounting Pronouncements In January 2010, the FASB issued ASU No. 2010-01, amending SFAS No. 168, "The FASB Accounting Standards Codification(TM) and the Hierarchy of Generally Accepted Accounting Principles." This Standard codified in ASC 105 is being modified to include the authoritative and non-authoritative levels of GAAP. This amendment is effective for financial statements issued for interim and annual periods ending after September 15, 2009. ASU No. 2010-01 has no effect on the Company's financial position, statements of operations, or cash flows at this time. In February 2010, the FASB issued ASU No. 2010-09, "Subsequent Events ( ASC Topic 855), Amendments to Certain Recognition and Disclosure Requirements." This Standard update requires a SEC Filer to (1) evaluate subsequent events through the date that the financial statements are issued or available to be issued, (2) defines "SEC Filer" as an entity that is required to file or furnish its financial statements with either the SEC or, with respect to an entity subject 7
to Section 12(i) of the Securities Exchange Act of 1934, as amended, the appropriate agency under that Section, (3) not be bound to disclosing the date through which subsequent events have been evaluated, (4) note the definition of public entity is not longer defined nor necessary for Topic 855, (5) note the scope of the reissuance disclosure requirements is refined to include revised financial statements only. These Updates are effective for interim or annual periods ending after June 15, 2010. ASU No. 2010-09 has no effect on the Company's financial position, statements of operations, or cash flows at this time. In March 2010, the FASB issued ASU No. 2010-11, "Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives" (codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves disclosures originally required under SFAS No. 161. ASU 2010-11 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this statement had no effect on the Company's reported financial position or results of operations. In April 2010, the FASB issued ASU No. 2010-17, "Revenue recognition - Milestone Method (Topic 605): Milestone Method of Revenue Recognition" (codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. ASU 2010-17 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this statement had no effect on the Company's reported financial position or results of operations. In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have any effect on the Company's reported financial position or results of operations. Development-Stage Company The Company was in the development stage prior to its year ended December 31, 2010. During fiscal 2010 principal operations began and the Company began to earn significant revenue. Accordingly, the Company was no longer in the development stage during the year ended December 31, 2010. Basic and Diluted Net Loss Per Share Net loss per share is calculated in accordance with ASC 260, 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, 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. 8
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, 2010 and 2009: 2010 2009 ---- ---- Numerator: ---------- Basic and diluted net loss per share: Net Loss $(8,272,310) $ (168,723) Denominator: ------------ Basic and diluted weighted average number of shares outstanding 75,996,399 17,341,411 Basic and Diluted Net Loss Per Share $ (0.11) $ (0.01) ------------------------------------- 3. Pre-paid Deposit September 30, December 31, 2010 2011 ------------------------------ 269,128 0 A deposit was made for the manufacture of EFT smart phones following purchase of distribution and servicing rights from EFT Bioteck Holding, Inc. in February, 2010. Cost of project, based on stock purchase: $ 8,031,492 =========== The EFT Project was recorded as the cost of acquisition of a new line of technology through the acquisition in February, 2010 of the worldwide distribution and servicing rights for the "EFT Smart Phone". This was purchased from EFT Bioteck Holding, Inc, a cell phone enterprise operating in China, including Hong Kong, by the exchange of stock. The project was analyzed at year end for impairment related to future cash flows. It was found that current projections for sales will not cover operating costs in the foreseeable future. The project was therefore considered 100% impaired and written down accordingly. 5. Loans Payable December 31, 2010 2009 ------------------------ Loan Payable - EFT Biotech $ 619,666 0 9
A promissory note was issued May 13, 2010 for $500,000 for cash received from to EFT Biotech Holdings Inc., a California corporation located in City of Industry, California. A series of additional advances from EFT Biotech followed from June to November, 2010, raising the total to $619,666. The note bears annual interest of 5%, requires no monthly payments, and matured November 13, 2010. The note was extended indefinitely. The final advance in the series of $10,000 was made after maturity on November 29, 2010. 6. Income Taxes No provision was made for federal income tax, since the Company had an operating loss and has accumulated net operating loss carryforwards. The net operating loss carryforwards may be used to reduce taxable income through the year 2025. 7. Capital Stock Common Stock Issues: 2010 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 Corporations 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. In June, 2010, 432,000 shares of Company stock were recorded as issued pursuant to completion of the September 2009 offering. As at December 31, 2010, the Company was authorized to issue 225,000,000 common shares, of which 86,402,665 were issued and outstanding. 8. Legal Proceedings There were no legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation or is involved either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. 9. Subsequent Events Events subsequent to December 31, 2010 have been evaluated through March 30, 2010, the date these statements were available to be issued, to determine whether they should be disclosed. Management found no subsequent events to be disclosed. 10
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 31st day of March 2011. DIGITAL DEVELOPMENT PARTNERS, INC. By: /s/ Jack Jie Qin ----------------------------------------- Jack Jie Qin, President 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 --------------------------- Principal Executive Jack Jie Qin Officer and Director March 31, 2011 /s/ William E. Sluss --------------------------- Principal Financial and William E. Sluss Accounting Officer March 31, 2011
DIGITAL DEVELOPMENT PARTNERS, INC. ANNUAL REPORT ON FORM 10-K EXHIBITS