U.S. 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 Three Months ended: September 30, 2014

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________ to _________

 

Commission File No. 001-32032


Dewmar International BMC, Inc.

(Name of Registrant in its Charter )


NEVADA

 

26-4465583

State or other jurisdiction of

 

(I.R.S. Employer I.D. No.)

incorporation or organization)

 

 


132 E. Northside Dr. Suite C Clinton, MS 39056

(Address of principal executive offices)


(601) 488-4360

(Registrant’s telephone number, including area code)


Indicate by check mark whether the Issuer (1) has filed all reports required 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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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). [X] Yes [  ] No

 

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 the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

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 [X] No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:


As of July 6, 2016 the registrant had 2,759,542,401 issued and outstanding shares of common stock.






Dewmar International BMC, Inc.

TABLE OF CONTENTS




PART I - FINANCIAL INFORMATION

3

ITEM 1. FINANCIAL STATEMENTS

4

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

12

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

14

ITEM 4. CONTROLS AND PROCEDURES

14

PART II - OTHER INFORMATION

15

ITEM 1. LEGAL PROCEEDINGS

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

SIGNATURES

16































2




PART I - FINANCIAL INFORMATION

 

Forward-Looking Information

 

This report on Form 10-Q contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.

 

Examples of forward-looking statements include:

 

·

the timing of the development of future products;

·

projections of costs, revenue, earnings, capital structure and other financial items;

·

statements of our plans and objectives;

·

statements regarding the capabilities of our business operations;

·

statements of expected future economic performance;

·

statements regarding competition in our market; and

·

assumptions underlying statements regarding us or our business.

 

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under Item 1.A “Risk Factors contained in the Company’s Annual Report on Form 10K for the year ended December 31, 2013. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

 

  




















3




ITEM 1. FINANCIAL STATEMENTS

 

DEWMAR INTERNATIONAL BMC, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30, 2014

 

 

December 31, 2013

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,570

 

 

$

7,231

Account receivables, net

 

 

197,487

 

 

 

9,532

Related party receivable

 

 

12,059

 

 

 

4,085

Advances to related party

 

 

9,332

 

 

 

9,332

Inventory

 

 

60,553

 

 

 

35,144

Prepaid expenses and other current assets

 

 

-

 

 

 

6,000

Total Current Assets

 

 

302,001

 

 

 

71,324

 

 

 

 

 

 

 

 

Property & equipment, net of accumulated

  depreciation of $19,873 and $14,210

 

 

21,182

 

 

 

26,845

 

 

 

 

 

 

 

 

Total assets

 

$

323,183

 

 

$

98,169

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

737,909

 

 

$

714,868

Accrued interest

 

 

14,073

 

 

 

9.707

Notes payable

 

 

173,890

 

 

 

173,890

Convertible notes payable, net of unamortized discount

  of $1,254 and $77,230, respectively

 

 

153,066

 

 

 

122,750

Derivative liability

 

 

212,828

 

 

 

151,120

 

 

 

 

 

 

 

 

Total Liabilities

 

 

1,291,766

 

 

 

1,172,335

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (NOTE 7)

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

Preferred stock; $0.001 par value; 50,000,000

  shares authorized; 50,000,000 issued and outstanding

 

 

50,000

 

 

 

50,000

Common stock; $0.001 par value; 4,450,000,000

  shares authorized, 2,759,542,401 and 2,310,488,796

  shares issued and outstanding, respectively

 

 

2,759,546

 

 

 

2,310,493

Additional paid-in capital

 

 

4,354,763

 

 

 

3,370,195

Accumulated deficit

 

 

(8,132,892)

 

 

 

(6,804,854)

Total Stockholders’ Deficit

 

 

(968,583)

 

 

 

(1,074,166)

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

$

323,183

 

 

$

98,169



The accompanying notes are an integral part of these unaudited financial statements.



4




DEWMAR INTERNATIONAL BMC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Revenue, net

 

$

234,468

 

$

46,259

 

$

457,778

 

$

222,342

Revenue, related party

 

 

-

 

 

5,379

 

 

21,924

 

 

9,984

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Goods Sold

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold-product

 

 

68,734

 

 

14,409

 

 

207,126

 

 

89,138

Gross Profit

 

 

165,734

 

 

37,229

 

 

272,576

 

 

143,188

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Occupancy and related expenses

 

 

8,999

 

 

8,613

 

 

28,248

 

 

34,867

Marketing and advertising

 

 

8,639

 

 

18,565

 

 

17,526

 

 

34,527

General and administrative expenses

 

 

217,367

 

 

205,715

 

 

1,281,143

 

 

1,516,618

Contract labor

 

 

14,266

 

 

23,235

 

 

36,661

 

 

111,003

Total Operating Expenses

 

 

249,271

 

 

256,128

 

 

1,363,578

 

 

1,697,015

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(83,537)

 

 

(218,899)

 

 

(1,091,002)

 

 

(1,553,827)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(19,380)

 

 

(70,827)

 

 

(85,687)

 

 

(195,227)

Gain (loss) on derivative liability

 

 

128,318

 

 

(50,574)

 

 

(151,349)

 

 

(157,254)

Total other income (expense)

 

 

108,938

 

 

(121,401)

 

 

(237,036

)

 

(352,481)

Net Profit / (Loss)

 

$

25,401

 

$

(340,300)

 

$

(1,328,038)

 

$

(1,906,308)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share - basic and fully diluted

$

0.00

 

$

(0.00)

 

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

 

2,802,060,227

 

 

518,813,217

 

 

2,749,415,353

 

 

279,513,432

Weighted average shares outstanding - fully diluted

 

 

2,918,213,560

 

 

518,813,217

 

 

2,749,415,353

 

 

279,513,432


















The accompanying notes are an integral part of these unaudited financial statements



5




DEWMAR INTERNATIONAL BMC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


 

 

Nine Months

Ended

 

Nine Months

Ended

 

 

September 30, 2014

 

September 30, 2013

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(1,328,038)

 

$

(1,906,308)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation expense

 

 

5,663

 

 

3,753

Stock-based compensation

 

 

993,000

 

 

932,451

Amortization of debt discount

 

 

75,976

 

 

174,120

Loss on derivative liability

 

 

151,349

 

 

157,254

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(187,955)

 

 

5,184

Related party receivables and payables

 

 

(7,974)

 

 

2,648

Inventory

 

 

(25,409)

 

 

17,649

Prepaid expenses and other current assets

 

 

6,000

 

 

1,700

Accounts payable and accrued liabilities

 

 

29,107

 

 

405,690

Net cash used in operating activities

 

 

(288,281)

 

 

(205,859)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Cash paid for purchase of vehicles

 

 

-

 

 

(19,900)

Net cash used in investing activities

 

 

-

 

 

(19,900)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from notes payable

 

 

-

 

