U.S. Securities and Exchange Commission

Washington, D.C. 20549



Form 10-Q



|[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934  
|----------------------------------------------------------------------------------------------
|                                                                                              
|For the quarterly period ended: June 30, 2012                                                 
|                                                                                              
|[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                                                              
|For the transition period from _________ to _________                                         



Commission File No. 001-32032



Dewmar International BMC, Inc.

(Name of Registrant in its Charter )



|NEVADA                         |  | 83-0375241                
|------------------------------ |  | --------------------------
|State or other jurisdiction of |  | (I.R.S. Employer I.D. No.)
|incorporation or organization) |  |                           



|132 E. Northside Dr. Suite C Clinton, M 39056
|---------------------------------------------
|(Address of principal executive offices)     



(601) 488-4360

(Registrant’s telephone number,
including area code)



Indicate by check mark whether the Issuer (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [  ]



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).

[X] Yes [  ] No



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



|Large Accelerated Filer | [  ] | Accelerated Filer         | [  ]
|----------------------- | ---- | ------------------------- | ----
|Non-Accelerated Filer   | [  ] | Smaller reporting company | [X] 



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] Yes [X] No



APPLICABLE ONLY TO CORPORATE ISSUERS:



As of August 14, 2012 the registrant had 59,233,000 issued and outstanding
shares of common stock .
























Dewmar International BMC, Inc.



TABLE OF CONTENTS



|                                                                                              |  | Page
|--------------------------------------------------------------------------------------------- |  | ----
|                                                                                              |  |     
|PART I – FINANCIAL INFORMATION                                                                |  | 3   
|Item 1. Financial Statements:.                                                                |  |     
|Consolidated Balance Sheets (unaudited)                                                       |  | F-1 
|Consolidated Statements of Operations (unaudited)                                             |  | F-2 
|Consolidated Statements of Cash Flows (unaudited)                                             |  | F-3 
|Notes to Consolidated Financial Statements (unaudited)                                        |  | F-4 
|Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 5   
|Item 3. Quantitative and Qualitative Disclosure About Market Risk                             |  | 8   
|Item 4. Controls and Procedures                                                               |  | 8   
|PART II – OTHER INFORMATION                                                                   |  |     
|Item 1. Legal Proceedings.                                                                    |  | 9   
|Item 1A. Risk Factors.                                                                        |  | 10  
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 10  
|Item 3. Defaults Upon Senior Securities                                                       |  | 10  
|Item 4. Mine Safety Disclosures                                                               |  | 10  
|Item 5. Other Information.                                                                    |  | 10  
|Item 6. Exhibits                                                                              |  | 11  
|SIGNATURES                                                                                    |  | 12  



2







|
|



PART I - FINANCIAL INFORMATION



Forward-Looking Information



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



Examples of forward-looking statements include:



|● |  | the timing of the development of future products;
|- |  | -------------------------------------------------

| |  | 
| |  | 

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

| |  | 
| |  | 

|● |  | statements of our plans and objectives;
|- |  | ---------------------------------------

| |  | 
| |  | 

|● |  | statements regarding the capabilities of our business operations;
|- |  | -----------------------------------------------------------------

| |  | 
| |  | 

|● |  | statements of expected future economic performance;
|- |  | ---------------------------------------------------

| |  | 
| |  | 

|● |  | statements regarding competition in our market; and
|- |  | ---------------------------------------------------

| |  | 
| |  | 

|● |  | assumptions underlying statements regarding us or our business.
|- |  | ---------------------------------------------------------------



The
ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss
our known material risks underItem 1.A “Risk Factors contained in the Company’s Annual Report on Form 10K/A
for the year ended December 31, 2011. Many factors could cause our actual results to differ materially
from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements.



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



3







|
|



Item 1. Financial Statements



DEWMAR INTERNATIONAL BMC, INC. (fka CONVENIENTCAST,
INC.)



INDEX TO FINANCIAL STATEMENTS

JUNE 30, 2012



|Consolidated Balance Sheets as of June 30, 2012
    (unaudited) and December 31, 2011 | F-1
|------------------------------------------------------------------------------------- | ---
|                                                                                      |    
|Consolidated Statements of Operations for the
    Three and Six Months Ended          |    
|June 30, 2012 and 2011 (unaudited)                                                    | F-2
|                                                                                      |    
|Consolidated Statements of Cash Flows for the Six Months Ended                        |    
|June 30, 2012 and 2011 (unaudited)                                                    | F-3
|                                                                                      |    
|Notes to Consolidated Financial Statements                                            | F-4



4







DEWMAR INTERNATIONAL BMC, INC. (fka CONVENIENTCAST,
INC.)

