10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Amendment No. 1

  X .QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

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

For the transition period __________ to __________

Commission File Number 000-53611

THE DIGITAL DEVELOPMENT GROUP CORP.

(Exact name of registrant as specified in its charter)

Nevada	98-0515726
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6630 West Sunset Blvd.

Los Angeles, CA 90028

(Address of principal executive offices)

1-800-783-3128

(Registrant’s telephone number)

N/A

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

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  X . No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes  X . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes . No  X .

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

May 28, 2014: 142,803,533 common shares.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Quarterly Report of The Digital Development Group Corp. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2014, filed with the Securities and Exchange Commission on June 4, 2014 (the “Form 10-Q”), is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.  Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

Other than the aforementioned, no other changes have been made to the Form 10-Q.  This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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PART II – OTHER INFORMATION

ITEM 6.

EXHIBITS

Exhibit Number	Description
10.36*	Convertible Note dated May 7, 2014 with Vista Capital Investments, LLC
10.37*	Convertible Note dated May 9, 2014 with LG Capital Funding LLC
10.38*	Securities Purchase Agreement dated May 12, 2014 with Union Capital LLC
10.39*	Convertible Promissory Note dated May 12, 2014 with Union Capital LLC
10.40*	Exchange Agreement dated May 12, 2014 with Tonaquint, Inc.
10.41*	Convertible Promissory Note dated May 12, 2014 with Tonaquint, Inc.
10.42*	Convertible Promissory Note with KBM Worldwide, Inc.
10.43*	Convertible Promissory Note with Coventry Enterprises
31*	Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, for Chief Executive Officer and Chief Financial Officer (1)
32*	Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, for Chief Financial Officer and Chief Financial Officer (1)
101**	XBRL (eXtensible Business Reporting Language)

*Previously filed with the SEC as an attachment for the Form 10-Q for the period ended March 31, 2014 on June 4, 2014.

**Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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.

	THE DIGITAL DEVELOPMENT GROUP CORP.
	(Registrant)
Date: June 6, 2014	/s/ Martin W. Greenwald
	Martin W. Greenwald Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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Summary of stock option activity as follows (Details)	Options	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Exercisable at Dec. 31, 2013	6,774,167	0.10	6.85	0
Granted	0
Exercised	0
Forfeited or expired	0
Exercisable at Mar. 31, 2014	6,774,167	0.10	6.85	0

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Related Party Note Payable (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Related Party Note Payable
Greenwald has agreed to loan	$ 250,000
Advance funds up to the amount	250,000
Outstanding under loan agreement	$ 103,060	$ 126,160
Accrued Interest Rate Per Annum	3.00%

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Other Assets as Follows (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Other Assets as Follows:
Recorded debt issuance cost as other assets	$ 127,214		$ 127,214
Convertible promissory note payable to Stuart Subotnik	240,000		240,000
Balance of debt issuance costs	74,209		84,810
Amortization expense	$ 10,601	$ 0

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CAPITAL STOCK TRANSACTIONS (Details) (USD $)	Mar. 31, 2014
CAPITAL STOCK TRANSACTIONS
Common shares for services provided	6,475,000
Common shares for services provided valued	$ 295,875
Stock based compensation	56,556
Common shares for cash valued	2,000
Common shares upon conversion of notes payable	18,528,374
Common shares upon conversion of notes payable valued	335,015
Subscription Received for purchase of common stock	65,000
Purchase of shares for stock	$ 5,000,000

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PREPAID EXPENSES

3 Months Ended

Mar. 31, 2014

PREPAID EXPENSES

PREPAID EXPENSES

4. – PREPAID EXPENSES

The components of prepaid expense were as follows:

		March 31, 2014		December 31, 2013
		(unaudited)
Prepaid services	$	1,217	$	1,218
Royalties advance		248,207		216,069
Total prepaid expense	$	249,424	$	217,287

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Quick Loan Funding (Details) (USD $)	Mar. 31, 2014
Quick Loan Funding:
Lender paid upon execution	$ 110,000
Total principal sum	400,000
Original issue discount	10.00%
Total amount funded	360,000
Additional funding agreed upon	150,000
Additional funding received	$ 55,000
Conversion price per share as per the right of conversion	$ 0.20
Fixed percentage of the lowest trade price of the Company's common stock in the 25 trading days prior to the date of conversion.	60.00%

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Stuart Subotnik Note (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013	Sep. 10, 2012
Stuart Subotnik Note:
Convertible note payable to Stuart Subotnik			$ 240,000
Note issued with warrants and exercisable into common stock			800,000
Recorded a discount			118,619
Warrants have a term of years			3
Warrants exercise price			$ 0.30
Embedded conversion feature and additional debt discount			121,381
Recognized interest expense for amortization of discount	16,600	0
Note carry an interest rate per annum			8.00%
Conversion price per share			$ 0.30
Volume Weighted Average Pricing of common stock per share	$ 1.00
Additional Notes payabel to Mr.Subotnik	$ 140,000
Minimum accrued interest at rates due by November 2013.	8.00%
Maximum accrued interest at rates due by November 2013.	12.00%

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Charlie Sheen Notes Payable (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Charlie Sheen Notes Payable
Prommissory notes payable	$ 150,000
Interest rate	6.00%
Interest payment per month	750
Additional borrowing from Mr.Sheen	390,000
Repayment during the period	$ 2,500

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Tonaquint Convertible note (Details) (USD $)	Mar. 31, 2014	Apr. 03, 2013	Mar. 31, 2013
Tonaquint Convertible note
Under the terms of the Financing Documents, the Buyer entered into the Secured Convertible Promissory Note in the principal amount		$ 340,000
The Note bears interest at the rate per annum		8.00%
Upon the occurrence of an event of default, interest shall accrue on the outstanding balance at the rate per annum		22.00%
The Note carries an original issue discount		30,000
In addition, the Company agreed to pay to the Buyer to cover the Buyer's legal fees, accounting costs		10,000
In consideration for the Note, the Buyer paid the Company	100,000
Issued to the Company two Buyer Deed of Trust Notes in the amount each consisting	100,000
Upon an event of default, the outstanding balance under the Note shall increase to and will be immediately due and payable	1.35
The buyer also issue additional amount of note	10,660
Converted principal balance of note to common stock	51,855
The Company also issued Buyer a warrant to purchase shares of Company common stock	1,400,000
Exercise price per share of common stock	$ 0.20
The embedded conversion feature of this note and related warrants was recorded a total debt discount	111,412
Debt discount representing the value of the embedded conversion feature	23,804
Additional debt discount for the fair value of the warrants recorded	47,608
Original issue discount and fees recorded	40,000
The Company recognized interest expense for the amortization and write off of the discount	$ 6,317		$ 0
Tonaquint converted note into shares of shares of the Company's common stock	7,947,964

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements primarily reflect the financial position, results of operations and cash flows of the Company (as discussed above). The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) GAAP for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, these interim condensed financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period.

