New Asia Holdings, Inc. - Quarter Report: 2012 March (Form 10-Q)

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[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March  31, 2012
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to __________
	Commission File Number:  333-165961

Nevada	45-0460095
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

P.O. Box 2458 Walnut Creek, CA

(Address of principal executive offices)

925-943-2090

(Registrant’s telephone number)

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

[ ] Large accelerated filer Accelerated filer	[ ] Non-accelerated filer
[X] Smaller reporting company

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4T:	Controls and Procedures	14
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	15
Item 1A:	Risk Factors	15
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3:	Defaults Upon Senior Securities	15
Item 4:	Mine Safety Disclosures	15
Item 5:	Other Information	15
Item 6:	Exhibits	15

 

Our financial statements included in this Form 10-Q are as follows:
F-1	Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (unaudited) ;
F-2	Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011 (unaudited);
F-3	Consolidated Statement of Stockholders’ Equity as of March 31, 2012 (unaudited);
F-4	Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (unaudited); and
F-5	Notes to Consolidated Financial Statements.

 

DM Products, Inc. And Subsidiaries
Consolidated Balance Sheets
(Unaudited)
	March 31, 2012				December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents		15,936				26,089
Royalties Receivable		6,407				15,835
Prepaid Expense		6,211				10,656
Total Current Assets		28,554				52,580
Property and Equipment - net		653				728
TOTAL ASSETS		29,207				53,308
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable		54,204				45,321
Accrued Expenses		203,653				173,653
Sales Tax Payable		2,424				2,424
Total Current Liabilities		260,281				221,398
Total Liabilities		260,281				221,398
Stockholders' Equity (Deficit)
Preferred Stock, $0.001 par value, 30,000,000 shares authorized, 0 shares issued and outstanding		-				-
Common Stock, $0.001 par value, 400,000,000 shares authorized, 273,339,011 shares issued and outstanding (282,720,684 - 2011)		273,339				282,721
Additional Paid In Capital		642,345				632,963
Accumulated Deficit		(1,420,009	)			(1,356,080	)
Total DM Products, Inc. Stockholders' Equity (Deficit)		(504,325	)			(440,396	)
Non-Controlling Interest		273,251				272,306
Total Stockholders' Equity (Deficit)		(231,074	)			(168,090	)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)		29,207				53,308

DM Products, Inc. And Subsidiaries
Consolidated Statements of Operations
(Unaudited)
		For the 3 months ended			For the 3 months ended
		March 31, 2012				March 31, 2011
Revenues
Royalty income			6,547				8,053
Total revenues			6,547				8,053
Operating expenses
Professional Fees			7,086				24,841
Salary & Wages			30,500				34,163
Consulting			5,000				9,104
General & Administrative expenses			26,944				19,249
Total operating expense			69,531				87,357
Income (Loss) from operations and before non-controlling Interest			(62,984	)			(79,304	)
Less: Income Attributable to non-controlling interest			945				1,706
Income (Loss) before income taxes			(63,929	)			(81,010	)
Provision for income taxes			-				-
Net Income (Loss)		$	(63,929	)			(81,010	)
Net Income (Loss) per common share-basic and fully diluted		$	(0.0002	)			(0.0003	)
Weighted average common shares outstanding-basic and diluted			282,205,207				239,097,352

DM Products, Inc. And Subsidiaries
Consolidated Statements of Shareholders' Equity (Deficit)
(Unaudited)
	Common Stock							Additional Paid In Capital				Non- Controlling  Interest				Accumulated Deficit				Total Shareholders' Equity (Deficit)
	Shares			Amount
Balance, December 31, 2011	282,720,684			$	282,721			$	632,963			$	272,306			$	(1,356,080	)		$	(168,090	)
Shares surrendered per settlement and release agreement	(14,863,337	)		$	(14,864	)		$	14,864											$	-
Shares issued per settlement and release agreement	5,481,664			$	5,482			$	(5,482	)										$	-
Net income (loss) for the period ended March 31, 2012	-				-				-				945				(63,929	)			(62,984	)
																	-
Balance, March 31, 2012	273,339,011			$	273,339			$	642,345			$	273,251			$	(1,420,009	)		$	(231,074	)