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2012 (unaudited) and DECEMBER 31,
2011



|                                                                                                                                  |  |               |          |   |                   |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | - | ----------------- | -
|                                                                                                                                  |  | June 30, 2012 |          |   | December 31, 2011 |  
|                                                                                                                                  |  |               |          |   |                   |  
|ASSETS                                                                                                                            |  |               |          |   |                   |  
|Current Assets                                                                                                                    |  |               |          |   |                   |  
|Cash and cash equivalents                                                                                                         |  | $             | 32,216   |   |                   | $
|Accounts receivable, net of allowance for doubtful account of $0 and $34,634                                                      |  |               | 22,479   |   |                   |  
|Related party receivable                                                                                                          |  |               | 6,679    |   |                   |  
|Advances to related party                                                                                                         |  |               | 9,332    |   |                   |  
|Prepaid expenses and other current assets                                                                                         |  |               | 4,403    |   |                   |  
|Inventory                                                                                                                         |  |               | 31,948   |   |                   |  
|Total current assets                                                                                                              |  |               | 107,057  |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|Property, Plant and Equipment, net of accumulated depreciation of $ 6,785 and $5000, respectively                                 |  |               | 14,370   |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|TOTAL ASSETS                                                                                                                      |  | $             | 121,427  |   |                   | $
|                                                                                                                                  |  |               |          |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                             |  |               |          |   |                   |  
|LIABILITIES                                                                                                                       |  |               |          |   |                   |  
|Current Liabilities                                                                                                               |  |               |          |   |                   |  
|Accounts Payable                                                                                                                  |  | $             | 55,999   |   |                   | $
|Accrued liabilities                                                                                                               |  |               | 436,955  |   |                   |  
|Advances from related party                                                                                                       |  |               | -        |   |                   |  
|Common stock payable                                                                                                              |  |               | 315,000  |   |                   |  
|Total current liabilities                                                                                                         |  |               | 807,954  |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|TOTAL LIABILITIES                                                                                                                 |  |               | 807,954  |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|COMMITMENTS AND CONTINGENCIES (Note 5)                                                                                            |  |               |          |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|STOCKHOLDERS’ DEFICIT                                                                                                             |  |               |          |   |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|Preferred stock, par $0.001, 25,000,000 shares authorized and 0 shares issued and outstanding, respectively                       |  |               | -        |   |                   |  
|Common stock, par $0.001, 100,000,000 shares authorized and 59,233,000 and 58,495,000 shares issued and outstanding, respectively |  |               | 59,233   |   |                   |  
|Additional paid in capital                                                                                                        |  |               | 104,159  |   |                   |  
|Accumulated deficit                                                                                                               |  |               | (849,919 | ) |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|TOTAL STOCKHOLDERS’ DEFICIT                                                                                                       |  |               | (686,527 | ) |                   |  
|                                                                                                                                  |  |               |          |   |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                       |  | $             | 121,427  |   |                   | $



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



F-1







DEWMAR INTERNATIONAL BMC, INC. (fka CONVENIENTCAST,
INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2012 and
2011

|                                                              |  | Three Months Ended |            |   | Six Months Ended |  
|------------------------------------------------------------- |  | ------------------ | ---------- | - | ---------------- | -
|                                                              |  | June 30,           |            |   | June 30,         |  
|                                                              |  | 2012               |            |   | 2011             |  
|                                                              |  |                    |            |   |                  |  
|Revenue, net                                                  |  | $                  | 101,874    |   |                  | $
|                                                              |  |                    |            |   |                  |  
|Cost of goods sold                                            |  |                    | 47,681     |   |                  |  
|                                                              |  |                    |            |   |                  |  
|Gross profit                                                  |  |                    | 54,196     |   |                  |  
|                                                              |  |                    |            |   |                  |  
|OPERATING EXPENSES:                                           |  |                    |            |   |                  |  
|Occupancy and related expenses                                |  |                    | 8,548      |   |                  |  
|General and administrative                                    |  |                    | 484,136    |   |                  |  
|Contract labor                                                |  |                    | 33,232     |   |                  |  
|Marketing and advertising                                     |  |                    | 6,899      |   |                  |  
|Total operating expenses                                      |  |                    | 532,815    |   |                  |  
|                                                              |  |                    |            |   |                  |  
|NET OPERATING INCOME (LOSS)                                   |  |                    | (478,622   | ) |                  |  
|                                                              |  |                    |            |   |                  |  
|OTHER INCOME (EXPENSE)                                        |  |                    |            |   |                  |  
|Interest expense                                              |  |                    | 15         |   |                  |  
|Interest income                                               |  |                    | 1          |   |                  |  
|Loss on extinguishment of debt                                |  |                    | -          |   |                  |  
|Total other income (expense)                                  |  |                    | 14         |   |                  |  
|                                                              |  |                    |            |   |                  |  
|NET LOSS BEFORE INCOME TAXES                                  |  |                    | (442,636   | ) |                  |  
|                                                              |  |                    |            |   |                  |  
|PROVISION FOR INCOME TAXES                                    |  |                    | -          |   |                  |  
|                                                              |  |                    |            |   |                  |  
|NET LOSS                                                      |  | $                  | (478,636   | ) |                  | $
|                                                              |  |                    |            |   |                  |  
|Net income per share, basic and diluted                       |  | $                  | (0.00      | ) |                  | $
|Weighted-average common shares outstanding, basic and diluted |  |                    | 58,944,006 |   |                  |  