Going Concern

The Company has minimal revenue and has incurred losses since its inception on January 25, 2012. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders and the ability of the Company to obtain necessary equity financing to continue operations.

There is no assurance that the Company will ever be profitable. The unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Principles of Consolidation

The condensed consolidated balance sheets include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

In preparing these condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the estimated life of equipment, valuation of long-lived assets, accruals for potential liabilities and valuation assumptions related to share based payments and the derivative liability related to the convertible notes payable.

Revenue Recognition

Revenues are recognized on monthly basis when subscribers sign up for the services on the Company’s website.

Cash & Cash Equivalents

We consider cash equivalents with original maturities of 90 days or less to be cash equivalents. As of March 31, 2014 and December 31, 2013, we have no cash equivalents.

Fair Value of Financial Instruments

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available:

·

Level 1 -Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

·

Level 2 -Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

·

Level 3 -Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. The Company’s financial instruments include cash, prepaid expense and accrued liability. The estimated fair value of these instruments approximates its carrying amount due to the short maturity of these instruments.

Accounts Receivable Factoring

On October 1, 2013, the Company entered into an accounts receivable purchase agreement (the “Agreement”) with Summit Capital Investors, LLC (“Summit”), with an initial term of five years and renewing annually thereafter. The Company may obtain advances up to $300,000 from Summit and shall establish a separate merchant bank account in the name of Summit (the “Lockbox”) into which all of the Company’s monthly membership or accounts receivable shall be deposited. The funds in the lockbox account will be used to pay 120% of each advance received from Summit plus any other fees or costs. Total advances received from Summit through March 31, 2014 amounted to $120,000 and total accounts receivable deposited in the lockbox account amounted to $49,430. As of March 31, 2014 and December 31, 2013, the Company has payable related to this factoring agreement of $121,440 and $84,407, respectively, which was calculated based on 120% of advances received reduced by total accounts receivable deposited into the lockbox. All revenue from the Company will be paid directly into this bank account which is not under the Company’s ownership until the advances are paid off.

Income Taxes

The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s deferred tax assets primarily consist of net operating loss carry-forwards and stock-based compensation. However, the Company established a full valuation allowance for these deferred tax assets as the Company has determined that it is more likely than not to fully realize these deferred tax assets prior to their expiration.

Stock Based Compensation

We may periodically grant stock or stock options and issue warrants to employees and non-employees in non-capital raising transactions for services rendered and to obtain financing. We account for stock option grants and warrant issuance to employees based on Financial Accounting Standards Board (FASB) ASC Topic 718, “Compensation – Stock Compensation”, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. We account for stock option grants and warrant issued to non-employees in accordance with ASC Topic 505, “Equity”, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

Earnings per Share

The Company computes net income per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. As of March 31, 2014, diluted EPS gives effect to all dilutive potential common shares outstanding during the period including 9,809,200 stock options and warrants, using the treasury stock method, and 56,561,698 shares for convertible loan notes, using the if-converted method In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

Recent Accounting Pronouncements

Adopted

In February 2013, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. The objective of the amendments in this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for those obligations addressed within existing guidance in U.S. GAAP. The amendment requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and an additional amount the reporting entity expects to pay on behalf of its co-obligors. The entity is required to disclose the nature and amount of the obligation as well as other information about those obligations. The Company adopted this ASU as of January 1, 2014. This adoption did not have an effect on our financial statements.

On July 18, 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740 does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of the amendments in this update is to eliminate that diversity in practice. The Company adopted this ASU as of January 1, 2014. This ASU did not have an effect on our financial statements.

Not Adopted

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014.

Other recent pronouncements issued by FASB (including its Emerging Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

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Asher Enterprises Note and Other Notes Payable (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Asher Enterprises Note and Other Notes Payable
Asher purchased a Convertible Promissory Note	$ 128,000
The Company borrowed a net total from several individuals under notes payable	$ 69,650
The Asher Notes accrues interest at the rate per annum	8.00%

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Subsequent transactions (Details) (USD $)	May 21, 2014	May 12, 2014	May 09, 2014	May 07, 2014	Apr. 02, 2014
Subsequent transactions
Convertible Promissory Note in the principal amount		$ 90,000	$ 26,500	$ 150,000	$ 50,000
Note bears interest at the rate		10.00%	8.00%	12.00%	10.00%
Convertible Promissory Note with KBM Worldwide, Inc.			29,500
Note bears interest at the rate per annum		8.00%	8.00%
Convertible promissory note in principal amount		285,000
Stock Purchase Agreement sold shares of Company common stock	8,421,053
Shares of Company common stock value	$ 160,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current Assets
Cash	$ 0	$ 6,371
Prepaid expense	249,424	217,287
Total current assets	249,424	223,658
Debt issuance costs	74,209	84,810
TOTAL ASSETS	323,633	308,468
Current Liabilities
Bank overdraft	6,027	0
Accounts payable	267,521	340,864
Accrued liabilities	919,418	805,152
Related party note payable	103,060	126,160
Notes payable, net of discount	2,157,659	2,286,869
Derivative liability	1,244,407	4,272,031
Total current liabilities	4,698,092	7,831,076
Contingent liability (note 8)	1,146,146	1,137,708
TOTAL LIABILITIES	5,844,238	8,968,784
STOCKHOLDERS' DEFICIT
Common stock, 500,000,000 shares authorized, par value $0.001, 106,340,371and 81,280,441 shares issued and outstanding	106,340	81,280
Common stock subscribed	120,000	45,000
Additional paid in capital	4,739,877	3,369,583
Accumulated deficit	(10,486,822)	(12,156,179)
Total stockholders' deficit	(5,520,605)	(8,660,316)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 323,633	$ 308,468

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ORGANIZATION

3 Months Ended

Mar. 31, 2014

ORGANIZATION

ORGANIZATION

1. – ORGANIZATION

Digital Development Group Corp. (the “Company”) (originally Regency Resources Inc.) was incorporated under the laws of the State of Nevada on December 11, 2006, with authorized capital stock of 200,000,000 shares at $0.001 par value. The Company was originally organized for the purpose of acquiring and developing mineral properties. Subsequent to a merger transaction described below, the Company ceased mineral exploration activities.

The Company entered into a binding letter of intent with Digitally Distributed Acquisition Corp., a Delaware corporation (“DDAC”), effective April 10, 2012 (the “LOI”), in connection with a proposed reverse acquisition transaction by and between the Company and DDAC whereby the Company acquired all of the shares of outstanding capital stock of DDAC in exchange for the issuance of a certain ownership interest in the Company to the shareholders of DDAC (the “Share Exchange”). DDAC is expected to have certain valuable products and intellectual property rights comprised of a web-based multi-tiered billing infrastructure and related to proprietary software and other means of syndicating and encoding media content that it will acquire from Digitally Distributed, LLC, (DDLLC), a Delaware limited liability company prior to or concurrently with the closing of the transaction.