 

199,320

Proceeds from issuance of common stock

 

 

303,620

 

 

-

Net cash provided from financing activities

 

 

303,620

 

 

199,320

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

15,339

 

 

(26,439)

Cash and cash equivalents, at beginning of period

 

 

7,231

 

 

38,388

Cash and cash equivalents, at end of period

 

$

22,570

 

$

11,949

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

3,692

 

$

10,709

 

 

 

 

 

 

 

Supplemental noncash investing and financing activities:

 

 

 

 

 

 

Issuance of common stock for conversions of notes payable

 

$

47,360

 

 

230,250

Reclassification of accounts payable to notes payable

 

$

-

 

 

334,661

Creation of debt discount

 

$

-

 

 

182,796

Reduction in derivative liability due to conversions of convertible notes payable

 

$

89,641

 

 

302,044

Reduction in common stock payable for issuance of common stock

 

$

-

 

 

199,193





The accompanying notes are an integral part of these unaudited financial statements



6




DEWMAR INTERNATIONAL BMC, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)


 

Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance December 31, 2013

50,000,000

 

$50,000

 

 

2,310,488,796

 

$

2,310,493

 

$

3,370,195

 

$

(6,804,854)

 

$

(1,074,166)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

-

 

-

 

 

161,538,888

 

 

161,539

 

 

142,081

 

 

-

 

 

303,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for service

-

 

-

 

 

185,000,000

 

 

185,000

 

 

856,000

 

 

-

 

 

1,041,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares cancelled

 

 

 

 

 

(100,000,000)

 

 

(100,000)

 

 

52,000

 

 

 

 

 

(48,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for conversions

of notes payable

-

 

-

 

 

202,514,717

 

 

202,514

 

 

(155,154)

 

 

-

 

 

47,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduction in derivative liability

due to conversion

-

 

-

 

 

 

 

 

 

 

 

89,641

 

 

-

 

 

89,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

 

 

 

 

 

 

 

 

 

 

(1,328,038)

 

 

(1,328,038)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance September 30, 2014

50,000,000

 

$50,000

 

 

2,759,542,401

 

 

$2,759,546

 

 

$4,354,763

 

 

$(8,132,892)

 

 

($968,583)













The accompanying notes are an integral part of these unaudited financial statements



7



DEWMAR INTERNATIONAL BMC, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014


NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Dewmar International BMC (“we”, “our”, the “Company”) was formed as a Nevada corporation on March 13, 2009.  Today, Dewmar International BMC is a diversified operating company headquartered in Clinton, Mississippi.  The Company conducts business across a variegated set of categories and sectors including consumer goods, wholesale trade, pharmaceuticals and health sciences. The Company and its subsidiaries develop market and distribute goods, therapeutics and services in national and international markets through licensing agreements, e-commerce platforms, fee-for-service arrangements and distribution contracts.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation


The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2014 are not necessarily indicative of the results for the full years. While management of the Company believes that the disclosures presented herein and adequate and not misleading, these interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the periods ended December 31, 2013 filed in our Annual Report on Form 10K.


NOTE 3. CONVERTIBLE NOTES PAYABLE


In October, 2012, the Company entered into a 10% Contingently Convertible Promissory Note with Birr Marketing Group, Inc. for $20,000 with a due date of April 1, 2013. At September 30 2014, the Company revalued the fair market value of the derivative liability and recorded a loss of $27,104 on derivative liability.  


On April 16, 2013, the Company entered into a sixth Securities Purchase Agreement with Asher Enterprises, Inc. (Asher) a Delaware Corporation for an 8% contingently convertible promissory note with an aggregate principal amount of $42,500 which together with any unpaid accrued interest was due on December 21, 2013.


·

On January 2, 2014, Asher converted the remaining $6,500 of its outstanding notes payable and $1,700 accrued interest into 34,166,667 shares of common stock at a conversion price of $0.00024. After conversion, a principal balance of $0 remained on the notes payable. On the day of conversion, the Company revalued the derivative liability and recorded a loss on the derivative liability of $4,425; and reduced the pro-rated balance of the derivative liability by $17,877 into additional paid in capital.  As such, the derivative liability had a $0 balance after conversion on January 2, 2014.  In 2014, the Company accelerated amortization of the discount of $1,670 into interest expense.


On April 7, 2013, the Company entered into a convertible promissory note with a vendor to satisfy outstanding invoices in the amount of $68,000.  The note bears no interest and was convertible into shares of common stock. On September 30, 2014; the Company re-valued the derivative liability and recorded a loss on derivative liability of $16,473 making the balance in the derivative liability at September 30, 2014 $82,666.  The Company also recorded $48,921 amortization of the original discount into interest expense.


On May 21, 2013, the Company entered into a second Convertible Promissory Note with Continental Equities, LLC, a New York limited liability corporation for an 8% convertible promissory note in the aggregate principal amount of $30,000, which together with any unpaid accrued interest is due on May 20, 2014. $28,500 of the proceeds was funded directly to the company while $1,500 was recorded as original issuance discount.



8




·

On January 21, 2014, Continental converted the remaining $17,760 of its outstanding notes payable into 64,581,818 shares of common stock at a conversion price of $0.000275.  On the day of conversion, the Company revalued the derivative liability and recorded a gain on derivative liability of $28 and reduced the pro-rated portion of the derivative liability by $20,975 into additional paid in capital bringing the derivative liability to $0.  The Company also accelerated the amortization of $7,433 of the original discount into interest expense.


On December 10, 2013, the Company entered into an assignment agreement where the Company assigned a previously entered into $17,500 Notes payable with Pitts Riley to Microcap Equity Group, LLC, a third party.  As such the Company entered into a 10% Convertible note with Microcap Equity Group for $17,500 which matured on December 10, 2014.  


·

On January 27, 2014, Microcap converted the remaining $7,400 of the notes payable into 52,857,142 shares of common stock at a conversion price of $0.00014 bringing the notes payable balance to $0.  On the day of conversion, the Company re-valued the derivative liability and recorded a gain on the derivative liability of $335 and reduced the pro-rated portion of the derivative liability of $25,958 into additional paid in capital.  Additionally, the company accelerated the amortization of $3,952 of the original discount into interest expense.


During the year ended December 31, 2013, the Company entered into two 10% Contingently Convertible Promissory Notes with Birr Marketing Group, Inc. for $28,000 and $22,820 with due dates of June 4, 2014 and June 26, 2014. After the due dates, the notes became convertible at a fixed price of $0.001 into the Company’s common shares at the Holder’s option.   On June 6, 2014 and June 26, 2014, these notes were in default and were due and payable immediately.  On the respective due dates, the Company created a derivative liability.  As of September 30, 2014, the derivative liability balances were $41,942 and $51,462 respectively.  A resulting cumulative loss on derivative liability of $93,404 was recorded for the nine months ended September 30, 2014. See Note 4 for a description of derivative liabilities. 