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



F-2







DEWMAR INTERNATIONAL BMC, INC.
(fka CONVENIENTCAST, INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2012



|                                                                            |  | June 30, 2012 |          |   | June 30, 2011 |  
|--------------------------------------------------------------------------- |  | ------------- | -------- | - | ------------- | -
|                                                                            |  |               |          |   |               |  
|Cash flows from operating activities:                                       |  |               |          |   |               |  
|Net loss                                                                    |  | $             | (573,106 | ) |               | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |               |          |   |               |  
|Depreciation expense                                                        |  |               | 1,785    |   |               |  
|Stock-based compensation                                                    |  |               | 354,000  |   |               |  
|Loss on extinguishment of debt                                              |  |               | 5,000    |   |               |  
|Changes in operating assets and liabilities :                               |  |               |          |   |               |  
|Accounts receivable                                                         |  |               | 90,848   |   |               |  
|Inventory                                                                   |  |               | 26,214   |   |               |  
|Prepaid expenses and other current assets                                   |  |               | 7,060    |   |               |  
|Accrued liabilities – related party                                         |  |               | -        |   |               |  
|Accounts payable and accrued liabilities                                    |  |               | 29,986   |   |               |  
|Net cash provided by (used in) operating activities                         |  |               | (58,213  | ) |               |  
|                                                                            |  |               |          |   |               |  
|Cash flows from investing activities:                                       |  |               |          |   |               |  
|Advances to related party                                                   |  |               | -        |   |               |  
|Net cash used in investing activities                                       |  |               | -        |   |               |  
|                                                                            |  |               |          |   |               |  
|Cash flows from financing activities:                                       |  |               |          |   |               |  
|Advances from related party                                                 |  |               | (1,076)  |   |               |  
|Cash proceeds from borrowings                                               |  |               |          |   |               |  
|Cash used for repayment of notes payable                                    |  |               | -        |   |               |  
|Cash proceeds from issuance of common stock                                 |  |               | -        |   |               |  
|Net cash used in financing activities                                       |  |               | (1,076)  |   |               |  
|                                                                            |  |               |          |   |               |  
|Net change in cash and cash equivalents                                     |  |               | (59,289  | ) |               |  
|Cash and cash equivalents, at beginning of period                           |  |               | 91,506   |   |               |  
|Cash and cash equivalents, at end of period                                 |  | $             | 32,216   |   |               | $
|                                                                            |  |               |          |   |               |  
|Supplemental cash flow information:                                         |  |               |          |   |               |  
|Interest paid                                                               |  | $             | -        |   |               | $
|                                                                            |  |               |          |   |               |  
|Supplemental noncash investing and financing activities:                    |  |               |          |   |               |  
|Extinguishment of debt for common stock                                     |  | $             | 43,800   |   |               | $
|Increase in common stock payable                                            |  | $             | 315,000  |   |               | $



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



F-3







DEWMAR INTERNATIONAL BMC, INC. (fka CONVENIENTCAST,
INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012



NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS



On October 28, 2011, pursuant
to an Exchange Agreement (“Agreement”), Dewmar International BMC, Inc. (fka Convenientcast, Inc.) (“Dewmar
International BMC, Inc. or the “Company”), a publicly reporting Nevada corporation, acquired DSD Network of
America, Inc. (“DSD”), a Nevada corporation, in exchange for the issuance of 40,000,000 shares of common stock of
Dewmar International BMC, Inc. (the “Exchange Shares”), a majority of the common stock, to the former owners of
DSD. In conjunction with the Merger, DSD became a wholly-owned subsidiary of the Company.



For financial accounting purposes, this acquisition
(referred to as the “Merger”) was a reverse acquisition of Dewmar International BMC, Inc. by DSD and was treated as
a recapitalization. Accordingly, the financial statements were prepared to give retroactive effect of the reverse acquisition completed
on October 28, 2011, and represent the operations of DSD prior to the Merger.



As of the time of the Merger, Dewmar International
BMC, Inc. held minimal assets and was a developmental stage company. Following the Merger, the Company, through DSD, is a manufacturer
of its Lean Slow Motion PotionTM brand relaxation beverage, which was launched by DSD in September of 2009. After the Merger,
the Company operates through one operating segment.



NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



Basis of Presentation



The Company prepares its financial statements
in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for
the six month period ended June 30, 2012 are not necessarily indicative of the results for the full years. While management of
the Company believes that the disclosures presented herein and adequate and not misleading, these interim financial statements
should be read in conjunction with the audited combined financial statements and the footnotes thereto for the periods ended December
31, 2011 filed in our Annual Report on Form 10K/A filed on August 3, 2012.



Certain amounts in prior periods have been
reclassified to conform to current period presentation.



Principles of Consolidation



The consolidated financial statements include
the accounts of the Company and DSD, its only subsidiary. All material intercompany accounts and transactions have been eliminated.



Use of Estimates



The preparation of financial statements in
conformity with generally accepted accounting principles in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.



F-4







Cash and Cash Equivalents



Cash and cash equivalents consist primarily
of cash on deposit and money market accounts, which are readily convertible into cash and purchased with original maturities of
three months or less. These investments are carried at cost, which approximates fair value.



The Company maintains its cash in institutions
insured by the Federal Deposit Insurance Corporation (“FDIC”). Beginning December 31, 2011 through June 30, 2012, all
noninterest-bearing transaction accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions.
This unlimited insurance coverage is separate from, and in addition to, the insurance coverage provided to the depositor’s
other accounts held by a FDIC-insured institution, which are insured for balances up to $250,000 per depositor until December 31,
2013. At June 30, 2012 and December 31, 2011, the amounts held in banks did not exceed the insured limits.





