UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549




FORM 10-Q


ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For The Quarterly Period Ended March 31, 2011oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period from                        to




Commission file number- 333-168941




VDO-PH INTERNATIONAL, INC


(Exact name of registrant as specified in the charter)




Nevada

27-2436336(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)
  2700 East Sunset Road, Building B, Suite 18, Las Vegas, Nevada

89120(Address of principal executive office)

(Zip Code)





(702) 570-7700


(Registrant's telephone number including area code)




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




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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.




Large Accelerated Filer o

Accelerated Filer o

Non-accelerated filer o

(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 o    NO ý




As of May 2, 2011, there were 20,166,768 shares of the Registrant's common stock, $.001 par value outstanding.




-1-


Table of Contents






VDO-PH INTERNATIONAL, INC..






Index




Page No.PART I—FINANCIAL INFORMATIONItem 1.

Financial Statements


3Balance Sheets (unaudited) at March 31, 2011 and December 31, 2010


4Statements of Operations (unaudited) for the three months ended March 31, 2011


5Statement of Stockholders' Equity


6Statements of Cash Flows (unaudited) for the three months ended March 31, 2011


7Notes to Financial Statements


8Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations


13Item 3.

Quantitative and Qualitative Disclosures About Market Risk


16Item 4.

Controls and Procedures


16PART II—OTHER INFORMATIONItem 1.

Legal Proceedings


17Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


17Item 3.

Default Upon Senior Securities


17Item 4.

Submissin of Matters to a Vote of Security Holders


17Item 5.

Other Information


17Item 6.

Exhibits


17Signature


18




-2-


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS




This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the Securities and Exchange Commission, or SEC, or in connection with oral statements made to the press, potential investors or others. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "expect," "estimate," "anticipate," "predict," "believe," "think," "plan," "will," "should," "intend," "seek," "potential" and similar expressions and variations are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.




Forward-looking statements in this report are subject to a number of known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those described in the forward-looking statements, including, but not limited to, the risks and uncertainties described in the section entitled "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on April 13, 2011, in this report as well as in the other documents we file with the SEC from time to time, and such risks and uncertainties are specifically incorporated herein by reference.




Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to update or revise forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. We caution you not to unduly rely on the forward-looking statements when evaluating the information presented in this report.





PART I—FINANCIAL INFORMATION




ITEM 1.    FINANCIAL STATEMENTS




The financial statements (audited) of VDO-PH INTERNATIONAL, INC. ("VDO" or the "Company") as of March 31, 2011 included herein have been prepared by the Company, without audit, pursuant to U.S. generally accepted accounting principles and the rules and regulations of the SEC. In addition, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC, on April 13, 2011.




-3-
 
  VDO-Ph International(A Development Stage Company)Balance SheetsMarch 31, 2011 and December 31, 2010  ASSETSMarch 31, 2011


December 31, 2010(Unaudited)Current Assets:Cash

$
578


$
11,328Prepaid expenses


-



1,026Total current assets


578



12,354Equipment, net


47,637



16,177Other AssetsSecurity deposit


1,000



1,000$
49,215


$
29,531LIABILITIES AND STOCKHOLDERS' EQUITYLiabilitiesAccounts payable and accrued expenses

$
14,040


$
11,055Loan payable - stockholder


21,156



7,954Total current liabilities


35,196



19,009Stockholders' Equity:Common stock, $0.001 par value; 100,000,000 shares authorized,19,798,768 and 19,660,268 shares issued and outstanding


19,800



19,661Additional paid in capital


232,254



163,143Deficit accumulated during development stage


(238,035
)


(172,282
)14,019



10,522$
49,215


$
29,531
  The accompanying notes are an integral part of these condensed consolidated financial statements.
 -4-
 VDO-Ph International(A Development Stage Company)StatementsofOperationsFor the Three Months Ended March 31, 2011 and 2010 and for the PeriodFrom April 8, 2010 (Inception) to March 31, 2011From April 8, 2010 (Inception) to March 31, 2011For the Three Months Ended March 31,2011



2010Revenue, net

$
-


$
-


$
-Expenses:General and administrative expenses


238,035



65,753



-238,035



65,753



-Net loss before other income and expenses


(238,035
)