On December 24 ,2013, The Company entered into an assignment agreement where the Company assigned  a previously entered into $48,470 Notes Payable to Pitts Riley  to Magna Group, LLC, a third party.  As such the Company entered into a 10% Convertible note with Magna Group for $48,470 on December 26, 2013.  The Note matured on December 26, 2014.  On January 6, 2014, Magna converted the remaining $14,000 of the original notes payable into 50,909,090 shares of common stock at a conversion price of $0.00028.  After conversion, $0 remained on the original notes payable.  On the day of conversion, the Company revalued the derivative liability and recorded a loss on derivative liability of $10,305 and reduced the pro-rated portion of the derivative liability by $24,830 into additional paid in capital.  The Company also accelerated the remaining discount of $14,000 into interest expense.  


In summary, during the periods ended September 30, 2014 and 2013, the Company recorded a total of $85,735 and $195,227, respectively in interest expense.  During periods ended September 30, 2014 and 2013, the amount of interest expense associated with the amortization of discounts associated with the amortization of the debt discounts established by derivative liabilities in the convertible notes was $79,976 and $174,120, respectively.


NOTE 4. DERIVATIVE LIABILITY


In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The conversion features of certain of the Company’s Convertible Promissory Note (described in Note 3), do not have a fixed settlement provision because conversion of the Notes will be lowered if the Company issues securities at lower prices in the future. This provision contained in these notes tainted the other convertible notes and therefore the other convertible notes have been treated as derivative liabilities.  In accordance with the FASB authoritative guidance, the conversion feature of the Notes were separated from the host contract and recognized as a derivative instrument. The conversion feature of the above described notes have been characterized as a derivative liability to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.




9



The following table summarizes the derivative liabilities included in the consolidated balance sheet at September 30, 2014:


Derivative liability

 

Derivative liabilities as of December 31, 2013

$

151,120

Net Loss on derivative liability

 

151,349

Debt discount

 

-

Settlement of derivative liability due to conversion of related notes

 

(89,641)

Derivative liabilities as of September 30, 2014

$

212,828


NOTE 5. STOCKHOLDERS’ DEFICIT

 

Shares Issued for Cash

During the period ended September 30, 2014, the Company issued 161,538,888 shares of common stock for $303,620 in cash.


Shares Issued for Services

 

During the period ended September 30, 2014, the Company issued 185,000,000 shares to consultants for services rendered.  The Company estimated the fair market value of the shares issued to be $1,041,000 and recorded this as stock based compensation.  In addition, the Company cancelled a consulting agreement which it had previously accounted for and as such reversed 100,000,000 shares and a corresponding $48,000 from share based compensation.  


Shares Issued for Conversion of Notes Payable


During the period ended September 30, 2014, the Company issued 202,514,717 shares of common stock related to conversions of various notes payable.  See Note 3 for further discussion.


NOTE 6. RELATED PARTY TRANSACTIONS

 

Sales to Related Party Distributor

 

The Company is engaged with a distributor that is wholly-owned by the Company’s CEO (the “Distributor”). The Distributor is responsible for shipping out product samples, transferring small quantities of product to local distributors at the request of the Company, sales of product to local retailers or small wholesalers and for the fulfillment of online sales orders. The Company may withdraw cases of product from the Distributor at the Company’s will for Company use, for which the Company will provide the Distributor with a credit memo based on a per-case price equal to the price paid by the Distributor to the Company.


At September 30, 2014 and December 31, 2013, receivable from the Distributor was $12,059 and $4,085, respectively.  For the nine months ended September 30, 2014 and 2013, the Company recorded $21,924 and $9,984 in revenue from related parties, respectively.


Advances to Related Party

 

At both September 30, 2014, and December 31, 2013, the Company had outstanding accounts receivable of $9,332, from a company owned by the CEO’s wife. These receivables represent shipping reimbursements erroneously billed by logistics and shipping companies. The Company paid these invoices and then in turn generated invoices to the company owned by the CEO’s wife for reimbursement.


NOTE 7. COMMITMENTS AND CONTINGENCIES

 

Employment Agreement

 

On January 1, 2011, the Company entered into employment agreement with Dr. Moran (“Employee”) to serve as President and Chief Executive Officer of the Company. The employment commenced on January 1, 2011 and runs for the period through January 1, 2015. The Company will pay Employee, as consideration for services rendered, a base salary of $120,000 per year.



10



As additional compensation, Employee is eligible to receive one percent of the issued and outstanding shares of the Company if the gross revenues hit specified milestones for each fiscal year under the agreement. The Company will provide additional benefits to Employee during the employment term which include, but are not limited to, health and life insurance benefits, vacation pay, expense reimbursement, relocation reimbursement and a Company car. If Employee dies, the Company will pay the designated beneficiary an amount equal to two years’ compensation, in equal payments over the next twenty four months.

 

In the event Employee’s employment is constructively terminated within five years of the commencement date, Employee shall receive a termination payment, which will be determined according to a schedule based upon the number of years since the commencement of the contract, within a range of $120,000 to $400,000. Additionally, Employee shall continue to receive the additional benefits mentioned above for a period of two years from the termination date. If the constructive termination date is later than five years after the commencement date, Employee shall receive the lesser amount of an amount equal to his aggregate base salary for five years following the date of the termination date, or an amount equal to his aggregate base salary through the end of the term. Additionally, Employee shall continue to receive the additional benefits mentioned above during the period he is entitled to receive the base salary.


For both the period ended September 30, 2014 and 2013, the Company incurred $127,458 base salary to Dr. Moran,  which was included as a component of general and administrative expenses. The Company recorded total accrued payroll to Dr. Moran in the amounts of $549,502 and $494,000 in accounts payable and accrued liabilities on its consolidated balance sheets at September 30, 2014and December 31, 2013, respectively.

 

Legal Proceedings


The Company is aggressively defending itself in all of the below proceedings. The Company’s management believes the likelihood of future liability to the Company for these contingencies is remote, and the Company has not recorded any liability for these legal proceedings at September 30, 2014 and December 31, 2013. While the results of these matters cannot be predicted with certainty, the Company’s management believes that losses, if any, resulting from the ultimate resolution of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.


On January 20, 2011, a claim was filed against Dewmar International BMC, Inc.(“Dewmar”) by Corey Powell, in Ascension Parish, LA 23rd Judicial District Court. Corey Powell was a former distributor of LEAN, a relaxation beverage marketed by Dewmar. Powell filed suit to recover allegedly unpaid commissions, “invasion fees” and “finder’s fees.” The commissions related to payments allegedly owed for Powell’s direct sale of LEAN product to wholesalers and retailers. The invasion fees relate to payments allegedly owed to Powell when the LEAN product was sold by other wholesalers in his geographic territory. The finders’ fees relate to payments allegedly owed to Powell for introducing investors to the Dewmar’s management. Discovery is complete. Dewmar has vigorously contested each and every one of the plaintiff’s allegations and has instructed counsel to proceed to trial on the merits which is scheduled this summer. Plaintiff sent a settlement demand earlier this year which was rejected by Dewmar.  Currently, there is no trial date set.