Accounts Receivable and Allowance for
Doubtful Accounts



The Company’s accounts receivable were
composed of receivables from customers for sales of products. The Company performs credit evaluations prior to selling products
or granting credit to its customers and generally does not require collateral.



The
Company’s trade accounts receivable are typically collected within 60 days from the date of sale. The Company monitors its
exposure to losses on trade accounts receivable and maintains an allowance for potential losses and adjustments. The Company determines
its allowance for doubtful accounts based on the evaluation of the aging of accounts receivable and detailed analysis of high-risk
customers’ accounts, and the overall market and economic conditions of its customers. Past due trade accounts receivable
balances are written off when the Company’s collection efforts have been unsuccessful in collecting the amount due. At June
30, 2012 and December 31, 2011, the allowance for doubtful accounts was$0 and $34,634. During the six months ended
June 30, 2012, the company wrote off $42,753 in accounts receivable.



Inventory Held by Third Party



Inventory costs are determined principally
by the use of the first-in, first-out (FIFO) costing method and are stated at the lower of cost or market, including provisions
for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of goods sold during the period
spoilage is incurred.



Fixed Assets



Leasehold improvements, property and equipment
are stated at cost less accumulated depreciation and amortization. Expenditures for property acquisitions, development, construction,
improvements and major renewals are capitalized. The cost of repairs and maintenance is expensed as incurred. Depreciation is provided
principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 10 years. Leasehold
improvements are amortized over the shorter of the lease term, which generally includes reasonably assured option periods, or the
estimated useful lives of the assets. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation
are removed from the accounts and any gain or loss is reflected in ”Gain or Loss from Operations”.



The estimated useful lives are:



|Furniture and fixtures |  | 3-10 years
|---------------------- |  | ----------
|Equipment              |  | 3-7 years 
|Vehicles               |  | 3-7 years 



F-5







Revenue Recognition Policy



The Company recognizes revenue when the product
is received by and title passes to the customer. The Company’s standard terms are ‘FOB’ receiving point. If a
customer receives any product that they consider damaged or unacceptable, the customer must document any such damages or reasons
for it not to be accepted on the original invoice upon delivery and then inform the Company within 72 hours of receipt of the product.
The Company does not accept returns of product for reasons other than damage.



We record estimates for reductions to revenue
for customer programs and incentives, including price discounts, volume-based incentives, and promotions and advertising allowances.
No products are sold on consignment. Revenue is shown net of sales allowances on the accompanying statements of operations.



Cost of Goods Sold



The Company’s cost of
goods sold includes all costs of beverage production, which primarily consist of raw materials such as concentrate, aluminium
cans, trays, shrink wrap, can ends, labels and packaging materials. Additionally, costs incurred for shipping and
handling charges are included in cost of goods sold. The Company does not bill customers for cost of shipping unless
the Company incurs additional charges such as refusing initial shipment or not being able to receive shipment at
their prescheduled time with the freight company.



Advertising Expense



The Company recognizes advertising expense
as incurred. The Company recognized advertising expense of $5,124 and $31,251 for the six months ended June 30, 2012 and 2011,
respectively.



Income Taxes



The Company accounts for its income taxes using
the liability method, whereby deferred tax assets and liabilities are established for the future tax consequences of temporary
differences between the financial statement carrying amounts of assets and liabilities and their tax basis. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than
not that the Company will not realize the tax assets through future operations.



The Company’s federal and state income tax
returns for the years ended 2009, 2010 and 2011 are open to examination. As of June 30, 2012, the Company evaluated its
open tax years in all known jurisdictions. Based on this evaluation, the Company did not identify any uncertain tax
positions. We will account for interest and penalties relating to uncertain tax positions in the current period statement of
operations as necessary.



Fair value of Financial Instruments



U.S. GAAP establishes a fair value hierarchy
which has three levels based on the reliability of the inputs to determine the fair value. These levels include: Level 1, defined
as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other
than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs
for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.



The Company’s financial instruments consist
primarily of cash and cash equivalents, accounts receivables and payables and accrued liabilities. The carrying values of these
financial instruments approximate their respective fair values as they are either short-term in nature or carry interest rates
that approximate market rates.



Share-Based Compensation



The Company recognizes all share-based payments
to employees, including grants of Company stock options to Company employees, as well as other equity-based compensation arrangements,
in the financial statements based on the grant date fair value of the awards. Compensation expense is generally recognized over
the vesting period. During the six months ending June 30, 2012 and 2011, the Company issued no stock options or other share-based
payments to employees.



F-6







Income (Loss)
per Share



Basic net income (loss) per common share is
computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net income
(loss) per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents. In periods when losses are reported the weighted-average number of common
shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. At June 30, 2012 there were
no such common stock equivalents outstanding.



Concentration of Risks



The Company’s operations and future business
model are dependent in a large part on the Company’s ability to execute its business model. The Company’s inability
to meet its sales objectives may have a material adverse effect on the Company’s financial condition.



