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TMCNet:  DIGITAL DEVELOPMENT GROUP CORP - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

[November 19, 2012]

DIGITAL DEVELOPMENT GROUP CORP - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Edgar Glimpses Via Acquire Media NewsEdge) The following discussion should be read in conjunction with the information contained in the financial statements of The Digital Development Group Corp.

("Digital" or the "Company") and the notes which form an integral part of the financial statements which are attached hereto.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

Overview of Business Prior to July 31, 2012 Digital was incorporated under the laws of the State of Nevada on December 11, 2006 under the name of Regency Resources Inc. ("Regency"). The Company amended its Articles of Incorporation to change its name from Regency Resources, Inc. to The Digital Development Group Corp. effective May 2, 2012. Our fiscal year end is December 31. Our executive offices are located at 6630 Sunset Blvd. Los Angeles, CA, 90028.



Regency Resources was a pre-exploration stage company engaged in the acquisition and exploration of mineral properties. On February 15, 2007 l Regency Resources purchased a 100% interest in the Mara Gold Claim (the "Mara Claim") from The Mara Group LLC., an unrelated company, for $7,000. The Mara Claim consists of one 8 unit claim block containing 122.5 hectares (approximately 307 acres) located about 20 km North West of the city of Suva, in the Republic of Fiji. The Mara Claim is a gold exploration project.

On July 1, 2008, Regency Resources acquired a 100% interest in the La Trinidad Gold Claim (the "La Trinidad Claim") from an unrelated mineral exploration company, Kalibo Resources Inc., for the sum of $5,000. The La Trinidad Claim, a gold exploration project, covers approximately 94.5 hectares (233.5 acres) located 45 kilometers North East of the city of Lingayen in the Republic of the Philippines. The 'La Trinidad Claim' and the "Mara Claim" are sometimes referred to herein collectively as the "Regency Claims" We have not earned any revenues to date and we have incurred losses since inception. Our auditors have issued a going concern opinion since we must raise additional capital, through the sale of our securities, in order to fund our operations. There can be no assurance we will be able to raise this capital. We do not anticipate earning revenues until such time as we commercially launch our digital distribution aspect of Digital Development. We are presently in the pre distribution stage of our business and we can provide no assurance that we will be able to commercially exploit our programming and if we do that we will be successful,. Accordingly, we must raise cash from sources other than our operations in order to implement our business and marketing plans.

However, to date, we have been unable to raise adequate l funds to implement our operations, and we do not believe that we currently have sufficient resources to do so without additional funding. As a result of the current difficult economic environment and our lack of funding to implement our business plan, our Board of Directors has begun to analyze strategic alternatives available to our Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.

We had preliminary discussions with potential business combination partners, and on July 31, 2012, we successfully completed our voluntary share exchange with DDAC as further described below. . On April 10, 2012, the Company entered into a binding letter of intent with Digitally Distributed Acquisition Corp., a Delaware corporation ("DDAC"), in connection with a proposed reverse acquisition transaction by and between the Company and DDAC whereby the Company was to acquire all of the shares of outstanding capital stock of DDAC in exchange for the issuance of a certain ownership interest in the Company to the shareholders of DDAC, which was consummated July 31, 2012 and a Super 8K was filed.

Overview of Business Subsequent to July 31, 2012 On July 31, 2012 (the "Closing Date"), the Company closed a voluntary share exchange transaction with DDAC and the shareholders of DDAC (the "Selling Shareholders") pursuant to a Share Exchange Agreement dated July 31, 2012 (the "Exchange Agreement") by and among the Company, DDAC, and the Selling Shareholders. In accordance with the terms of Exchange Agreement, on the Closing Date, the Company issued 20,000,000 shares of its common stock to the Selling Shareholders in exchange for 100% of the issued and outstanding capital stock of DDAC (the "Exchange Transaction"). As a result of the Exchange Transaction, the Selling Shareholders acquired 21.93% of the Company's issued and outstanding common stock, DDAC became a wholly-owned subsidiary of the Company, and the Company acquired the business and operations of DDAC.

Our business is now based in Los Angeles, California where we develop technologies that provide content owners distribution capabilities across multiple platforms using existing internet protocol ("IP") services. DDAC's technology and assets are focused on the opportunity presented by over-the-top ("OTT") home entertainment media, which targets DVD players, video game consoles, Smart TVs and stand-alone internet connected devices which delivers content such as Video-on-Demand services by connecting to users' IP services.

DDAC's technology will help content owners distribute and monetize their products by delivery to OTT devices.

15 --------------------------------------------------------------------------------Comparison of Three Months Ended September 30, 2012 and September 30, 2011 and from January 25, 2012 to September 30, 2012 Since the Company completed a reverse merger in July 31, 2012 and the accounting acquirer (DDAC) inception date is January 25, 2012, there is no comparison for the same period in prior year.

Net revenue for the three months ended September 30, 2012 was $0 since the Company is still in development stage.

Operating expense for the three months ended September 30, 2012 were $1,459,517 and from January 25, 2012 (date of inception) to September 30, 2012 were 2,009,816. The expense from inception to September 30, 2012 is mainly consisted of $435,000 share based compensation, $561,828 from interest expense derived from beneficial conversion feature of new note, $136,085 interest expense in contingencies, and the remaining from payroll expense and daily operating expense for the Company.

LIQUIDITY AND CAPITAL RESOURCES Since inception Regency Resources raised the capital through private placements of common stock as follows: Since inception, on April 15, 2007 the officers and directors of the Company completed a private placement pursuant to Regulation S of the Securities Act of 1933, whereby 49,500,000 shares of common stock were sold at the price of $0.001 per share to raise $1,650. On October 31, 2008 Regency Resources completed a further private placement pursuant to Regulation S of the Securities Act of 1933, whereby 24,000,000 common shares were sold at the price of $0.05 per share to raise $40,000.

As of September 30, 2012, we had cash of $29.585 and working capital deficit of $1,115,090. The Company issued a total of $1,192,026 from note payable from January 25 (date of inception) to September 30, 2012.

Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations. As of the date of this Form 10-Q, we have not generated revenues, and have experienced negative cash flow from operations. We may look to secure additional funds through future debt, equity financings or advances from our officers and directors. These sources of financing may not be available or may not be available on reasonable terms.

From January 25, 2012 (date of inception) to September 30, 2012, net cash used from operations was $921,243. The use was primarily due to net operating losses of $2,009,816 and offset by non cash expense of $1,134,752.

From January 25, 2012 (date of inception) to September 30, 2012, net cash used in investing activities was $241,198. The use was primarily due to purchase of equipment of $34,004 and intangible assets of $207,194.

Off-balance Sheet Arrangements We have no off-balance sheet arrangements.

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