NOTE 8. SUBSEQUENT EVENTS


On December 4, 2014, Health & Wellness Research Consortium, LLC, (“Health & Wellness”) was created with Dewmar owning 100% of the LLC membership units.   The business objective of Health & Wellness is to develop, implement and execute healthcare sales and marketing strategies for pharmacies, clinics and hospitals in order to help the client broaden market presence, influence effective prescribing behaviors and ultimately maximize their return on assets.










11




ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Except for the historical information contained in this report on Form 10-Q, the matters discussed herein are forward-looking statements. Words such as “anticipates,” “believes,” “expects,” “future,” and “intends,” and similar expressions are used to identify forward-looking statements. These and other statements regarding matters that are not historical are forward-looking statements. These matters involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed below as well as those discussed elsewhere in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. This information should also be read in conjunction with our audited historical financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013,

 

Company Overview

 

Dewmar International BMC was formed as a Nevada corporation on March 13, 2009.


Today, Dewmar International BMC, Inc. is a diversified operating company headquartered in Clinton, Mississippi. The Company conducts business across a variegated set of categories and sectors including consumer goods, wholesale trade, pharmaceuticals and health sciences.


The Company and its subsidiaries develop, market and distribute goods, therapeutics and services in national and international markets through licensing agreements, e-commerce platforms, fee-for-service arrangements and distribution contracts.


Business Strategy


The Company’s business strategy is to identify paradigm shifts occurring in large, traditional or growth markets within the Company’s sphere of expertise to create innovative products, services and/or financial offerings that exploit new market opportunities.  


Forward-looking, management expects business growth resulting from increased domestic and foreign trade, new health science service offerings and expanded placement of the Company’s licensed products in Walmart and other big box retailers.

 

Results of Operations


For the three months ended September 30, 2014 and 2013.

 

Revenue

 

Revenue is presented net of sales allowances. Net revenue increased $182,830, or 354%, to $234,468 from $51,638 for the three months ended September 30, 2014 and 2013 respectively. This increase was primarily due to an overall increase in purchase orders.

 

Cost of Goods Sold

 

Cost of goods sold increased $54,325, or 377%, to $68,734 from $14,409 for the three months ended September 30, 2014 and 2013, respectively. This overall increase was primarily the result of the payment and recognition of the costs of raw materials.

 



12




Operating Expenses

 

Operating expenses decreased $6,857, or 2.7%, to $249,271 from $256,128 for the three months ended September  30, 2014 and 2013 respectively. The overall decrease in operating expenses results from decreases in stock based compensation arrangements totaling for three months ended September 30, 2014 as compared to 2013, respectively.   Also included was a decrease in Marketing and advertising costs of $9,926, or 53%, to $8,639 for the three month ended September 30, 2014, as compared to $18,565 for the three month ended September 30, 2013.   Contract labor costs decreased $8,969 or 39% to $14,266 from $23,235 for the three months ended September 30, 2014 and 2013, respectively. Contract labor costs primarily included costs for administrative and marketing/sales support.

 

Interest Expense

 

For the three months ended September 30, 2014 and 2013, the Company incurred interest expense of $19,380 and $70,827 respectively.  The decrease is due to the conversion of outstanding convertible notes during the period.


Net Income/Loss

 

Our net income for the three months ended September 30, 2014 was $25,401 as compared to a net loss of $340,300 for the same period ended September 30, 2013. The decrease in net loss is attributable to the decrease in expenses from the operating expenses and overall increase in sales, which is discussed above.

 

For the nine months ended September 30, 2014 and 2013.

 

Revenue

 

Revenue is presented net of sales allowances. Net revenue increased $247,376, or 106%, to $479,702 from $232,326 for the nine months ended September 30, 2014 and 2013 respectively. This increase was primarily due to an overall increase in purchase orders.

 

Cost of Goods Sold


Cost of goods sold increased $117,988, or 132%, to $207,126 from $89,138 for the nine months ended September 30, 2014 and 2013, respectively. This overall increase was primarily the result of the payment and recognition of the costs of raw materials and overall increase in revenue.


Operating Expenses


Operating expenses decreased $333,437, or 20%, to $1,363,578 from $1,697,015 for the nine months ended September 30, 2014 and 2013 respectively. The overall decrease in operating expenses results from decreases in stock based compensation arrangements totaling for nine months ended September 30, 2014 as compared to 2013, respectively. Marketing and advertising costs decreased $17,001, or 49%, to $17,526 for the nine month ended September 30, 2014, as compared to $34,527 for the nine month ended September 30, 2013.  Contract labor costs decreased $74,342 or 67% to $36,661 from $111,003 for the nine months ended September 30, 2014 and 2013, respectively. Contract labor costs primarily included costs for administrative and marketing/sales support.


Interest Expense

 

For the nine months ended September 30, 2014 and 2013, the Company incurred interest expense of $85,688 and $195,227, respectively.  The decrease is due to a decrease and conversion of convertible notes payable from the prior year period.

 

Net Loss

 

Our net losses for the nine months ended September 30, 2014 and 2013 were $1,328,038 and $1,906,308, respectively. The decrease in net loss is attributable to the decrease in expenses from the operating expenses and overall increase in sales, which is discussed above.



13




Off-Balance Sheet Arrangements

 

As of September 30, 2014, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. Our Annual Report on Form 10-K for the year ended December 31, 2013 contains a discussion of these significant accounting policies. There have been no significant changes in our significant accounting policies since December 31, 2013. See our Note 2 in our unaudited financial statements for the six months ended September 30, 2014, as set forth herein.

 

Liquidity and Capital Resources

 

During the nine months ended September 30, 2014 and 2013, the Company recognized negative cash flows from operating activities of $(288,281) and $(205,859), respectively. As of September 30, 2014 and December 31 2013, the Company held cash and cash equivalents of $22,570 and $7,231, respectively.


Cash used in investing activities totaled $0 and $19,900 or the six months ended September 30 2014 and 2013, respectively.


Cash provided by financing activities totaled $303,620 for the six months ended September 30, 2014, respectively, and consisted of proceeds from issuances of common stock for cash.   For the same period ended September 30, 2013, cash provided from financing activities totaled $199,320 and consisted of proceeds from issuance of convertible notes payable.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Required


ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, the Company carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined by Rule 13-15(e) under the Securities Exchange Act of 1934) under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the aforementioned officers have concluded that the Company’s disclosure controls and procedures were not effective to ensure the recording, processing and timely filing of periodic financial reports.