Most of the Company’s sales are derived
from beverage distributors located in the Southern region of the United States. This concentration of sales may have a negative
impact on total sales in the event of a decline in the local economies.



New Accounting Pronouncements



The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial
position or cash flow.



NOTE 3. GOING CONCERN



The accompanying financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which
contemplates continuation of the Company as a going concern. The Company has incurred net losses and has an accumulated deficit
totaling $849,919. The Company also had negative working capital. The Company’s operating results are subject to numerous
factors, including fluctuation in the cost of raw materials, changes in consumer preference for beverage products and competitive
pricing in the marketplace. These conditions give rise to substantial doubt about the Company’s ability to continue as a
going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported
asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue
as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing
or sale of its common stock as may be required and ultimately to attain profitability.



Management’s plan, in this regard, is to raise financing through
equity financing to augment the cash flow it receives from product sales and finance the continuing development for the next twelve
months.



NOTE 4. INCOME TAXES



No provision for federal income taxes has been
recognized for the six months ended June 30, 2012 and the years ended December 30, 2011 as the Company incurred a net operating
loss for income tax purposes in each year and has no carryback potential.



Significant components of the Company’s
deferred tax liabilities and assets as of June 30, 2012 and December 31, 2011 were as follows:



|                         |  | June 30, 2012 |         |   | December 31, 2011 |  
|------------------------ |  | ------------- | ------- | - | ----------------- | -
|Deferred tax assets:     |  |               |         |   |                   |  
|Net operating loss       |  | $             | 73,869  |   |                   | $
|                         |  |               | 73,869  |   |                   |  
|Less valuation allowance |  |               | (73,869 | ) |                   |  
|                         |  | $             | -       |   |                   | $



F-7







The Company has provided a full valuation allowance
for net deferred tax assets as it is more likely than not that these assets will not be realized.



At June 30, 2012, the Company
had net operating loss carryforwards of approximately $217,000 for federal income tax purposes. These net operating loss carryforwards
begin to expire in 2024.



NOTE 5. STOCKHOLDERS’ DEFICIT



Shares Issued for
Services



On November 7, 2011, the
Company entered into an Advisory Services Agreement (“Advisory Agreement”) with an unrelated investment advisory company
(the “Advisor”), whereas the Advisor agreed to perform certain advisory services in exchange for 50,000 shares, valued
at $4,500 ($0.09 per share), of the Company’s common stock, to be delivered within 10 days after execution of the Advisory
Agreement, in addition to reimbursement by the Company for the $4,500 DTC Application fee. The shares issued pursuant to the Advisory
Agreement are restricted shares. The term of the Advisory Agreement commenced on November 7, 2011 and was set to expire upon the
Company’s receipt of either an approval or a denial of their DTC Eligibility Request by DTC. On March 14, 2012, the Company
completed the final approved DTC opinion and it is currently expecting notification of its DTC Eligibility Request.



During
the six months ended June 30, 2012, the Company exchanged 300,000 shares of restricted common stock for
consulting services . The value was determined using the market value of the shares issued which was $39,000
resulting in an Additional Paid in Capital amount of $38,700.



During the six months ended
June 30, 2012, the company entered into two consulting agreements with the commitment to issue a total of 2,100,000 shares at
the signing of the agreement in April 2012. As of June 30, 2012, the shares had not been issued, but the Company recorded a
common stock payable with a corresponding increase in stock based compensation in the amount of $315,000, which is the
market value of the shares to be issued under the consulting arrangements.



NOTE
6. RELATED PARTY TRANSACTIONS



Sales
to Related Party Distributor



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



The
Distributor pays the Company on a per case basis which is consistent with terms between the Company and third party distributors.
Since the Company uses a substantial amount of the Distributor’s inventory as samples and promotions, the Company offers
the Distributor credit terms of “on consignment.” During the six months ended June 30, 2012 and 2011, the Company recognized
revenue from product sales to the Distributor of $12,720 and $39,880, respectively, which represented 4% and 5%, respectively,
of total product revenue recognized by the Company. At June 30, 2012 and December 31, 2011, receivable from the Distributor was
$4,076 and $3,000 respectively.





Shipping
Reimbursements from Related Party



At
June 30, 2012 and December 31, 2011, the Company had outstanding accounts receivable of $2,603, respectively, from a company
owned by the CEO’s wife. These receivables represent shipping reimbursements erroneously billed by logistics and
shipping companies. The Company paid these invoices and then in turn generated invoices to the company owned by the
CEO’s wife for reimbursement.



F-8







Advances to
Related Party



During
the period beginning February 2011 through April 2011, the Company advanced $49,484 to a company owned by the CEO’s wife.
As of June 30, 2012 and December 31, 2011, that company had repaid $40,516 of these advances resulting in outstanding advances
due of $9,332 as of these dates.



Acquisition
of Fixed Assets from Related Party



During the period ended
November 30, 2011, the Company purchased two used vehicles from companies owned by the CEO for a total of $7,850. There were no
such purchases from related parties for the period ended June 30, 2012.