On July 31, 2012, DDAC acquired from Digitally Distributed, LLC, a Delaware limited liability company ("DDLLC") (the “Merger”), certain tangible and intangible property including certain intellectual property related to a web-based multi-tiered billing infrastructure and to software and other means of syndicating and encoding media content, in exchange for the issuance by DDAC to DDLLC of 13,500,000 shares of DDAC common stock pursuant to a Subscription Agreement by and between DDAC and DDLLC dated July 31, 2012.

In accordance with the terms of Exchange Agreement, on the Closing Date, the Registrant issued 20,000,000 shares of its common stock to the Selling Shareholders in exchange for 100% of the issued and outstanding capital stock of DDAC (the "Exchange Transaction"). As a result of the Exchange Transaction, the Selling Shareholders acquired 21.39% of our issued and outstanding common stock, DDAC became our wholly-owned subsidiary, and the Registrant acquired the business and operations of DDAC.

The Company amended its Articles of Incorporation to change its name from Regency Resources, Inc. to the Digital Development Group Corp., effective May 2, 2012.

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Commitments And Contingencies Consists of the following (Details) (USD $)	Mar. 31, 2014	Jul. 10, 2013	May 31, 2013	Jun. 16, 2012	Dec. 19, 2011
Commitments And Contingencies Consists of the following:
Issued two convertible promissory notes					$ 280,000
Aggregate principal amount received					118,000
Advance amount agreed					280,000
Accruing interest at the default rate per annum				29.00%
Contingent liability				143,488
Owes an additional plus accrued interest				162,000
Recorded a contingent liability	186,146
Recorded an accrual under accrued expenses	960,000
Attorney Fees and costs (Ironridge)			850,000
Additional attorney's fees and costs		110,168
Agreed to pay Charlie Sheen a fee payable in installments	$ 300,000
Options issued to Charlie Sheen	7,000,000
Options vest in equal installments of one million shares every six months aggregate	1,000,000
Exercise price per share (options)	$ 0.10

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A summary of stock option activity is as follows (Tables)

3 Months Ended

Mar. 31, 2014

Summary of stock option activity as follows

A summary of stock option activity is as follows

A summary of stock option activity is as follows:

			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Options		Price	Life (Years)		Value
Outstanding at December 31, 2013	11,320,000	$	0.10	5.97	$	-
Granted	-		-	-		-
Exercised	-		-	-		-
Forfeited or expired	-		-	-		-
Outstanding at March 31, 2014	11,320,000	$	0.10	5.72	$	-
Exercisable at March 31, 2014	6,774,167	$	0.10	6.75	$	-

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Operating lease (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating lease
Operating expenses for the facility per month	$ 5,935
Rent expense.	$ 23,335	$ 16,505

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Components of prepaid expense were as follows (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Components of prepaid expense were as follows
Prepaid services	$ 1,217	$ 1,218
Royalties advance	248,207	216,069
Total prepaid expense	$ 249,424	$ 217,287

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REVERSE MERGER ACCOUNTING

3 Months Ended

Mar. 31, 2014

REVERSE MERGER ACCOUNTING

REVERSE MERGER ACCOUNTING

2. – REVERSE MERGER ACCOUNTING

The Merger was accounted for as a reverse-merger and recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). DDAC is the acquirer for financial reporting purposes and Digital Development Group Corp. is the acquired company. DDAC was incorporated on January 25, 2012 (“Inception”). Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of DDAC from Inception and are recorded at the historical cost basis of DDAC, and the consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and DDAC; and historical operations of DDAC and the Company since the closing date of the Merger. Common stock and the corresponding capital of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. In conjunction with the Merger, DDAC received no cash and assumed no liabilities from Digital Development Group Corp.

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CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)	Mar. 31, 2014	Dec. 31, 2013
Parentheticals
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	500,000,000	500,000,000
Common Stock, shares issued	106,340,371	81,280,441
Common Stock, shares outstanding	106,340,371	81,280,441

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ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2014

ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements primarily reflect the financial position, results of operations and cash flows of the Company (as discussed above). The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) GAAP for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, these interim condensed financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period.

Going Concern

Going Concern

The Company has minimal revenue and has incurred losses since its inception on January 25, 2012. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders and the ability of the Company to obtain necessary equity financing to continue operations.

There is no assurance that the Company will ever be profitable. The unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated balance sheets include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates

In preparing these condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the estimated life of equipment, valuation of long-lived assets, accruals for potential liabilities and valuation assumptions related to share based payments and the derivative liability related to the convertible notes payable.

Revenue Recognition

Revenue Recognition

Revenues are recognized on monthly basis when subscribers sign up for the services on the Company’s website.

Cash & Cash Equivalents Policy

Cash & Cash Equivalents

We consider cash equivalents with original maturities of 90 days or less to be cash equivalents. As of March 31, 2014 and December 31, 2013, we have no cash equivalents.

Fair Value of Financial Instrument

Fair Value of Financial Instruments

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available:

·

Level 1 -Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

·

Level 2 -Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

·

Level 3 -Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. The Company’s financial instruments include cash, prepaid expense and accrued liability. The estimated fair value of these instruments approximates its carrying amount due to the short maturity of these instruments.

Accounts Receivable Factoring

Accounts Receivable Factoring

On October 1, 2013, the Company entered into an accounts receivable purchase agreement (the “Agreement”) with Summit Capital Investors, LLC (“Summit”), with an initial term of five years and renewing annually thereafter. The Company may obtain advances up to $300,000 from Summit and shall establish a separate merchant bank account in the name of Summit (the “Lockbox”) into which all of the Company’s monthly membership or accounts receivable shall be deposited. The funds in the lockbox account will be used to pay 120% of each advance received from Summit plus any other fees or costs. Total advances received from Summit through March 31, 2014 amounted to $120,000 and total accounts receivable deposited in the lockbox account amounted to $49,430. As of March 31, 2014 and December 31, 2013, the Company has payable related to this factoring agreement of $121,440 and $84,407, respectively, which was calculated based on 120% of advances received reduced by total accounts receivable deposited into the lockbox. All revenue from the Company will be paid directly into this bank account which is not under the Company’s ownership until the advances are paid off.

Income Taxes Policy

Income Taxes

The Company follows ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s deferred tax assets primarily consist of net operating loss carry-forwards and stock-based compensation. However, the Company established a full valuation allowance for these deferred tax assets as the Company has determined that it is more likely than not to fully realize these deferred tax assets prior to their expiration.