(65,753
)


-Other income and (expenses)Interest expense


-



-



-Provision for income taxes


-



-



--



-



-Net loss

$
(238,035
)

$
(65,753
)

$
-Loss per common share - Basic andfully diluted

$
(0.01
)

$
(0.00
)


N/AWeighted average number of sharesoutstanding - Basic and fully diluted


19,590,251



19,675,298



-
 
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 -5-
 VDO-Ph International(A Development Stage Company)Statement of Stockholders' EquityFor the Period from April 8, 2010 (Inception) to March 31, 2011Additional Paid in Capital


Accumulated Deficit During Development Stage


Total Stockholders' EquityCommon StockShares


AmountIssuance of common shares for cash at$0.001 per share


13,333,328


$
13,334


$
-


$
-


$
13,334Issuance of common shares for servicesat $0.001 per share


6,000,000



6,000



-



-



6,000Issuance of common shares for cash at$0.50 per share


196,940



197



98,273



-



98,470Issuance of common shares for cash at$0.50 per share


1,000



1



499



-



500Issuance of common shares for services$0.50 per share


10,000



10



4,990



-



5,000Issuance of common shares for cash at$0.50 per share


4,000



4



1,996



-



2,000Issuance of common shares for servicesat $0.50 per share


4,000



4



1,996



-



2,000Issuance of common shares for cash at$0.50 per share


60,000



60



29,940



-



30,000Issuance of common shares for cash at$0.50 per share


20,000



20



9,980



-



10,000Issuance of common shares for cash at$0.50 per share


8,000



8



3,992



-



4,000Issuance of common shares for servicesat $0.50 per share


8,000



8



3,992



-



4,000Issuance of common shares for servicesat $0.50 per share


15,000



15



7,485



-



7,500Net loss


-



-



-



(172,282
)


(172,282
)Balance - December 31, 2010


19,660,268



19,661



163,143



(172,282
)


10,522Issuance of common shares for servicesat $0.50 per share


28,000



28



13,972



-



14,000Issuance of common shares for servicesat $0.50 per share


5,000



5



2,495



-



2,500Issuance of common shares for servicesat $0.50 per share


1,500



2



748



-



750Issuance of common shares for servicesat $0.50 per share


4,000



4



1,996



-



2,000Issuance of common shares for servicesat $0.50 per share


100,000



100



49,900



-



50,000Net loss


-



-



-



(65,753
)


(65,753
)Balance - March 31, 2011


19,798,768


$
19,800


$
232,254


$
(238,035
)

$
14,019
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 -6-
 VDO-Ph International(A Development Stage Company)Statements of CashFlowsFor the Three Months Ended March 31, 2011 and 2010 and for the PeriodFrom April 8, 2010 (Inception) to March 31, 2011From April 8, 2010 (Inception) to March 31, 2011


For the Three Months Ended March 31,2011



2010Cash flows from operating activities:Net loss

$
(238,035
)

$
(65,753
)

$
-Adjustments to reconcile net loss to net cash usedby operating activities:Common stock issued for services


19,500



-



-Depreciation expense


1,757



1,257



-Prepaid expenses


-



1,026



-Security deposit


(1,000
)


-



-Accounts payable and accrued expenses


14,040



2,985



-Net cash used by operating activities


(203,738
)


(60,485
)


-Cash flows from investing activities:Purchase of equipment


(49,394
)


(32,717
)


-Net cash used by investing activities


(49,394
)


(32,717
)


-Cash flows from financing activities:Proceeds from issuance of common stock


232,554



69,250



-Shareholder's loan


21,156



13,202



-Net cash provided by financing activities


253,710



82,452



-Net increase in cash


578



(10,750
)