 

Changes in Internal Controls over Financial Reporting

 

Changes in Internal Controls Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





14




PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company is aggressively defending itself in all of the legal proceedings. See Note 7: Commitments and Contingencies in the footnotes for a complete listing of legal proceedings.  The Company’s management believes the likelihood of future liability to the Company for these contingencies is remote, and the Company has not recorded any liability for these legal proceedings at June 30, 2014 and December 31, 2013. While the results of these matters cannot be predicted with certainty, the Company’s management believes that losses, if any, resulting from the ultimate resolution of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the period ended September 30, 2014, the Company issued 161,538,888 shares of common stock for $303,620 in cash.   During the period ended September 30, 2014, the Company issued 185,000,000 shares to consultants for services rendered.  During the period ended September 30, 2014, the Company issued 202,514,717 shares of common stock related to conversions of various notes payable.  See Note 5 for further discussion.  The public float as of April 18, 2016 was 2,225,613,590 shares


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None.  

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

The following exhibits are filed herewith:

 

Exhibit

Number

 

Exhibit

Description

31.1

 

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

 

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

 

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase

101.LAB

 

XBRL Taxonomy Extension Label Linkbase

101.PRE

 

XBRL Taxonomy Presentation Linkbase

 






15




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.

 

 

Dewmar International BMC, Inc.

 

 

 

Date: July 8, 2016

By:

/s/ Marco Moran

 

 

President, CEO, and Director
















































16





Exhibit 31.1


CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002


I, Marco Moran, certify that:


1.

I have reviewed this quarterly report of Dewmar International BMC, Inc. for the period ended September 30, 2014.

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

 

4.

The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which the report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date:  July 8, 2016


/s/ Marco Moran

Marco Moran

CEO







Exhibit 31.2


CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002


I, Marco Moran, certify that:


1.

I have reviewed this quarterly report of Dewmar International BMC, Inc. for the period ended September 30, 2014.

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

 

4.

The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which the report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date:  July 8, 2016


/s/ Marco Moran

Marco Moran

CFO







Exhibit 32.1


CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Quarterly Report on Form 10-Q for the period ended September 30, 2014 of Dewmar International BMC, Inc.. (the “Company”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in such report.

 

Very truly yours,

 

 

/s/ Marco Moran

 

Marco Moran

 

Chief Executive Officer

 

 

 


July 8, 2016

 

 

 

 

 

/s/ Marco Moran

 

Marco Moran

 

Chief Financial Officer

 

 

 

July 8, 2016

 

 

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Dewmar International BMC, Inc. and will be furnished to the Securities and Exchange Commission or its staff upon request.







v3.5.0.2
Document and Entity Information
9 Months Ended
Sep. 30, 2014
shares
Document and Entity Information:  
Entity Registrant Name Dewmar International BMC, Inc.
Document Type 10-Q
Document Period End Date Sep. 30, 2014
Trading Symbol dewm
Amendment Flag false
Entity Central Index Key 0001269879
Current Fiscal Year End Date --12-31
Entity Common Stock, Shares Outstanding 2,759,542,401
Entity Filer Category Smaller Reporting Company
Entity Current Reporting Status No
Entity Voluntary Filers No
Entity Well-known Seasoned Issuer No
Document Fiscal Year Focus 2014
Document Fiscal Period Focus Q3


v3.5.0.2
Consolidated Balance Sheets - USD ($)
Sep. 30, 2014
Dec. 31, 2013
Current Assets    
Cash and cash equivalents $ 22,570 $ 7,231
Accounts receivable, net 197,487 9,532
Related party receivable 12,059 4,085
Advances to related party 9,332 9,332
Inventory 60,553 35,144
Prepaid expenses and other current assets   6,000
Total Current Assets 302,001 71,324
Property and equipment, net 21,182 26,845
Total Assets 323,183 98,169
Current Liabilities    
Accounts payable and accrued liabilities 737,909 714,868
Accrued interest 14,073 9,707
Notes payable 173,890 173,890
Convertible notes payable, net 153,066 122,750
Derivative liability 212,828 151,120
Total Current Liabilities 1,291,766 1,172,335
Total Liabilities 1,291,766 1,172,335
Commitments and Contingencies
Stockholders' Deficit    
Preferred stock value 50,000 50,000
Common stock value 2,759,546 2,310,493
Additional paid-in capital 4,354,763 3,370,195
Accumulated deficit (8,132,892) (6,804,854)
Total Stockholders' Deficit (968,583) (1,074,166)
Total Liabilities and Stockholders' Deficit $ 323,183 $ 98,169


v3.5.0.2
Consolidated Balance Sheets (Parenthetical) - USD ($)
Sep. 30, 2014
Dec. 31, 2013
Balance Sheet    
Accumulated depreciation of property, plant and equipment $ 19,873 $ 14,210
Unamortized discount, note payable $ 1,254 $ 77,230
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued 50,000,000 50,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 4,450,000,000 4,450,000,000
Common stock, shares issued 2,759,542,401 2,310,488,796
Common stock, shares outstanding 2,759,542,401 2,310,488,796


v3.5.0.2
Consolidated Statements of Operations - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Income Statement        
Revenues, net $ 234,468 $ 46,259 $ 457,778 $ 222,342
Related party revenue   5,379 21,924 9,984
Cost of goods sold 68,734 14,409 207,126 89,138
Gross profit 165,734 37,229 272,576 143,188
Operating expenses        
Occupancy and related expenses 8,999 8,613 28,248 34,867
Marketing and advertising 8,639 18,565 17,526 34,527
General and administrative 217,367 205,715 1,281,143 1,516,618
Contract labor 14,266 23,235 36,661 111,003
Total operating expenses 249,271 256,128 1,363,578 1,697,015
Loss from operations (83,537) (218,899) (1,091,002) (1,553,827)
Other income (expenses)        
Interest expense 19,380 70,827 85,687 195,227
Gain (loss) on derivative liability 128,318 (50,574) (151,349) (157,254)
Total other income (expense) 108,938 (121,401) (237,036) (352,481)
Net income (loss) $ 25,401 $ (340,300) $ (1,328,038) $ (1,906,308)
Net income (loss) per common share - basic and diluted $ 0.00 $ 0.00 $ 0.00 $ (0.01)
Weighted average common shares outstanding - basic 2,802,060,227 518,813,217 2,749,415,353 279,513,432
Weighted average common shares outstanding - diluted 2,918,213,560 518,813,217 2,749,415,353 279,513,432