Stock Based Compensation Policy

Stock Based Compensation

We may periodically grant stock or stock options and issue warrants to employees and non-employees in non-capital raising transactions for services rendered and to obtain financing. We account for stock option grants and warrant issuance to employees based on Financial Accounting Standards Board (FASB) ASC Topic 718, “Compensation – Stock Compensation”, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. We account for stock option grants and warrant issued to non-employees in accordance with ASC Topic 505, “Equity”, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

Earnings per Share Policy

Earnings per Share

The Company computes net income per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. As of March 31, 2014, diluted EPS gives effect to all dilutive potential common shares outstanding during the period including 9,809,200 stock options and warrants, using the treasury stock method, and 56,561,698 shares for convertible loan notes, using the if-converted method In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Adopted

In February 2013, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. The objective of the amendments in this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for those obligations addressed within existing guidance in U.S. GAAP. The amendment requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and an additional amount the reporting entity expects to pay on behalf of its co-obligors. The entity is required to disclose the nature and amount of the obligation as well as other information about those obligations. The Company adopted this ASU as of January 1, 2014. This adoption did not have an effect on our financial statements.

On July 18, 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740 does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of the amendments in this update is to eliminate that diversity in practice. The Company adopted this ASU as of January 1, 2014. This ASU did not have an effect on our financial statements.

Not Adopted

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014.

Other recent pronouncements issued by FASB (including its Emerging Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document and Entity Information
Entity Registrant Name	Digital Development Group Corp
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Entity Central Index Key	0001379699
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	142,803,533
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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Prepaid Expenses (Tables)

3 Months Ended

Mar. 31, 2014

Prepaid Expenses As Follows

Prepaid Expenses As Follows

The components of prepaid expense were as follows:

		March 31, 2014		December 31, 2013
		(unaudited)
Prepaid services	$	1,217	$	1,218
Royalties advance		248,207		216,069
Total prepaid expense	$	249,424	$	217,287

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues:
Net revenue	$ 25,837	$ 4,756
Operating expenses
General and administrative	573,692	2,287,931
Total operating expenses	573,692	2,287,931
Operating loss	(547,855)	(2,283,175)
Other (income) expenses
Interest expense	279,860	293,010
(Gain) loss on derivative liability	(2,497,072)	564,061
Total other (income) expenses	(2,217,212)	857,071
Income/(loss) before income taxes	1,669,357	(3,140,246)
Provision for income taxes	0	0
Net Income/(loss)	$ 1,669,357	$ (3,140,246)
Earnings per share - basic	$ 0.02	$ (0.05)
Earnings per share - diluted	$ 0.01	$ (0.05)
Weighted average shares outstanding - basic	94,786,247	59,084,280
Weighted average shares outstanding - diluted	161,157,145	59,084,280

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DERIVATIVE LIABILITY

3 Months Ended

Mar. 31, 2014

DERIVATIVE LIABILITY

DERIVATIVE LIABILITY

7. – DERIVATIVE LIABILITY

The following table represents the Company’s derivative liability activity for both the embedded conversion features and the warrants for the three months ended March 31, 2014:

		Amount
Derivative Liability balance, January 1, 2014	$	4,272,031
Issuance of derivative financial instrument in 2014		153,024
Conversion of debt in 2014		(683,576)
Change in FMV of derivative liability		(2,497,072)
Derivative liability balance, March 31, 2014 (Unaudited)	$	1,244,407

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NOTES PAYABLE, NET

3 Months Ended

Mar. 31, 2014

NOTES PAYABLE, NET

NOTES PAYABLE, NET

6. – NOTES PAYABLE, NET

Notes payable consisted of the following:

		March 31, 2014		December 31, 2013
		(unaudited)
Convertible notes payable to Coventry Capital, LLC, net of discount	$	810,000	$	960,000
Convertible note payable to Stuart Subotnik, net of discount		263,801		247,201
Asher Enterprises		183,000		183,000
Note payable to QuickLoan Funding		37,573		65,010
Notes payable to Charlie Sheen		510,000		510,000
Convertible note payable to Tonaquint, net of discount		43,590		81,614
Other notes payable, net of discount		309,695		240,044
Total notes payable, net of discount	$	2,157,659	$	2,286,869

Coventry Capital, LLC Notes

During 2012, the Company issued a total of $950,000 convertible notes payable to Coventry Capital, LLC. These convertible promissory notes are payable on demand and carried an interest rate of 1% per month (simple interest), until the closing of the voluntary share exchange transaction contemplated under the letter of intent. Thereafter, the interest rate shall adjust to 3% per year, simple interest. Upon closing of the voluntary share exchange transaction contemplated under the letter of intent, the unpaid principal and any accrued and unpaid interest shall be immediately due and payable upon written demand by the holder at any time.

At any time on or before the maturity date, the holder, at its sole discretion may elect to have all or part of the principal and the accrued and unpaid interest thereon, converted into a number of shares of common stock of the Company determined by dividing (i) the unpaid principal and any accrued and unpaid interest thereon, as of the conversion date, by (ii) the lower of (a) the price per share at which shares of capital stock of the Company are sold in any financing, or (b) $0.50 per share. A "financing" means the sale of shares of capital stock of the Company occurring within twenty four (24) months after the closing.

The embedded conversion feature of these notes was recorded as a derivative liability due to the down-round protection of the conversion price. The Company recorded a debt discount of $714,077, representing the value of the embedded conversion feature. The Company recognized $0 and $178,819 of interest expense for the amortization of the discount during the three months ended March 31, 2014 and 2013, respectively.

In January 2013, the Company borrowed an additional $10,000 from Coventry Capital, LLC.

On January 27, 2014, The Company entered into a Debt Conversion Agreement with Cemblance LTD (“Cemblance”) pursuant to which the Company and Cemblance agreed to convert $150,000 of outstanding Company debt due to Coventry Capital LLC, which Cemblance is the assignee, into 4,000,000 shares of Company common stock.

Stuart Subotnik Notes

On September 10, 2012, the Company issued a $240,000 convertible note payable to Stuart Subotnik. This note was issued with 800,000 warrants and exercisable into the Company’s common stock. The warrants have a three year term and the exercise price is $0.30. The embedded conversion feature of this note and related warrants was recorded as a derivative liability due to the down-round protection of the conversion prices. The Company recorded a debt discount of $118,619, representing the value of the embedded conversion feature and additional debt discount of $121,381 for the fair value of the warrants. The Company recognized $16,600 of interest expense for the amortization of the discount during the three months ended March 31, 2014 and 2013.

This convertible promissory note and accrued and unpaid interest are payable upon the earlier of i) at any time after three year anniversary of the issue date of this note at the written request of the holder to the company or ii) when, upon or after the occurrence of an event of default. The note carries an interest rate of 8% per annum (simple interest).