-Cash at beginning of period


-



11,328



-Cash at end of period

$
578


$
578


$
-Supplemental cash flow information:Cash paid during the period for:Interest

$
-


$
-


$
-Income taxes

$
-


$
-


$
-
 
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 -7-
  VDO-Ph International(A Development Stage Company)Notes to Financial StatementsMarch 31, 2011 Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Organization
  VDO-Ph International ("VDO-Ph" or the "Company") was incorporated in Nevada in April 2010.  The Company is in the development stage and intends to sell a state-of-the-art telephony appliance for commercial and residential use employing proprietary software.  The appliance, which will serve as a digital telephone, full motion video and advanced computer system, will be marketed and sold through cable companies to their commercial and residential customers.
  Revenue Recognition
  In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
  Revenue will be recognized at the time the product is delivered or services are performed.  Provision for sales returns will be estimated based on the Company's historical return experience.  Revenue will be presented net of returns.
  Use of Estimates
  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
  Segment Information
  The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and Related Information".  Certain information is disclosed, per SFAS 131, based on the way management organizes financial information for making operating decisions and assessing performance.  The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.
  Net Loss Per Common Share
  Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period.  Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock.  There were no common stock equivalents at March 31, 2011.
 -8-
  VDO-Ph International(A Development Stage Company)Notes to Financial StatementsMarch 31, 2011 Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
  Income Taxes
  Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized.  Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
  ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information.  A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
  Stock-Based Compensation
  The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation.  ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model.  ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
  Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity.  The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.
  Recent Pronouncements
  In September 2009, Accounting Standards Codification ("ASC") became the source of authoritative GAAP recognized by the Financial Accounting Standards Board ("FASB") for nongovernmental entities, except for certain FASB Statements not yet incorporated into ASC.  Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative GAAP for registrants.
 -9-
  VDO-Ph International(A Development Stage Company)Notes to Financial StatementsMarch 31, 2011 Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
  Equipment
  Equipment, consisting of computer equipment, is stated at cost less accumulated depreciation.  Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, of five years.
  The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.  If the carrying amount of an asset exceeds the estimated future cash flows, an impairment loss will be recorded by the amount the carrying value exceeds the fair value of the asset.
  Note 2.  EQUIPMENT (NET)
  Equipment is recorded at cost and consisted of the following at March 31, 2011:
  Computer equipment

$
16,678Automobile


32,71749,395Less: accumulated depreciation


(1,758
)$
47,637
 Depreciation for the three months ended March 31, 2011 was $1,257.
 Note 3.  LOAN PAYABLE - STOCKHOLDER
  During the period ended March 31, 2011 a stockholder of the Company advanced the Company $13,202 to pay for certain expenses.  The loan bears no interest and is payable on demand.
  Note 4.  STOCKHOLDERS' EQUITY
  In April 2010 the Company issued 13,333,328 shares of common stock at par value.
  In April 2010 the Company issued 6,000,000 shares of common stock at par value for services provided to the Company.
  -10-
  VDO-Ph International(A Development Stage Company)Notes to Financial StatementsMarch 31, 2011 Note 4.  STOCKHOLDERS' EQUITY (continued)
  In April 2010 the Company issued 196,940 shares of common stock at $0.50 per share.
  In April 2010 the Company issued 1,000 shares of common stock at $0.50 per share.
  In April 2010 the Company issued 10,000 shares of common stock at $1.00 per share for services provided to the Company.
  In September 2010 the Company issued 4,000 shares of common stock at $0.50 per share.
  In September 2010 the Company issued 4,000 shares of common stock at $.50 per share for services provided to the Company.
  In November 2010 the Company issued 60,000 shares of common stock at $0.50 per share.
  In December 2010 the Company issued 20,000 shares of common stock at $0.50 per share.
  In December 2010 the Company issued 8,000 shares of common stock at $0.50 per share.
  In December 2010 the Company issued 8,000 shares of common stock at $.50 per share for services provided to the Company.
  In December 2010 the Company issued 15,000 shares of common stock at $.50 per share for services provided to the Company.
  In February 2011 the Company issued 28,000 shares of common stock at $0.50 per share for services provided to the Company.
  In February 2011 the Company issued 5,000 shares of common stock at $0.50 per share for services provided to the Company.
  In February 2011 the Company issued 1,500 shares of common stock at $0.50 per share for services provided to the Company.
  In February 2011 the Company issued 4,000 shares of common stock at $0.50 per share for services provided to the Company.
 In February 2011 the Company issued 100,000 shares of common stock at $0.50 per share for services provided to the Company.
 -11-
  VDO-Ph International(A Development Stage Company)Notes to Financial StatementsMarch 31, 2011 Note 5.  COMMITMENTS AND CONTINGENCIES
  The Company leases its offices pursuant to an agreement entered into in January 2011.  The lease calls for minimum monthly lease payments plus its pro-rata share of certain operating expenses.  Rent expense for the three months ended March 31, 2011 totaled $2,012.
  Note 6.  INCOME TAXES
  The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.  The sources and tax effects of the differences are as follows:
  Income tax provision at the federalstatutory rate