v3.5.0.2
Consolidated Statements of Stockholders' Deficit - 9 months ended Sep. 30, 2014 - USD ($)
Preferred Stock
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total Stockholders' Deficit
Beginning Balance, shares at Dec. 31, 2013 50,000,000 2,310,488,796      
Beginning Balance, amount at Dec. 31, 2013 $ 50,000 $ 2,310,493 $ 3,370,195 $ (6,804,854) $ (1,074,166)
Shares issued for cash, shares   161,538,888      
Shares issued for cash, value   $ 161,539 142,081   303,620
Shares issued for services, shares   185,000,000      
Shares issued for services, value   $ 185,000 856,000   1,041,000
Shares cancelled, shares   (100,000,000)      
Shares cancelled, value   $ (100,000) 52,000   (48,000)
Shares issued for conversions of note payable, shares   202,514,717      
Shares issued for conversions of note payable, value   $ 202,514 (155,154)   47,360
Reduction in derivative liability due to debt conversion     89,641   89,641
Net income (loss)       (1,328,038) (1,328,038)
Ending Balance, shares at Sep. 30, 2014 50,000,000 2,759,542,401      
Ending Balance, amount at Sep. 30, 2014 $ 50,000 $ 2,759,546 $ 4,354,763 $ (8,132,892) $ (968,583)


v3.5.0.2
Consolidated Statements of Cash Flows - USD ($)
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities    
Net income (loss) $ (1,328,038) $ (1,906,308)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Depreciation expense 5,663 3,753
Stock-based compensation 993,000 932,451
Amortization of debt discount 75,976 174,120
Gain (loss) on derivative liability (151,349) (157,254)
Changes in operating assets and liabilities:    
Accounts receivable (187,955) 5,184
Related party receivables and payables (7,974) 2,648
Inventory (25,409) 17,649
Prepaid expenses and other current assets 6,000 1,700
Accounts payable and accrued liabilities 29,107 405,690
Net cash used in operating activities (288,281) (205,859)
Cash flows from investing activities    
Purchase of fixed assets   19,900
Net cash used in investing activities   (19,900)
Cash flows from financing activities    
Proceeds from notes payable   199,320
Proceeds from issuance of common stock 303,620  
Net cash provided by (used in) financing activities 303,620 199,320
Net change in cash and cash equivalents 15,339 (26,439)
Cash and cash equivalents, at beginning of period 7,231 38,388
Cash and cash equivalents, at end of period 22,570 11,949
Supplemental cash flow information    
Interest paid 3,692 10,709
Income taxes paid
Supplemental noncash investing and financing activities    
Issuance of common stock for conversions of notes payable 47,360 230,250
Reclassification of accounts payable to notes payable   334,661
Creation of debt discount   182,796
Reduction in derivative liability due to conversions of notes payable $ 89,641 302,044
Reduction in common stock payable for issuance of common stock   $ 199,193


v3.5.0.2
Organization and Description of Business
9 Months Ended
Sep. 30, 2014
Notes  
Organization and Description of Business

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Dewmar International BMC (“we”, “our”, the “Company”) was formed as a Nevada corporation on March 13, 2009.  Today, Dewmar International BMC is a diversified operating company headquartered in Clinton, Mississippi.  The Company conducts business across a variegated set of categories and sectors including consumer goods, wholesale trade, pharmaceuticals and health sciences. The Company and its subsidiaries develop market and distribute goods, therapeutics and services in national and international markets through licensing agreements, e-commerce platforms, fee-for-service arrangements and distribution contracts.



v3.5.0.2
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2014
Notes  
Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2014 are not necessarily indicative of the results for the full years. While management of the Company believes that the disclosures presented herein and adequate and not misleading, these interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the periods ended December 31, 2013 filed in our Annual Report on Form 10K.



v3.5.0.2
Convertible Notes Payable Disclosure
9 Months Ended
Sep. 30, 2014
Notes  
Convertible Notes Payable Disclosure

NOTE 3. CONVERTIBLE NOTES PAYABLE

 

In October, 2012, the Company entered into a 10% Contingently Convertible Promissory Note with Birr Marketing Group, Inc. for $20,000 with a due date of April 1, 2013. At September 30 2014, the Company revalued the fair market value of the derivative liability and recorded a loss of ($27,104) on derivative liability. 

 

On April 16, 2013, the Company entered into a sixth Securities Purchase Agreement with Asher Enterprises, Inc. (“Asher”) a Delaware Corporation for an 8% contingently convertible promissory note with an aggregate principal amount of $42,500 which together with any unpaid accrued interest was due on December 21, 2013.

 

·      On January 2, 2014, Asher converted the remaining $6,500 of its outstanding notes payable and $1,700 accrued interest into 34,166,667 shares of common stock at a conversion price of $0.00024. After conversion, a principal balance of $0 remained on the notes payable. On the day of conversion, the Company revalued the derivative liability and recorded a loss on the derivative liability of ($4,425); and reduced the pro-rated balance of the derivative liability by $17,877 into additional paid in capital.  As such, the derivative liability had a $0 balance after conversion on January 2, 2014.  In 2014, the Company accelerated amortization of the discount of $1,670 into interest expense.

 

On April 7, 2013, the Company entered into a convertible promissory note with a vendor to satisfy outstanding invoices in the amount of $68,000.  The note bears no interest and was convertible into shares of common stock. On September 30, 2014; the Company re-valued the derivative liability and recorded a loss on derivative liability of ($16,473) making the balance in the derivative liability at September 30, 2014 $82,666.  The Company also recorded $48,921 amortization of the original discount into interest expense.

 

On May 21, 2013, the Company entered into a second Convertible Promissory Note with Continental Equities, LLC, a New York limited liability corporation for an 8% convertible promissory note in the aggregate principal amount of $30,000, which together with any unpaid accrued interest is due on May 20, 2014. $28,500 of the proceeds was funded directly to the company while $1,500 was recorded as original issuance discount.

 

·      On January 21, 2014, Continental converted the remaining $17,760 of its outstanding notes payable into 64,581,818 shares of common stock at a conversion price of $0.000275.  On the day of conversion, the Company revalued the derivative liability and recorded a gain on derivative liability of $28 and reduced the pro-rated portion of the derivative liability by $20,975 into additional paid in capital bringing the derivative liability to $0.  The Company also accelerated the amortization of $7,433 of the original discount into interest expense.

 

On December 10, 2013, the Company entered into an assignment agreement where the Company assigned a previously entered into $17,500 Notes payable with Pitts Riley to Microcap Equity Group, LLC, a third party.  As such the Company entered into a 10% Convertible note with Microcap Equity Group for $17,500 which matured on December 10, 2014. 

 

·      On January 27, 2014, Microcap converted the remaining $7,400 of the notes payable into 52,857,142 shares of common stock at a conversion price of $0.00014 bringing the notes payable balance to $0.  On the day of conversion, the Company re-valued the derivative liability and recorded a gain on the derivative liability of $335 and reduced the pro-rated portion of the derivative liability of $25,958 into additional paid in capital.  Additionally, the company accelerated the amortization of $3,952 of the original discount into interest expense.