At any time on or before the maturity date, the holder, at its sole discretion may elect to have all or part of the principal and the accrued and unpaid interest thereon, converted into a number of shares of common stock of the Company. The conversion price is $0.30 per share. At any time which the volume weighted average pricing “VWAP” for the common stock is $1.00 or greater for a period of twenty consecutive trading days, then at the election of the Company in its sole discretion may elect to convert all of the outstanding amount of principal and accrued interest into shares of the common stock at $1.00 per share.

During October and November 2012, the Company issued additional notes payable to Mr. Subotnik in the aggregate amount of $140,000. These notes accrue interest at rates ranging from 8% to 12% and are due by November 2013. The Company is currently in default of these $140,000 notes payable because the principal balance and accrued interest are not paid on the due date.

QuickLoan Funding

On March 13, 2013, The Company, entered into a Convertible Promissory Note (the “Convertible Promissory Note”) with QuickLoan Funding, an accredited lender (the “Lender”). Under the terms of the Promissory Note, the Lender paid $110,000 to the Company upon execution of the Convertible Promissory Note, and the Lender may fund additional amounts in such amounts and at such dates as the Lender may choose in its sole discretion, up to an additional $150,000 above the initial $110,000 funded. Thereafter, the Lender may provide additional amounts only by mutual agreement with the Company, up to a total principal sum of $400,000. All amounts advanced by Lender are subject to a 10% original issue discount such that the total amount funded to the Company would be $360,000 if the Lender advances all funds under the Convertible Promissory Note. The maturity date is one year from the effective date of each payment by the Lender, and all outstanding principal and interest is due and payable by the Company on the maturity date. If the Company repays the Note in full within the first ninety days after the effective date, then the interest rate is zero percent. If the Company does not repay the Note in full within the first 90 days after the effective date, then a one-time interest charge of twelve percent shall be applied to the unpaid principal.

During the three months ended March 31, 2014, QuickLoan Funding converted $55,160 of their notes into 3,233,333 shares of the Company’s common stock. In addition, the Company used the proceed it received from the sale of shares of its common stock to pay $68,879 in principal due to QuickLoan Funding.

In the three months ended March 31, 2014, the Company received additional $55,000 from the lender.

During the three months ended March 31, 2014, the Company executed an agreement with an investor to issue 5,000,000 shares of the Company’s common stock valued at $75,000 and in return the investor will pay $68,879 of the outstanding debt of Quickloan. As of March 31, 2014, these 5,000,000 shares were not issued and accordingly the $75,000 was recorded as stock subscription. Additionally, during the three months ended March 31, 2014, Quickloan converted $55,160 of their notes into 3,233,333 shares of the Company’s common stock.

The Lender has the right, at any time from 180 days after the effective date, at its election, to convert all or part of the outstanding and unpaid principal and accrued interest under the Convertible Promissory Note into shares of Company common stock at the conversion price. The conversion price is the lesser of $0.20 per share, or 60% of the lowest trade price of the Company’s common stock in the 25 trading days prior to the date of conversion. The Lender also has piggyback registration rights to have the shares it would receive upon conversion of the Promissory Note included within the next registration statement which the Company may file with the Securities and Exchange Commission.

Charlie Sheen

On April 16, 2013, the Company executed a Promissory Note (the “Promissory Note”) in favor of celebrity actor, Charlie Sheen, pursuant to which Charlie Sheen has loaned the Company $150,000. Under the terms of the Promissory Note, the principal accrues interest at the rate of 6% per annum and is due and payable on April 10, 2015, with interest only payments of $750 per month to commence on November 1, 2013. During the three months ended September 30, 2013, the Company borrowed an additional $390,000 from Mr. Sheen and repaid $2,500 to Mr. Sheen under the same terms as the Promissory Note.

Tonaquint Convertible note

On April 3, 2013, the Company, entered into a Securities Purchase Agreement, Secured Convertible Promissory Note, Security Agreement, Warrant, Deed of Trust, Deed of Trust Notes, Confession of Judgment and ancillary agreements (the “Financing Documents”) with Tonaquint, Inc., (the “Buyer”).

Under the terms of the Financing Documents, the Buyer entered into the Secured Convertible Promissory Note in the principal amount of $340,000.00 (the “Note”). The Company is obligated to commence repayment of the Note on the 180 ^th day after the Note issuance date by making monthly installments of $28,333. Provided certain equity conditions are met, the Company may repay the monthly installment payments through the issuance of Company common stock at the market price (the “Market Price”) which means 60% of the arithmetic average of the three (3) lowest volume weighted average pricing “VWAP” of the shares of Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of repayment. Additionally, if the Company pays the installment payment in Company common stock, then 23 days following the installment payment date the Buyer shall receive additional shares of Company common stock if the Market Price on the 23 ^rd day is less than the Market Price on the installment payment date. The entire outstanding balance under the Note is due and payable 17 months after the date of issuance. The Note bears interest at the rate of eight percent (8%) per annum, provided that upon the occurrence of an event of default, interest shall accrue on the outstanding balance both before and after judgment at the rate of twenty-two percent (22%) per annum. The Note carries an original issue discount of $30,000. In addition, the Company agreed to pay $10,000 to the Buyer to cover the Buyer’s legal fees, accounting costs, due diligence, monitoring and other transaction costs, all of which amount is included in the initial principal balance of the Note.

In consideration for the Note, the Buyer paid the Company (i) $100,000, and (ii) issued to the Company two Buyer Deed of Trust Notes in the amount of $100,000 each, one which will be prepaid by Buyer within 2 months and 4 months, respectively, of April 3, 2013 provided that an equity conditions failure has not occurred under the Note. The Note is secured by a Security Agreement executed by the Company and listing the Buyer Deed of Trust Notes as security for the Company’s obligations under the Financing Documents (the “Security Agreement”). Each of the Buyer Deed of Trust Notes is secured by a Deed of Trust (the “Deed of Trust”). The outstanding balance under the Note may be converted by the Buyer at any time into shares of Company common stock at the rate of $0.20 per share (the “Conversion Price”), subject to adjustment in the event of certain issuances of variable price or unrestricted securities by the Company after the date of the Note. Upon an event of default, the outstanding balance under the Note shall increase to 135% and will be immediately due and payable, and the Buyer may convert the outstanding balance into shares of Company common stock at the lower of the Conversion Price then in effect and the Market Price.

The Company also issued Buyer a warrant to purchase up to 1,400,000 shares of Company common stock at an exercise price of $0.20 per share, subject to adjustment in the event of certain issuances of variable price and unrestricted securities by the Company after the date of the Note. The Warrants may be exercised for a term of 5 years and have a “cashless exercise” provision.

The embedded conversion feature of this note and related warrants was recorded as a derivative liability due to the down-round protection of the conversion prices. The Company recorded a total debt discount of $111,412 representing the value of the embedded conversion feature of $23,804, additional debt discount of $47,608 for the fair value of the warrants, and $40,000 original issue discount and fees. The Company recognized $6,317 and $0 of interest expense for the amortization of the discount during the three months ended March 31, 2014 and 2013, respectively.