DM Products, Inc. And Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
		For the 3 months ended			For the 3 months ended
		March 31, 2012				March 31, 2011
Cash flows from operating activities
Net Loss		$	(62,984	)			(79,304	)
Adjustment to reconcile net loss to net cash provided (used) by operating activities:
Depreciation			75				100
Share-based compensation			-				-
Changes in operating assets and liabilities:
Royalties receivable			9,428				31,272
Prepaid Expenses			4,445				3,340
Accounts payable			8,883				11,591
Accrued Expenses			30,000				30,000
Net cash provided (used) by operating activities			(10,153	)			(3,001	)
Cash flows from financing activities
Net increase in credit card balances			-				1,172
Net cash provided by financing activities			-				1,172
Net increase (decrease) in cash			(10,153	)			(1,829	)
Cash at beginning of period			26,089				2,714
Cash at end of period		$	15,936				885
Supplemental disclosure of cash flow information:
Interest paid		$	636				344
Taxes paid		$	3,300				2,400

DM Products, Inc. And Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1: Summary of Significant Accounting Policies
Nature of Operations
DM Products, Inc.(the Company) was incorporated on March 1, 2001 as Effective Sport Nutrition Corporation. Subsequently, on April 11, 2005, the Company changed its name to Midwest E.S.W.T Corp and on December 14, 2005, it changed its name again to DM Products, Inc.
On July 18, 2005, the Company acquired Direct Success, Inc. a California Corporation in exchange for 70 % of the Company's Common Stock, making Direct Success, Inc. a wholly owned subsidiary of the Company. Midwest E.S.W.T agreed that a total of 114,851,043 shares of Restricted Common Stock were to be issued to shareholders of Direct Success, Inc.
The Company operates from Walnut Creek, California and it wholly owns Direct Success, Inc., which owns 75% of Direct Success, LLC 3,  a limited liability company formed on or about August 16, 2002. Direct Success, Inc. entered into a joint venture with Buena Vista Infomercial Corporation which owns the remaining 25% of Direct Success, LLC 3. The purpose of Direct Success, Inc. is to market products through direct response television infomercials. The companies obtain the distribution, production and licensing rights to products in exchange for royalty agreements based on the sales of the products.  The Company sets up the production, marketing and the distribution of the products.
On July 14, 2010 the Company incorporated a wholly owned subsidiary corporation, Aliano, Inc., dba Aliano Westlake Village. The purpose of this fragrance and personal care division is to create, manufacture, distribute and sell prestige fragrances and beauty related products. Effective as of July 26, 2010, Aliano Inc. entered into an agreement with Portia Entertainment Group LLC for legal services described in the agreement. As per the agreement, Portia Entertainment Group LLC is entitled to receive a fee of 5% on the Net Income earned by Aliano Inc. for celebrity endorsees introduce by Portia.
On April 8, 2010, a Form S-1 Registration Statement was completed and submitted to the Securities and Exchange Commission. The registration filing was declared effective on October 15, 2010. On April 21, 2010, an Information Statement Form 211 was submitted to the Financial Industry Regulatory Authority (FINRA) for active trading on the Over the Counter Bulletin Board (OTCBB). The filing was approved on November 09, 2010.
On December 27, 2011 the Company dissolved Aliano, Inc., dba Aliano Westlake Village since the corporation has been unsuccessful  in raising sufficient capital to commence operations. As a result of this dissolution the intercompany loan between the Company and Aliano, Inc. were written off in the respective books with no effect in the consolidated balance sheet and in the consolidated statement of operations.
Basis of Consolidation
The consolidated financial statements include the accounts of DM Products, Inc., Direct Success, Inc., Aliano, Inc. and the accounts of its 75% owned subsidiary Direct Success LLC 3. All material inter-company transactions have been eliminated.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted a December 31 fiscal year end.
Cash and Cash Equivalents
All highly liquid investments with maturities of three months or less are considered to be cash equivalents.  At March 31, 2012 and December 31, 2011, the Company had cash balances of $15,936 and $26,089, respectively.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, prepaid expense, accounts payable, sales tax payable, and other current liabilities. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates, unless otherwise disclosed in these financial statements.