 

During the year ended December 31, 2013, the Company entered into two 10% Contingently Convertible Promissory Notes with Birr Marketing Group, Inc. for $28,000 and $22,820 with due dates of June 4, 2014 and June 26, 2014. After the due dates, the notes became convertible at a fixed price of $0.001 into the Company’s common shares at the Holder’s option.   On June 6, 2014 and June 26, 2014, these notes were in default and were due and payable immediately.  On the respective due dates, the Company created a derivative liability.  As of September 30, 2014, the derivative liability balances were $41,942 and $51,462 respectively.  A resulting cumulative loss on derivative liability of $93,404 was recorded for the nine months ended September 30, 2014. See Note 4 for a description of derivative liabilities.

 

On December 24, 2013, The Company entered into an assignment agreement where the Company assigned  a previously entered into $48,470 Notes Payable to Pitts Riley  to Magna Group, LLC, a third party.  As such the Company entered into a 10% Convertible note with Magna Group for $48,470 on December 26, 2013.  The Note matured on December 26, 2014.  On January 6, 2014, Magna converted the remaining $14,000 of the original notes payable into 50,909,090 shares of common stock at a conversion price of $0.00028.  After conversion, $0 remained on the original notes payable.  On the day of conversion, the Company revalued the derivative liability and recorded a loss on derivative liability of ($10,305) and reduced the pro-rated portion of the derivative liability by $24,830 into additional paid in capital.  The Company also accelerated the remaining discount of $14,000 into interest expense. 

 

In summary, during the periods ended September 30, 2014 and 2013, the Company recorded a total of $85,687 and $195,227, respectively in interest expense.  During periods ended September 30, 2014 and 2013, the amount of interest expense associated with the amortization of discounts associated with the amortization of the debt discounts established by derivative liabilities in the convertible notes was $79,976 and $174,120, respectively.



v3.5.0.2
Derivative Liability Disclosure
9 Months Ended
Sep. 30, 2014
Notes  
Derivative Liability Disclosure

NOTE 4. DERIVATIVE LIABILITY

 

In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The conversion features of certain of the Company’s Convertible Promissory Note (described in Note 3), do not have a fixed settlement provision because conversion of the Notes will be lowered if the Company issues securities at lower prices in the future. This provision contained in these notes tainted the other convertible notes and therefore the other convertible notes have been treated as derivative liabilities. In accordance with the FASB authoritative guidance, the conversion feature of the Notes were separated from the host contract and recognized as a derivative instrument. The conversion feature of the above described notes have been characterized as a derivative liability to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

 

The following table summarizes the derivative liabilities included in the consolidated balance sheet at September 30, 2014:

 

Derivative liability

Derivative liabilities as of December 31, 2013

$

151,120

Net Loss on derivative liability

151,349

Debt discount

--

Settlement of derivative liability due to conversion of related notes

(89,641)

Derivative liabilities as of September 30, 2014

$

212,828



v3.5.0.2
Stockholders' Deficit Disclosure
9 Months Ended
Sep. 30, 2014
Notes  
Stockholders' Deficit Disclosure

NOTE 5. STOCKHOLDERS’ DEFICIT

 

Shares Issued for Cash

During the period ended September 30, 2014, the Company issued 161,538,888 shares of common stock for $303,620 in cash.

 

Shares Issued for Services

 

During the period ended September 30, 2014, the Company issued 185,000,000 shares to consultants for services rendered.  The Company estimated the fair market value of the shares issued to be $1,041,000 and recorded this as stock based compensation.  In addition, the Company cancelled a consulting agreement which it had previously accounted for and as such reversed 100,000,000 shares and a corresponding $48,000 from share based compensation. 

 

Shares Issued for Conversion of Notes Payable

 

During the period ended September 30, 2014, the Company issued 202,514,717 shares of common stock related to conversions of various notes payable.  See Note 3 for further discussion.



v3.5.0.2
Related Party Transactions Disclosure
9 Months Ended
Sep. 30, 2014
Notes  
Related Party Transactions Disclosure

NOTE 6. RELATED PARTY TRANSACTIONS

 

Sales to Related Party Distributor

 

The Company is engaged with a distributor that is wholly-owned by the Company’s CEO (the “Distributor”). The Distributor is responsible for shipping out product samples, transferring small quantities of product to local distributors at the request of the Company, sales of product to local retailers or small wholesalers and for the fulfillment of online sales orders. The Company may withdraw cases of product from the Distributor at the Company’s will for Company use, for which the Company will provide the Distributor with a credit memo based on a per-case price equal to the price paid by the Distributor to the Company.

 

At September 30, 2014 and December 31, 2013, receivable from the Distributor was $12,059 and $4,085, respectively.  For the nine months ended September 30, 2014 and 2013, the Company recorded $21,924 and $9,984 in revenue from related parties, respectively.

 

Advances to Related Party

 

At both September 30, 2014, and December 31, 2013, the Company had outstanding accounts receivable of $9,332, from a company owned by the CEO’s wife. These receivables represent shipping reimbursements erroneously billed by logistics and shipping companies. The Company paid these invoices and then in turn generated invoices to the company owned by the CEO’s wife for reimbursement.



v3.5.0.2
Commitments and Contingencies Disclosure
9 Months Ended
Sep. 30, 2014
Notes  
Commitments and Contingencies Disclosure

NOTE 7. COMMITMENTS AND CONTINGENCIES

 

Employment Agreement

 

On January 1, 2011, the Company entered into employment agreement with Dr. Moran (“Employee”) to serve as President and Chief Executive Officer of the Company. The employment commenced on January 1, 2011 and runs for the period through January 1, 2015. The Company will pay Employee, as consideration for services rendered, a base salary of $120,000 per year.

 

As additional compensation, Employee is eligible to receive one percent of the issued and outstanding shares of the Company if the gross revenues hit specified milestones for each fiscal year under the agreement. The Company will provide additional benefits to Employee during the employment term which include, but are not limited to, health and life insurance benefits, vacation pay, expense reimbursement, relocation reimbursement and a Company car. If Employee dies, the Company will pay the designated beneficiary an amount equal to two years’ compensation, in equal payments over the next twenty four months.

 

In the event Employee’s employment is constructively terminated within five years of the commencement date, Employee shall receive a termination payment, which will be determined according to a schedule based upon the number of years since the commencement of the contract, within a range of $120,000 to $400,000. Additionally, Employee shall continue to receive the additional benefits mentioned above for a period of two years from the termination date. If the constructive termination date is later than five years after the commencement date, Employee shall receive the lesser amount of an amount equal to his aggregate base salary for five years following the date of the termination date, or an amount equal to his aggregate base salary through the end of the term. Additionally, Employee shall continue to receive the additional benefits mentioned above during the period he is entitled to receive the base salary.