Advances from Related
Party



During 2011, the Company
received related party advances from a company majority owned by the CEO and of which the CEO was the sole officer and director
in the aggregate amount of $38,800. On March 7, 2012, the Company issued 438,000 restricted shares of common stock to settle the
$38,800 advances from third parties that were outstanding at December 31, 2011. The 438,000 restricted shares were valued at $43,800
($0.10 per share) with a par value of $438 resulting in a loss on extinguishment of debt of $5,000.



NOTE 7. LEGAL PROCEEDINGS



The Company is aggressively
defending itself in all of the below proceedings. The Company’s management believes the likelihood of future liability to
the Company for these contingencies is remote, and the Company has not recorded any liability for these legal proceedings at June
30, 2012 and December 31 2011. While the results of these matters cannot be predicted with certainty, the Company’s management
believes that losses, if any, resulting from the ultimate resolution of these proceedings will not have a material adverse effect
on the Company’s financial position, results of operations, or cash flows.



During January 2011, a claim
was filed against DSD by Corey Powell, in Ascension Parish, LA 23rd Judicial District Court. Corey Powell was a former
distributor of LEAN, a relaxation beverage marketed by DSD. Powell filed suit to recover allegedly unpaid commissions,
“invasion fees” and “finder’s fees.” The commissions related to payments allegedly owed for
Powell’s direct sale of LEAN product to wholesalers and retailers. The invasion fees relate to payments allegedly owed
to Powell when the LEAN product was sold by other wholesalers in his geographic territory. The finders’ fees relate to
payments allegedly owed to Powell for introducing investors to the DSD management. Discovery is ongoing. Written discovery
has been propounded and depositions have been taken to better understand the nature and basis for the plaintiff’s
claims and to build DSD’s defenses. DSD has vigorously contested each and every one of the plaintiff’s
allegations and has instructed counsel to proceed to trial on the merits. There have been negotiations between the counsels
for the parties regarding dropping approximately half of the original claims. However no trial date has been set.



On February 14, 2011, a claim was filed against DSD by Charles Moody,
in Caddo Parish, LA First Judicial Court seeking in excess of $100,000 in damages. Charles Moody loaned DSD approximately $63,000
in June 2009. In exchange, Moody received a Promissory Note containing the terms and conditions of the repayment of the loan. Based
upon the understanding of the parties, DSD began making monthly payments to Moody in January 2010 in satisfaction of the loan.
In December 2010, final payment of the remaining balance of the loan was paid to Moody in full and final satisfaction of the Promissory
Note. Moody filed suit to recover “late fees” allegedly owed under the Promissory Note. DSD contends the Promissory
Note was satisfied with the final payment in December 2010; Moody contends that repayment should have begun in November 2009, and
that because it did not, late fees are owed. This matter was settled for a payment of $8,000 by DSD on July 27, 2012 with no admission
of guilt or liability by either party.



F-9







On November 9, 2011, Charles Moody and DeWayne
McKoy filed a claim against DSD and Marco Moran, CEO, in Bossier Parish, LA 26th Judicial Court. Charles Moody and Dewayne McKoy,
allegedly both shareholders of DSD, brought an action against Dr. Moran alleging that he engaged in various acts of misconduct
and breaches of his fiduciary duties to the corporation which damaged them as minority shareholders. Moody and McKoy also seek
damages from Dr. Moran for dilution and/or loss of value of their shareholder interest in DSD as a result of his alleged misconduct.
DSD is a nominal defendant in this derivative action, as required by Louisiana law. Initial pleadings have been filed and exceptions
to the plaintiff’s claims have been asserted. Discovery has not yet commences. DSD vigorously denies that its officers or
directors engaged in any conduct which may have harmed minority shareholders.



During December 2011,
Innovative Beverage Group Holdings (“IBGH”) filed a claim against Dewmar International BMC, Inc., Unique Beverage
Group, and LLC. and Marco Moran, CEO of the Company, in Harris County, TX 61st Judicial District Court, whereas the plaintiff
asserted certain allegations. On February 24, 2012, the Company filed a motion for summary judgment to dismiss these
frivolous allegations due to lack of proper evidence. On April 12, 2012 Dewmar International BMC, Inc was given written
notice of its non-suit without prejudice from Innovative Beverage Group, Inc. This releases Dewmar International BMC, Inc.
from any and all liability. Dewmar’s counter suit remains alive and trial is set for October 8, 2012.



On March 22, 2012 whereas
Plaintiff, DSD NETWORK OF AMERICA, INC. (hereinafter “DSD”) is a Nevada corporation doing business in Clark
County, Nevada files suit against Defendants DeWayne McKoy, Charles Moody, Corey Powell and Peter Bianchi in United States
District Court; District of Nevada for a combined thirteen complaints accusing this group of defendants in colluding against
the Company. Answers have been received from McKoy, Moody and Powell and Powell has filed a counterclaim. DSD vigorously
denies all the claims in Powell’s counterclaim.



NOTE 8. COMMITMENTS
AND CONTINGENCIES



Employment Agreement



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



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



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



F-10







During the six months ended
June 30, 2012 and 2011, the Company accrued $60,000 and $60,000 in base salary to Dr. Moran, respectively, which were included
as a component of general and administrative expenses. The Company recorded total accrued payroll to Dr. Moran in the amounts of
$391,000 and $293,000 in accounts payable and accrued liabilities on its consolidated balance sheets at June 30, 2012 and December
31, 2011, respectively.