Income Taxes
Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax, assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of March 31, 2012, there have been no interest or penalties incurred on income taxes.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Revenue Recognition
The Company records revenue in accordance with ASC Topic 605 - Revenue Recognition. During the year ended March 31, 2012 revenues came from royalties from the contract Banjo Minnow the fishing lure with TriStar Products, Inc. Revenues derived from the Company license sales are recognized when (1) there is evidence of an arrangement, (2) collection of our fee is considered probable, and (3) the fee is fixed and determinable.
Direct Success entered into a manufacturing, marketing and distribution agreement with Banjo Buddies, who is the inventor of Banjo Minnow, a fishing lure which Direct Success LLC 3 had a license agreement to market the product since Oct 2002. The Company entered into a modification of said agreement in April 2005. On September 30, 2011 the Company excercised their option to extend the Banjo Minnow agreement until June 30, 2012. On or about May 11, 2005,  Direct Success LLC 3, subcontracted the manufacturing and distribution rights to TriStar Products, Inc.  In March 2007, Direct Success granted back to Banjo, the right to license and privilege for internet sales and small parts sale of the product. Under the agreement, Banjo will pay Direct Success 4% royalty on all gross sales of product. As of date of settlement, effective January 1, 2010, Direct Success no longer receives the 4% royalty for internet and part sales from Banjo Buddies. The revenues are strictly based on the contractual obligation contained in the agreement with Tristar Products, Inc., which are the royalties received from the sales of the Banjo Minnow. These royalty arrangements with Tristar provide the Company with a flat $4.00 (for unit sales under $18) and $5.00 (for unit sales over $18), per unit sold domestically, and $2.50 per unit sold internationally. The present retail price for the Banjo Minnow is $19.95.
Concentration of Risk
The Company is earning (over 90%) the majority of the royalty income from Tristar Products, Inc. Since the Company is depending on Tristar Products, Inc., the inability of Tristar to perform in the future may have a material adverse effect on the Company’s financial condition.
Advertising Policy
The Company recognizes advertising expense as incurred. The advertising expense for the period ended March 31, 2012 and March 31, 2011 are $0 and $0 respectively.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2012.
Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. In 2011, 19,999,999 common shares were issued at the fair market value of $0.0015 per share totaling to $30,000. There was no stock-based compensation granted during the period ended March 31, 2012.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.  The fair value of the equity instrument is charged directly to operating expense and additional paid-in capital over the period during which services are rendered. In 2011, 22,783,333 common shares were issued at the fair market value of $0.0015 per share totaling to $34,175. There was no stock-based compensation issued to non-employees during the period ended March 31, 2012.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
Note 2: Property & Equipment
Property and equipment are carried at cost. Major expenditures and those which substantially increase useful lives are capitalized. Maintenance, repairs and minor renewals are charged to operations when incurred. When property and equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Once placed in service, depreciable assets are depreciated over their estimated useful lives using both accelerated and straight-line methods.
Depreciation expenses totaled $75 and $100 for the the period ended March 31, 2012 and  March 31, 2011, respectively.
Note 3: Prepaid Expenses
Prepaid expenses consisted of the following at March 31, 2012 and December 31, 2011:
		2012	2011
	Prepaid insurance	$                          6,211	$                                        10,656
	Total Prepaid Expenses	$                                           6,211	$                                        10,656
Note 4: Non-Controlling Interest
The Company has owned 75% of Direct Success LLC 3 (LLC 3) since 2002. The assets and liabilities of Direct Success LLC 3 have been included in these consolidated financial statements. The 25% of LLC 3 not owned by the Company has been presented as a non-controlling interest in these financial statements.
Note 5: Accrued Expenses
Accrued expenses consisted of the following at March 31, 2012 and December 31, 2011:
		2012	2011
	Accrued Wages	$                                       195,653	$                                      165,653
	Accrued directors' fees	$                                           8,000	$                                          8,000
	Total Prepaid Expenses	$                                       203,653	$                                      173,653
Wages are accrued under an employee agreement entered into on the 20th day of April, 2007 by and between the Company and its President. According to the agreement, employee's starting salary is $6,000 per month during the first 90 days following execution of the agreement or until $500,000 in capital is raised. After such period of time, employee's salary shall be increased to $10,000 per month. Should the company determine it in the best interest not to pay employee's entire monthly compensation, at any time, any such compensation shall be treated as deferred compensation and will accumulate on the books and provided to employee, at employee's sole discretion, taking into consideration the funds available and the best interest of the Company.
The accrued wages owed under the employment agreement as of March 31, 2012 and December 31, 2011, respectively, were $195,653 and $165,653.
Salary expense to the related party was $30,000 and $30,000 for the period ended March 31, 2012 and March 31, 2011, respectively.
The Board of Directors passed a resolution on October 15, 2011 to compensate Directors, Secretary, Treasurer, CEO, President and Board Chairman by issuing common stock annually. This policy is retroactive with an effective date of January 1, 2010. Per the policy the Company owed Kurtis Cockrum who is a Director, CEO, President and Board Chairman $6,000 worth of common stock, James Clarke who is a Director, Secretary and Treasurer $2,000 worth of common stock as of December 31, 2011. This amount has been recorded  as director fees at December 31, 2011.