During the three months ended March 31, 2014, Tonaquint converted $51,855 of their notes into 7,947,964 shares of the Company’s common stock.

Asher Enterprises Note

During 2013 the Company entered into several Note Purchase Agreement and Convertible Promissory Note with Asher Enterprises, Inc. pursuant to which Asher purchased a $183,000 Convertible Promissory Note (the “Asher Notes”). The Asher Notes accrues interest at the rate of 8% per annum; is due and payable in several dates in 2014; and may be converted by Asher at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 60% of the market price (as determined in the Asher Note) calculated at the time of conversion. The Asher Note Purchase Agreement and Note also contain certain representations, warranties, covenants and events of default. The Company is in default in this note because the Company did not file the 10-Q on time according to SEC filing requirements.

During the three months ended March 31, 2013, Asher Notes in the amount of $128,000 became convertible. The embedded conversion feature of these Asher Notes was recorded as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company recorded an interest expense of $149,424 representing the value of the embedded conversion feature.

During the three months ended March 31, 2014, Asher Notes in the amount of $75,000 in principal, along with $3,000 of accrued interest, where converted into 3,347,077 shares of the Company’s common stock.

In addition, during the three months ended March 31, 2014, the Company entered into two additional notes with Asher Enterprises for a total of $75,000. The notes accrue interest at the rate of 8% per annum; are due and payable in the first quarter of 2015; and may be converted by Asher at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 60% of the market price (as determined in the Asher Note) calculated at the time of conversion.

Other Notes Payable

During the three months ended March 31, 2014, the Company borrowed a net total of $69,650 from several individuals under notes payable.

Related Party Note Payable

Effective January 30, 2013, the Company entered into a Promissory Note with Martin W. Greenwald, the Company’s Chief Executive Officer, pursuant to which Mr. Greenwald has agreed to loan the Company up to $250,000 to fund Company operations. The Promissory Note provides that Mr. Greenwald may advance funds to the Company from to time to time, up to the amount of $250,000. The amounts advanced shall be due within one year from the date of the promissory note and shall accrue interest at 3% per annum. The Company has $103,060 and 126,160 outstanding under the loan agreement as March 31, 2014 and December 31, 2013.

XML

Organization Consists of the following (Details)	Jul. 31, 2012	Dec. 11, 2006
Organization Consists of the following:
Authorized capital stock shares		200,000,000
Capital stock shares par value		0.001
Shares of common stock pursuant to a subscription agreement	13,500,000
Registrant issued shares of its common stock	20,000,000
Percentage of cpital stock	100.00%
Selling Shareholders acquired	21.39%

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NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2014

NOTES PAYABLE

NOTES PAYABLE

Notes payable consisted of the following:

		March 31, 2014		December 31, 2013
		(unaudited)
Convertible notes payable to Coventry Capital, LLC, net of discount	$	810,000	$	960,000
Convertible note payable to Stuart Subotnik, net of discount		263,801		247,201
Asher Enterprises		183,000		183,000
Note payable to QuickLoan Funding		37,573		65,010
Notes payable to Charlie Sheen		510,000		510,000
Convertible note payable to Tonaquint, net of discount		43,590		81,614
Other notes payable, net of discount		309,695		240,044
Total notes payable, net of discount	$	2,157,659	$	2,286,869

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

10. – STOCK-BASED COMPENSATION

On January 3, 2013, our board of directors approved the adoption of The Digital Development Group Corp. 2013 Equity Incentive Plan (the "2013 Plan”). The 2013 Plan is intended to aid the Company in recruiting and retaining key employees, directors or consultants and to motivate them by providing incentives through the granting of awards of stock options or other stock-based awards. The 2013 Plan is administered by the board of directors. Directors, officers, employees and consultants of the Company and its affiliates are eligible to participate under the 2013 Plan.

Effective January 30, 2013, the Company approved the re-pricing of all of the 3,370,000 previously granted options under the Company’s 2012 Equity Incentive Plan from $0.451 per share to $0.11 per share. All of the other terms of the options remained unchanged. The fair value of the these options after re-pricing was lower than the fair value before re-pricing and accordingly the Company will continue to amortize the original fair value over the remaining vesting period in accordance with US GAAP.

On January 30, 2013, the Company granted a total of 950,000 options to employees under the 2012 Plan. The options have an exercise price of $0.11 per share; 400,000 of the options vested immediately and the remaining 550,000 options vest 1/12 monthly over a period of one year, and vest immediately upon a change of control of the Company; and have a 10 year term.

On March 25, 2013 and in connection with the Sheen Agreement, the Company has agreed to issue to Mr. Sheen options to purchase up to seven million shares of the Company’s common stock as follows: options to purchase one million shares of the Company’s common stock vested upon the date of the Agreement, and options to purchase the remaining six million shares of the Company’s common stock shall vest in equal installments of one million shares every six months after the date of the Agreement, each exercisable at an exercise price of $0.10 per share and have a 5 year term.

The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model and the assumptions in the following table. The expected volatility is based on the daily historical volatility of comparative companies, measured over the expected term of the option. The risk-free rate is based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term closest to the expected term of the option. The dividend yield reflects that the Company has not paid any cash dividends since inception and does not intend to pay any cash dividends in the foreseeable future.

The following assumptions were used to determine the fair value of the options at date of grant:

Expected volatility (%)	95%-109%
Risk free rate	0.27%-0.38%
Expected term	2-3 years
Dividend yield	0%

Total stock-based compensation expense included in general and administrative expense for the period from January 1, 2014 to March 31, 2014 was $78,888.

As of March 31, 2014, there was $270,893 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 5.72 years. The Company’s current practice is to issue new shares to satisfy option exercises. Compensation expense for all stock-based compensation awards is recognized using the straight-line method.

A summary of stock option activity is as follows:

			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Options		Price	Life (Years)		Value
Outstanding at December 31, 2013	11,320,000	$	0.10	5.97	$	-
Granted	-		-	-		-
Exercised	-		-	-		-
Forfeited or expired	-		-	-		-
Outstanding at March 31, 2014	11,320,000	$	0.10	5.72	$	-
Exercisable at March 31, 2014	6,774,167	$	0.10	6.75	$	-

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2014

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

8. – COMMITMENTS AND CONTINGENCIES

Contingent liability

On December 19, 2011, DDLLC entered into two promissory notes with an accredited investor pursuant to which the Company issued two 14% convertible promissory notes (the "Notes") to advance of up to $280,000 to the Company. As of this date, the Company has only received $118,000 of the agreed to $280,000.