Leases Operating
Expenses



The Company leased office
spaces in Clinton, MS and Houston, TX under non-cancelable operating leases during 2011. Rent expense for the six months ended
June 30, 2012 and 2011 was approximately $11,137 and $9,560, respectively.



Future minimum lease payments
through December 31, 2012 total $11,015 under non-cancelable operating leases at June 30, 2012..



Distribution Agreement



On March 1, 2012, the Company entered into
a distribution and brokerage agreement with Brand Builderz, USA, LLC (BBUSA), a Limited Liability Company organized under the laws
of the State of Maine, to sell, market, manage and assist in distributing products in its designated territory. The Company will
pay a monthly retainer fee of two thousand dollars ($2,000) until sales commissions reach at least four thousand dollars ($4,000)
for two consecutive months. The company will pay commissions of ten percent (10%) of gross sales collected, pay an invasion fee
of fifty cents ($0.50) per physical case of product sold within the territory of BBUSA by a third party.



On April 9, 2012, The Company
entered into an agreement with NA Beverages, LLC, a Nevada Limited Liability Company (the Consultant), to provide advice, analysis,
sales and recommendations. The Consultant shall be paid at the base salary of $40,000 per year, receive a commission of five percent
(5%) of the gross sales of all fully paid invoices received from the Consultant’s customers and provide a monthly bonus of
up to twenty-five hundred dollars ($2,500) for arranging, conducting and reporting of meetings with buyers and or similar business
related personnel. Either the Company or the Consultant may terminate the agreement with at least thirty (30) says prior written
notice with no specific reasons given.



NOTE 9. SUBSEQUENT EVENTS



On June 27, 2012, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. (“Asher”)
a Delaware Corporation for an 8% convertible promissory note with an aggregate principal amount of $32,500 which together with
any unpaid accrued interest due on March 29, 2013. This convertible note together with any unpaid accrued interest is convertible
in shares of common stock at the holder’s option at a variable conversion price calculated as 55% of the market price which
means the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day
prior to the conversion date with no floor stated in the conversion feature. In July 2012, this convertible promissory
note was funded in the amount of $30,000. The Company will analyze whether the variable conversion price results in need for bifurcation
of the conversion feature into a separate derivative liability valued at fair market value on the date of funding.



On July 5, 2012, the Company
entered into a distribution agreement with Mikeska Distributing Co, a corporation organized under the laws of the State of
Texas to exclusively sell, market, manage and assist in distributing products in its designated territory in Texas. The
Company grants the distributor a first right of refusal of distribution of products in other territories. The Company will
provide an invasion fee of $2.00 to $4.00 per case if products are sold within said territory.



On July 16, 2012, the Company
entered into a distribution agreement with New Age Distributing, a corporation organized under the laws of the State of Arkansas
to sell and assist in distributing products in its designated territory of Arkansas. The Company grants the distributor a first
right of refusal of distribution of products in other territories. The Company will provide an invasion fee of $2.00 to $4.00
per case if products are sold within said territory.



On August 1, 2012, the Company
entered into an investor relations consulting agreement with Empire Relations Group, Inc.(“Empire”), a corporation
organized under the laws of the State of New York. Under the terms of the agreement, the Company will pay Empire a non-refundable
guaranteed consulting fee of $15,000 if Empire introduces the Company to at least $30,000 in capital either through equity investment,
loans, notes, debt settlements or any other type of financing which results in an increase in the net cash position of the Company.



F-11







Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations



Except for the historical
information contained in this report on Form 10-Q, the matters discussed herein are forward-looking statements. Words such as “anticipates,”
“believes,” “expects,” “future,” and “intends,” and similar expressions are used
to identify forward-looking statements. These and other statements regarding matters that are not historical are forward-looking
statements. These matters involve risks and uncertainties that could cause actual results to differ materially from those in the
forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without
limitation those discussed below as well as those discussed elsewhere in this report. Readers are cautioned not to place undue
reliance on these forward-lookingstatements, which reflect management’s analysis only as of the date hereof. We assume no
obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting
such forward-looking statements. This information should also be read in conjunction with our audited historical financial statements
which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011,



Background



On October 28, 2011, pursuant
to an Exchange Agreement (“Agreement”), Dewmar International BMC, Inc. (fka Convenientcast, Inc.) (“Dewmar International
BMC, Inc or the “Company”), a publicly reporting Nevada corporation, acquired DSD Network of America, Inc. (“DSD”),
a Nevada corporation, in exchange for the issuance of 40,000,000 shares of common stock of Dewmar International BMC, Inc. (the
“Exchange Shares”), a majority of the common stock, to the former owners of DSD. In conjunction with the Merger, DSD
became a wholly-owned subsidiary of the Company.



5







For financial accounting
purposes, this acquisition (referred to as the “Merger”) was a reverse acquisition of Dewmar International BMC, Inc.
by DSD and was treated as a recapitalization. Accordingly, the financial statements were be prepared to give retroactive effect
of the reverse acquisition completed on October 28, 2011, and represent the operations of DSD prior to the Merger.