Note 6: Related Party Transactions
The Company has entered into  a consulting contract with Michael DeBenon, Esq., a stockholder of the Company, for $6,000 per month on a month to month basis for general counsel. Legal expenses to the related party were $0 and $18,000 for the periods ended March 31, 2012 and March 31, 2011, respectively.
Note 7: Common Stock
The Company has 430,000,000 shares of capital stock, consisting of 400,000,000 shares of $0.001 par value common stock,  and 30,000,000 shares of $0.001 par value preferred stock. The Company had 273,339,011 shares of common stock issued and outstanding as of March 31, 2012 and 239,937,352 shares issued and outstanding as of March 31, 2011.
On March 26, 2012, 3,390,834 shares of $0.001 par value common stock owned by Celecia Family Trust were surrendered per a Settlement and Release Agreement.
On March 26, 2012, 3,390,834 shares of $0.001 par value common stock owned by Koontz Family Trust were surrendered per a Settlement and Release Agreement.
On March 26, 2012, 8,081,669 shares of $0.001 par value common stock owned by K & B Kerry Living Trust were surrendered per a Settlement and Release Agreement.
On March 26, 2012, 5,481,664 shares of $0.001 par value common stock were issued to Tony L. Kerry and Erika D. Kerry Revocable Trust per a Settlement and Release Agreement.
Note 8: Commitments and Contingencies
The CEO and employees of the Company work from their homes. The fair market value of rents contributed by the related parties are estimated to be $50.00 per month, which is immaterial to the Company's financial statements, and has not been recorded on the Company's books.
Note 9: Income Taxes
As of March 31, 2012, the Company had net operating loss carry forwards of approximately $1,420,009 that may be available to reduce future years’ taxable income through 2030. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for federal income tax consists of the following:
		March 31,	March 31,
		2012	2011
Federal income tax attributable to:
Current Operations		$                 21,736	$                 27,543
Less: valuation allowance		$               (21,736)	$                (27,543)
Net provision for Federal income taxes		$                           -	$                           -
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
		March 31,	December 31,
		2012	2011
Deferred tax asset attributable to:
Net operating loss carryover		$               482,803	$               461,067
Less: valuation allowance		$             (482,803)	$              (461,067)
Net deferred tax asset		$                           -	$                           -
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $1,420,009 for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, the net operating loss carry forwards may be limited as to use in future years.

Note 10: Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has sustained substantial losses since inception, has a working capital deficit, and is in need of additional capital to grow its operations so that it can become profitable.
In view of these matters, the ability of the Company to continue as a going concern is dependent upon growth of revenues and the ability of the Company to raise additional capital.  Management believes that its successful ability to raise capital and increases in revenues will provide the opportunity for the Company to continue as a going concern.
Note 11: Subsequent Events
On April 11, 2012, the Board of Directors entered into a resolution for the formation of a wholly owned subsidiary, ELK Films, Inc., a California corporation.  Articles of Incorporation were filed with the California Secretary of State on April 12, 2012.  The subsidiary has been established to become a film distribution and production company in the motion picture industry.  DM Products is currently in negotiations with experienced management personnel who have long standing relationships in theatrical placement and Print & Advertising.  The Company is also negotiating for the distribution rights to a fully produced family oriented comedy.
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2012 to the date these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose in these financial statements other than those events described above.

 

·	Complete Project Funding - The Company would obtain the exclusive licensing rights to products and pay a nominal royalty (2-5%) of gross sales to the product developer;

·	Joint Venture Projects - The Company would share costs of production, marketing and distribution and would share revenues with product developers; and

·	Straight Royalty Arrangements - The Company would partially finance the infomercials in exchange for a fixed royalty on gross sales.

 

 

 

 

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

	DM Products, Inc.
Date:	May 15, 2012
	By:       /s/ Kurtis Cockrum                                                                               Kurtis Cockrum Title:    Chief Executive Officer and Director