 

For both the period ended September 30, 2014 and 2013, the Company incurred $127,458 base salary to Dr. Moran, which was included as a component of general and administrative expenses. The Company recorded total accrued payroll to Dr. Moran in the amounts of $549,502 and $494,000 in accounts payable and accrued liabilities on its consolidated balance sheets at September 30, 2014and December 31, 2013, respectively.

 

Legal Proceedings

 

The Company is aggressively defending itself in all of the below proceedings. The Company’s management believes the likelihood of future liability to the Company for these contingencies is remote, and the Company has not recorded any liability for these legal proceedings at September 30, 2014 and December 31, 2013. While the results of these matters cannot be predicted with certainty, the Company’s management believes that losses, if any, resulting from the ultimate resolution of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

 

On January 20, 2011, a claim was filed against Dewmar International BMC, Inc.(“Dewmar”) by Corey Powell, in Ascension Parish, LA 23rd Judicial District Court. Corey Powell was a former distributor of LEAN, a relaxation beverage marketed by Dewmar. Powell filed suit to recover allegedly unpaid commissions, “invasion fees” and “finder’s fees.” The commissions related to payments allegedly owed for Powell’s direct sale of LEAN product to wholesalers and retailers. The invasion fees relate to payments allegedly owed to Powell when the LEAN product was sold by other wholesalers in his geographic territory. The finders’ fees relate to payments allegedly owed to Powell for introducing investors to the Dewmar’s management. Discovery is complete. Dewmar has vigorously contested each and every one of the plaintiff’s allegations and has instructed counsel to proceed to trial on the merits which is scheduled this summer. Plaintiff sent a settlement demand earlier this year which was rejected by Dewmar.  Currently, there is no trial date set.



v3.5.0.2
Subsequent Events
9 Months Ended
Sep. 30, 2014
Notes  
Subsequent Events

NOTE 8. SUBSEQUENT EVENTS

 

On December 4, 2014, Health & Wellness Research Consortium, LLC, (“Health & Wellness”) was created with Dewmar owning 100% of the LLC membership units.   The business objective of Health & Wellness is to develop, implement and execute healthcare sales and marketing strategies for pharmacies, clinics and hospitals in order to help the client broaden market presence, influence effective prescribing behaviors and ultimately maximize their return on assets.



v3.5.0.2
Summary of Significant Accounting Policies: Basis of Presentation (Policies)
9 Months Ended
Sep. 30, 2014
Policies  
Basis of Presentation

Basis of Presentation

 

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2014 are not necessarily indicative of the results for the full years. While management of the Company believes that the disclosures presented herein and adequate and not misleading, these interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the periods ended December 31, 2013 filed in our Annual Report on Form 10K.



v3.5.0.2
Derivative Liability Disclosure: Schedule of Derivative Liabilities (Tables)
9 Months Ended
Sep. 30, 2014
Tables/Schedules  
Schedule of Derivative Liabilities

 

Derivative liability

Derivative liabilities as of December 31, 2013

$

151,120

Net Loss on derivative liability

151,349

Debt discount

--

Settlement of derivative liability due to conversion of related notes

(89,641)

Derivative liabilities as of September 30, 2014

$

212,828



v3.5.0.2
Convertible Notes Payable Disclosure (Details) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Gain (loss) on derivative liability $ 128,318 $ (50,574) $ (151,349) $ (157,254)    
Common stock issued for debt conversion     202,514,717      
Interest expense $ 19,380 $ 70,827 $ 85,687 $ 195,227    
Contingently Convertible Promissory Note with Birr Marketing Group            
Interest rate           10.00%
Proceeds from convertible promissory note         $ 28,000 $ 20,000
Gain (loss) on derivative liability     (27,104)      
Contingently Convertible Promissory Note with Asher            
Interest rate         8.00%  
Proceeds from convertible promissory note         $ 42,500  
Gain (loss) on derivative liability     (4,425)      
Amount of debt converted into common stock     6,500      
Accrued interest converted     $ 1,700      
Common stock issued for debt conversion     34,166,667      
Conversion price $ 0.00024   $ 0.00024      
Interest expense     $ 1,670      
Convertible Promissory Note to Satisfy Outstanding Invoices            
Proceeds from convertible promissory note         $ 68,000  
Gain (loss) on derivative liability     (16,473)      
Interest expense     48,921      
Convertible Promissory Note with Continental Equities            
Interest rate         8.00%  
Proceeds from convertible promissory note         $ 30,000  
Gain (loss) on derivative liability     28      
Amount of debt converted into common stock     $ 17,760      
Common stock issued for debt conversion     64,581,818      
Conversion price 0.000275   $ 0.000275      
Interest expense     $ 7,433      
Convertible Note with Microcap Equity Group            
Interest rate         10.00%  
Proceeds from convertible promissory note         $ 17,500  
Gain (loss) on derivative liability     335      
Amount of debt converted into common stock     $ 7,400      
Common stock issued for debt conversion     52,857,142      
Conversion price 0.00014   $ 0.00014      
Interest expense     $ 3,952      
ContingentlyConvertiblePromissoryNoteWithBirrMarketingGroup2Member            
Proceeds from convertible promissory note         22,820  
Convertible note with Magna Group (2)            
Proceeds from convertible promissory note         $ 48,470  
Gain (loss) on derivative liability     (10,305)      
Amount of debt converted into common stock     $ 14,000      
Common stock issued for debt conversion     50,909,090      
Conversion price $ 0.00028   $ 0.00028      
Interest expense     $ 14,000      


v3.5.0.2
Derivative Liability Disclosure: Schedule of Derivative Liabilities (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Details          
Derivative liability $ 212,828   $ 212,828   $ 151,120
Gain (loss) on derivative liability $ (128,318) $ 50,574 151,349 $ 157,254  
Settlement of derivative liability     $ 89,641    


v3.5.0.2
Stockholders' Deficit Disclosure (Details)
9 Months Ended
Sep. 30, 2014
USD ($)
shares
Details  
Common stock issued for cash 161,538,888
Proceeds from issuance of common stock | $ $ 303,620
Common stock issued for services 185,000,000
Value of common stock issued for services | $ $ 1,041,000
Common stock reversed and cancelled 100,000,000
Share based compensation recorded from cancellation | $ $ 48,000
Common stock issued for debt conversion 202,514,717


v3.5.0.2
Related Party Transactions Disclosure (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Details        
Related party receivable   $ 12,059   $ 4,085
Related party revenue $ 5,379 21,924 $ 9,984  
Advances to related party   $ 9,332   $ 9,332


v3.5.0.2
Commitments and Contingencies Disclosure (Details) - Salary to Dr. Moran (CEO) - USD ($)
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Salaries paid $ 127,458  
Accrued payroll $ 549,502 $ 494,000
Dewmar International BMC (CE) (USOTC:DEWM)
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