25
%Effect of operating losses

(25)
%0
%
 
 As of March 31, 2011, the Company has a net operating loss carryforward of approximately $238,000.  This loss will be available to offset future taxable income.  If not used, this carryforward will expire in 2030. The deferred tax asset relating to the operating loss carryforward has been fully reserved at March 31, 2011.  The principal difference between the operating loss for income tax purposes and reporting purposes results from the issuance of common shares for services.
  Note 7.  BASIS OF REPORTING
  The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
  The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature.  For the period from inception to March 31, 2011, the Company incurred a net loss of approximately $238,000.  In addition, the Company has no significant assets or revenue generating operations.
 
 The Company currently does not have sufficient cash to sustain itself for the next 12 months, and will require additional funding in order to execute its plan of operations and to continue as a going concern.  To meet its cash needs, management expects to raise capital through a private placement offering.  In the event that this funding does not materialize, certain stockholders have agreed, orally, to loan, on a non-interest bearing demand basis, sufficient funds to maintain the Company's operations for the next 12 months.
  The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
  
 -12-


ITEM 2:    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




The following discussion should be read in conjunction with (i) our financial statements for the years ended December 31, 2010 together with the notes to these financial statements; and (ii) the section entitled “Business” that appears elsewhere in this report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.





The statements in this report include forward-looking statements.  These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations.  You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur.  You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology.  These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers;  and, our ability to maintain a level of investment that is required to remain competitive.  Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates and conditions in the advertising industry in particular; and, the continued employment of our key personnel and other risks associated with competition.





For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements see the “Liquidity and Capital Resources” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this item of this report and the other risks and uncertainties that are set forth elsewhere in this report or detailed in our other Securities and Exchange Commission reports and filings.  We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.





Overview





We are a development stage company, incorporated on April 8, 2010 and have not generated or realized any revenues from our business operations. We plan to enter into the telephony business by way of our software that enables a computer to be three services in one.




Our Officers and Directors are responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for the administration of the controls. Should they not have sufficient experience, they may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the Securities and Exchange Commission which ultimately could cause you to lose your investment. The family members including the management team meet via VDO-Ph’s video telephony method on a daily basis.  Their discussions cover such topics as competition growth, new companies entering the video market, interviewing potential candidates for various managerial positions in the Company, review of Company policies with relations to Human Resources, personnel record keeping, payroll review, bidding of work benches and other requirements needed for production and a broad discussion as to what the Company’s future web site needs to do and what they should look at.




The date of incorporation is not indicative of the time the company was actually founded by the family which was May, 2009 but is representative of the time and date when it was determined by the family members after 12 months of initial research and analysis of the potential financial requirements and financial returns that development of a new business telephony system could require/achieve. From information gathered by an out sourced research company on past, current and future business telephone services the family determined (with this data) to take the next step to analyze (by hiring several programming companies) the complications, if any, in development of the proposed new telephony system.  We believe the Company no longer meets the definition of a “shell” company since the Company has ceased as an issuer described by Rule 144(i)(1)(i) in January 2011.  This is based on the fact that its software platform represents a substantial asset other than cash or cash equivalents and that the Company has a viable product to market to the major cable companies.  In addition, the Company has built-out its facilities for the purpose of increasing its production capabilities.  Substantial man hours and capital have been expended by the Company in the process of developing its new software operating system to be utilized as a telephony appliance.




As of March 31, 2011, we had no revenues and had total expenses of $65,753 for the same period. As of March 31, 2011, we had a net income of ($65,753).