The Notes were offered and sold in reliance on the exemption from registration afforded by Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended. The Notes have a six-month term due June 16, 2012, and are convertible by the holder into Common Stock of a contemplated merger or acquisition and a subsequent newly formed company ("Acquireco") at a price of $0.10 per share. The Company may prepay all or a portion of the outstanding principal and interest under the Notes upon 10 days' written notice without penalty. The amount due under the Notes will become immediately due and payable if the Company fails to pay unpaid principal on the maturity date of June 16, 2012, any representation or warranty made by the Company is false, incorrect, incomplete or misleading, or the Company dissolves, liquidates, ceases operations, is unable to pay its debts when due, a receiver or trustee is appointed or bankruptcy proceedings are instituted. While any amount of the Note is outstanding, the borrower is obligated to the covenants of (i) paying no dividends.

The Company is in default of these notes because it did not repay principal and accrued interest on the maturity date of June 16, 2012. Due to the default provisions of the Note, the Company will begin accruing interest at the default rate of 29% per annum from the maturity date going forward. In July 2012, the Company tried to begin negotiations with the investor; however, it has been unsuccessful in contacting the investor to date. The Company has recorded a contingent liability of $186,146 as of March 31, 2014, to reflect the obligation that it believes it owes to investor. The investor is claiming that the Company owes an additional $162,000 plus accrued interest but the Company never received the additional funds as described under the Notes and intends to defend against any position that the investor takes pertaining to the additional $162,000. The Company has treated this matter as a contingent liability because at this time the Company is uncertain as to how and when this matter will be resolved. The Company believes it has accrued its estimate in the condensed consolidated financial statements of the most likely amount to be settled with the investor.

Ironridge

Effective December 19, 2012, the Company terminated the Securities Purchase Agreement, Registration Rights Agreement and Debenture dated November 6, 2012 (the “Financing Documents”) with Ironridge Media Co., a division of Ironridge Global IV, Ltd. (“Ironridge”), for the sale of up to $3,000,000 of Convertible Subordinated Debentures and Series A Preferred Stock. On January 11, 2013, Ironridge submitted a claim with JAMS, Inc. in Santa Monica, California for binding arbitration under the Financing Documents and requested that it be awarded damages relating to the termination of the Financing Documents. The Company submitted counter-claims in the JAMS arbitration claiming that it was fraudulently induced to enter into the Financing Documents, and that a fully performed oral stock purchase agreement caused the Financing Documents to be abandoned by the parties, justifying rescission of the financing documents. In May 2013, the Arbitrator in the JAMS arbitration announced an interim award to Ironridge shall recover from the Company in the amount of $850,000 plus attorney fees and costs. On July 10, 2013, the Arbitrator made the interim award final, and awarded Ironridge an additional $110,168 in attorneys’ fees and costs. The Company does not have adequate cash to pay the final arbitration award. The judgment resulting from the arbitration award would adversely affect the business, future operations and the financial condition of the Company, and may cause the Company to default under its existing loan obligations which would provide the lenders with the right for immediate repayment. The Company recorded an accrual of $960,000 under contingent liability in the accompanying condensed consolidated balance sheet as of March 31, 2014 and December 31, 2013 related to this case.

Sheen Agreement

On March 25, 2013, the Company entered into an Agreement with celebrity actor, Charlie Sheen, pursuant to which he has agreed to work with the Company to develop and promote his own channel and original content, and to promote and endorse the Company and its channels through various media. Under the terms of the Agreement, Mr. Sheen’s involvement with the Company is to include his creation of original content; his promotion and endorsement of the Company’s channels and the creation and promotion of the Charlie Sheen Channel; his personal appearances; the use of Mr. Sheen’s name, voice and likeness for promotional purposes; and the promotion of the Company and its channels across social media, including postings on Facebook and Twitter. The Agreement has a term of twelve months, unless extended as provided in the Agreement.

In consideration for his services, the Company has agreed to pay Charlie Sheen a $300,000 fee payable in installments. In addition, the Company has agreed to pay Mr. Sheen a percentage of Company gross revenues generated by the distribution and sale of original programming featuring Mr. Sheen and his affiliates, including gross revenues from the Charlie Sheen Channel and other pay per view events and episodes. In consideration of Mr. Sheen’s obligations, the Company has also agreed to issue to Mr. Sheen options to purchase up to seven million shares of the Company’s common stock as follows: options to purchase one million shares of the Company’s common stock vested upon the date of the Agreement, and options to purchase the remaining six million shares of the Company’s common stock shall vest in equal installments of one million shares every six months after the date of the Agreement, each exercisable at an exercise price of $0.10 per share. The Company and Charlie Sheen are in mutual dispute with regards to this agreement.

Operating lease

The Company leases office space under an operating lease, which began on July 1, 2012 and expires on November 15, 2013. The average rental payment including utilities and operating expenses for the facility is approximately $5,935 per month. Rent expense for the periods ended March 31, 2014 and 2013 amounted to $23,335 and $16,505, respectively.

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COMMON STOCK

3 Months Ended

Mar. 31, 2014

COMMON STOCK

COMMON STOCK

9. – COMMON STOCK

From January 1, 2014 to March 31, 2014, the Company issued 6,475,000 common shares for services provided valued at $295,875 and was recorded as stock based compensation, 56,556 common shares for cash valued at $2,000, 18,528,374 common shares upon conversion of notes payable valued at $335,015.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2014