The new appliance developed provides a combination of computer, internet, digital telephone and video telephone capabilities and provide the business market with the same advances the domestic market has had over the last few years with cellular, web cams, and 4G networks




-13-


The Company determined that the three systems that could be used for the appliance were Hp, Micros and Dell. These computers were all running Windows 7 and had no conflict to the new telephony Operating System. In addition, all three fit the design desires. In talking with these firms, it was concluded that HP could provide the quantities that may be required and at a very reasonable OEM fee structure. The Company completed the development of the software and presented a viable product in January 2011.




Results of Operations




Since January 2011, the Company has received continued interest form Cox Media for the product.  No formal agreements have been reached; however, an agreement has been delivered to Hewlett Packard (“HP”) subject to a trial period testing the telephony appliance.  The Company has had meetings with HP in an effort to assure a production capability.  The Company has also met with Logitech to negotiate a deal utilizing the Logitech web cam system in conjunction with the Company’s product.  Those discussions are ongoing.  The Company has expanded its operational facilities and intends to have additional space of 150,000 square feet available for operations in the fourth quarter of 2011.


Impact of Inflation





We believe that the rate of inflation has had negligible effect on us.  We believe we can absorb most, if not all, increased non-controlled operating costs by operating our Company in the most efficient manner possible.




Cash Flows from Investing Activities





We made no investments as of March 31, 2011.





Cash Flows from Financing Activities





We have financed our operations from the issuance of equity securities and loans from family members.  Net cash provided by financing activities through March 31, 2011 relates to the sale of shares of common stock to shareholders in private transactions exempt from registration pursuant to Rule 504 of Regulation D of the Securities Act of 1933, as amended. We intent to continue to raise expansion capital through private placement or debt financing.


Intangible Assets





There were no intangible assets during the period ended March 31, 2011.





Material Commitments





There were no material commitments for the period ended March 31, 2011.





Off-Balance Sheet Arrangements





We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.





Critical Accounting Policies





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





-14-





We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.





Cash and Cash Equivalents





We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. We have no cash equivalents.





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.





Income Taxes





The Company accounts for income taxes as outlined in ASC 740 “Income Taxes”, which was previously Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.





Fair Value of Financial Instruments





The Company considers that the carrying amount of financial instruments, including accounts payable, approximates fair value because of the short maturity of these instruments.





Share Based Payments


(included in ASC 718 “Compensation-Stock Compensation”)





In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees or independent contractors are required to provide services. Share-based compensation arrangements include stock options and warrants, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.





The Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the share-based payments.





Recent Accounting Pronouncements





The Company has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.




-15-


ITEM 3:    QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK




Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in results of our operations and cash flows. In the ordinary course of business, we are exposed to interest rate and foreign currency exchange rate risks.




ITEM 4.    CONTROLS AND PROCEDURES.





Based upon the required evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2011 our disclosure controls and procedures were adequate and effective to ensure that information was gathered, analyzed and disclosed on a timely basis.




There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended March 31, 2011, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.






-16-


PART II—OTHER INFORMATION






ITEM 1.    LEGAL PROCEEDINGS.





Not applicable.




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





Not applicable.





ITEM 3.   DEFAULT UPON SENIOR SECURITIES





Not applicable.





ITEM 4.   SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS





There have been no matters submitted to a vote of the Company’s shareholders.





ITEM 5.   OTHER INFORMATION





None.





ITEM 6.   EXHIBITS





No.
Exhibit31.1
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002








-17-


SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





VDO-PH INTERNATIONAL, INC.May 19, 2011
By:
/s/ Valeria StringerPresident, Director, Principal Financial Officer





Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons in the capacities and on the dates indicated.




Signature

Title

Date/s/ Valeria Stringer

President, Director

May 19, 2011Valeria Stringer

Principal Financial/s/ Elizabeth Twitty

Secretary and Director

May 19, 2011Elizabeth Twitty/s/ Marion Mattson

Director

May 19, 2011Marion Mattson








-18-


INDEX TO EXHIBITS





No.
Exhibit31.1
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





-19-