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

11. – SUBSEQUENT EVENTS

On April 2, 2014, the Company entered into a Convertible Promissory Note with Coventry Enterprises LLC (“Coventry”) in the original principal amount of $50,000 (the “Note”).  The Note bears interest at the rate of 10% per annum; is due and payable twelve months after the date of issuance; and may be converted by Coventry at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 60% of the market price (as determined in the Note) calculated at the time of conversion.  The foregoing is only a brief description of the material terms of the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act.  The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 7, 2014, the Company entered into a Convertible Promissory Note with Vista Capital Investments, LLC (“Vista”) in the original principal amount of $150,000 (the “Note”), pursuant to which Vista funded $50,000. The Note has a one time interest charge of 12%; is due and payable one year after the date of issuance; and may be converted by Vista at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 60% of the market price (as determined in the Note) calculated at the time of conversion. The Note also contains certain representations, warranties, covenants and events of default, and is collateralized by the issuance of 20,000,000 shares of Company common stock. The foregoing is only a brief description of the material terms of the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 9, 2014, the Company entered into a Convertible Promissory Note with LG Capital Funding LLC (“LG”) in the original principal amount of $26,500 (the “Note”). The Note bears interest at the rate of 8% per annum; is due and payable twelve months after the date of issuance; and may be converted by LG at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 55% of the market price (as determined in the Note) calculated at the time of conversion. The foregoing is only a brief description of the material terms of the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 9, 2014, the Company entered into a Convertible Promissory Note with KBM Worldwide, Inc. (“KBM”) in the original principal amount of $29,500 (the “Note”).  The Note bears interest at the rate of 8% per annum; is due and payable on February 12, 2015; and may be converted by KBM at any time after 180 days of the date of issuance into shares of Company common stock at a conversion price equal to 55% of the market price (as determined in the Note) calculated at the time of conversion.  The foregoing is only a brief description of the material terms of the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act.  The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 12, 2014, the Company entered into Securities Purchase Agreement with Union Capital LLC (“Union”) pursuant to which the Company issued three convertible promissory notes in the aggregate principal amount of $90,000 (the “Notes”), pursuant to which Union funded $30,000 (less discounts and fees). The Notes accrue interest at the rate of 10% per annum; are due and payable 12 months after their date of issuance; and may be converted by Union at any time into shares of Company common stock at a conversion price equal to 56% of the market price (as determined in the Note) calculated at the time of conversion. The Securities Purchase Agreement and Notes also contain certain representations, warranties, covenants and events of default. The foregoing is only a brief description of the material terms of the Securities Purchase Agreement and Notes, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 12, 2014, the Company entered into an Exchange Agreement with Tonaquint, Inc. (“Tonaquint”) pursuant to which the Company exchanged a previously issued warrant for a Convertible Promissory Note in the principal amount of $285,000 (the “Note”). The Note accrues interest at the rate of 8% per annum; is due and payable 17 months after the date of issuance; and may be converted by Tonaquint at any time into shares of Company common stock at a conversion price equal to 90% of the market price (as determined in the Note) calculated at the time of conversion, up to $28,000 per month. The Note Purchase Agreement and Note also contain certain representations, warranties, covenants and events of default. The foregoing is only a brief description of the material terms of the Exchange Agreement and Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Quarterly Report. The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

On May 21, 2014, the Company entered into a Common Stock Purchase Agreement with St. George Investments, LLC pursuant to which the Company sold 8,421,053 shares of Company common stock for $160,000. The issuance of the shares was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the shares was an accredited investor.

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Derivative Liability conversion features and the warrants for the period (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Derivative Liability conversion features and the warrants for the period:
Derivative Liability balance, January 1, 2014	$ 137,353
Issuance of derivative financial instrument in 2014	267,411
Conversion of debt in 2014	(10,800)
Change in FMV of derivative liability	(127,051)
Derivative liability balance, March 31, 2014 (Unaudited)	$ 266,913

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Assumptions were used to determine the fair value (Tables)

3 Months Ended

Mar. 31, 2014

Assumptions were used to determine the fair value

Assumptions were used to determine the fair value

The following assumptions were used to determine the fair value of the options at date of grant:

Expected volatility (%)	95%-109%
Risk free rate	0.27%-0.38%
Expected term	2-3 years
Dividend yield	0%

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Notes payable consist of the following (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Notes payable consisted of the following
Convertible notes payable to Coventry Capital, LLC, net of discount	$ 810,000	$ 960,000
Convertible note payable to Stuart Subotnik, net of discount	263,801	247,201
Asher Enterprises	183,000	183,000
Note payable to QuickLoan Funding	37,573	65,010
Notes payable to Charlie Sheen	510,000	510,000
Convertible note payable to Tonaquint, net of discount	43,590	81,614
Other notes payable, net of discount	309,695	240,044
Total notes payable, net of discount	$ 2,157,659	$ 612,190

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Activities
Net loss	$ 1,669,357	$ (3,140,246)
Adjustments to reconcile net loss to cash flows used in operating activities
Depreciation & amortization expense	0	23,422
Stock based compensation	78,888	778,007
Shares issued for services	295,875	0
Interest expense - beneficial conversion features new note and discount amortization	72,034	249,710
Interest expense - noncash	153,024	0
Interest expense - contingencies	8,438	8,438
Change in fair value of derivative liability	(2,497,072)	564,061
Amortization of debt issue costs	10,601	10,601
Changes in operating assets and liabilities:
Prepaid expense	(32,137)	60,999
Accounts payable	(73,342)	24,775
Accrued liabilities	117,266	1,025,372
Cash flows used in operating activities	(197,068)	(394,861)
Investing Activities
Purchase of intangible assets	0	(12,767)
Purchase of equipment	0	(5,723)
Cash flows used in investing activities	0	(18,490)
Financing Activities
Bank overdraft	6,027	2,724
Proceeds from notes payable	199,650	260,591
Payments of notes payable	(68,879)	(20,695)
Related party note payable	(23,100)	140,807
Common stock subscription	75,000	0
Stock issued for cash	2,000	31,199
Cash flows provided by financing activities	190,698	414,626
Change in cash during period	(6,371)	1,275
Cash, beginning of period	6,371	831
Cash, end of period	$ 0	$ 2,106

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OTHER ASSETS

3 Months Ended

Mar. 31, 2014

OTHER ASSETS

OTHER ASSETS

5. – OTHER ASSETS

The Company recorded an amount of $127,214 debt issuance cost as other assets from the issuance of a convertible promissory note payable to Stuart Subotnik of $240,000; and will be amortized over the term of the note to interest expense. Amortization expense for the three months ended March 31, 2014 and 2013 amounted to $10,601. The balance of debt issuance costs as of March 31, 2014 and December 31, 2013 are $74,209 and $84,810, respectively.

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Coventry Capital, LLC Note (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Jan. 27, 2014	Jan. 31, 2013	Dec. 31, 2012
Coventry Capital, LLC Note:
Issued a total of convertible note payable					$ 950,000
Convertible notes carry an interest rate per month					1.00%
Convertible notes interest rate adjustment per year					3.00%
Recorded debt discount					714,077
Borrowed an additional from Coventry Capital, LLC				10,000
Recognized of interest expense for the amortization of the discount	0	178,819
Debt conversion agreement agreed to convert debt			$ 150,000
Debt conversion agreement agreed to convert debt shares of Company common stock			4,000,000

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Assumptions used to determine fair value of options at date of grant (Details)	3 Months Ended
	Mar. 31, 2014
Assumptions used to determine fair value of options at date of grant
Expected volatility (%) minimum	95.00%
Expected volatility (%) maximum	109.00%
Risk free rate minimum	0.27%
Risk free rate maximum	0.38%
Expected term	2-3 years
Dividend yield.	0.00%

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Derivative liability activity (Tables)

3 Months Ended

Mar. 31, 2014

Derivative liability activity

Derivative liability activity

The following table represents the Company’s derivative liability activity for both the embedded conversion features and the warrants for the three months ended March 31, 2014:

		Amount
Derivative Liability balance, January 1, 2014	$	4,272,031
Issuance of derivative financial instrument in 2014		153,024
Conversion of debt in 2014		(683,576)
Change in FMV of derivative liability		(2,497,072)
Derivative liability balance, March 31, 2014 (Unaudited)	$	1,244,407