As of the time of the Merger,
Dewmar International BMC, Inc held minimal assets and was a developmental stage company. Following the Merger, the Company, through
DSD, is a manufacturer of its Lean Slow Motion PotionTM brand relaxation beverage, which was launched by DSD in September
of 2009. After the Merger, the Company operates through one operating segment.



Results of Operations



For three months ended June 30, 2012 as compared
to the three months ended June 30, 2011.



Revenue



Revenue is presented net
of sales allowances. Net revenue decreased $368,249, or 78%, to $101,874 from $470,123 for the three months ended June 30, 2012
and 2010, respectively. This decrease was primarily due to an overall decrease in purchase orders.



Cost of Goods Sold



Cost of goods sold decreased
$149,979, or 76%, to $47,681 from $197,660 for the three months ended June 30, 2012 and 2011, respectively. This overall decrease
was primarily the result of decreased sales.



Operating Expenses



Operating
expenses increased $261,471, or 96%, to $532,815 from $271,344 for the three months ended June 30, 2012 and 2011,
respectively. The overall increase in operating expenses results from increase in share based compensation of $315,000 offset
by decreases in professional fees.



Marketing and advertising costs decreased $24,446,
or 78%, to $6,899 for the three month ended June 30, 2012, as compared to $31,345 for the three month ended June 30, 2011. This
overall decrease was due to reducing marketing and advertising commitments.



Contract labor costs decreased
$50,694 to $33,232 from $83,926 for the three months ended June 30, 2012 and 2011, respectively. Contract labor costs primarily
included costs for administrative and marketing/sales support.



Interest Expense



For the three months ended
June 30, 2012 and 2011, the Company incurred interest expense of $15 and $30,790 respectively.



Net Loss



Our net losses for the three months ended June
30, 2012 and 2011 were $478,636 and $29,626, respectively. The increase in net loss is attributable to the decrease in sales revenue
recognized.



Results of Operations



For
six months ended June 30, 2012 as compared to the six months ended June 30, 2011.



6







Revenue



Revenue is
presented net of sales allowances. Net revenue decreased $454,152 from $749,242 to $295,090 for the six months ended June 30,
2012 and 2010, respectively. This decrease was primarily due to an overall decrease in purchase orders.



Cost of Goods Sold



Cost of
goods sold decreased $244,605 from $367,979 to $123,374 for the six months ended June 30, 2012 and 2011, respectively. This
overall decrease was primarily the result of decreased sales. Gross margins rose from 50% for the six months ended June 30,
2011 to 58% for the six months ended June 30, 2012.



Operating Expenses



Operating
expenses increased $277,480 from $462,335 to $739,815 for the six months ended June 30, 2012 and 2011, respectively. The
overall increase in operating expenses results from decreases in marketing and advertising costs of $32,044 and decreases in
contract labor costs of $82,085, offset by increases in general and administrative costs of 396,859, primarily due to
increased share based compensation of $354,000.



Interest Expense



For the six months ended
June 30, 2012 and 2011, the Company incurred interest expense of $15 and $30,723 respectively.



Net Loss



Our net losses for the
six months ended June 30, 2012 and 2011 were $537,106 and $111,677, respectively. The increase in net loss is primarily attributable
to the decrease in sales revenue.



Off-Balance Sheet Arrangements



As of June 30, 2012, we
have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under
a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.



Critical Accounting
Policies



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



We regularly evaluate the
accounting policies and estimates that we use to prepare our financial statements. Our Annual Report
on Form 10-K/A for the year ended December 31, 2011 contains a discussion of these significant accounting policies. There have
been no significant changes in our significant accounting policies since December 31, 2011. See our Note 2 in our unaudited financial
statements for the six months ended June 30, 2012, as set forth herein.



7







Liquidity and Capital
Resources



During the
six months ended June 30, 2012 and 2011, the Company recognized positive (negative) cash flows from operating activities of
(58,213) and $47,315, respectively. As of June 30, 2012, the Company held cash and cash equivalents of $32,216 as compared to
cash on hand of $91,506 as of June 30, 2011.



Cash used in investing
activities totaled $0, for the six months ended June 30, 2012 and 2011, respectively. Cash used in financing activities totaled
$1,076, and $61,813 for the three months ended June 30, 2012 and 2011, respectively, and consisted of advances received from third
parties and payments made on notes payable.



On June 27, 2012, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. (“Asher”)
a Delaware Corporation for an 8% convertible promissory note with an aggregate principal amount of $32,500 which together with
any unpaid accrued interest due on March 29, 2013. This convertible note together with any unpaid accrued interest is convertible
in shares of common stock at the holder’s option at a variable conversion price calculated as 55% of the market price which
means the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day
prior to the conversion date with no floor stated in the conversion feature. In July 2012, this convertible promissory
note was funded in the amount of $30,000. The Company will analyze whether the variable conversion price results in need for bifurcation
of the conversion feature into a separate derivative liability valued at fair market value on the date of funding.



The Company is dependent
upon obtaining adequate financing to enable it to pursue its business plan and manage its operations for profitability. The Company
has limited financial resources available, which has had an adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain certain projects and pursue additional business. There
is no assurance that the Company will be able to raise sufficient funding to enhance the Company's financial resources sufficiently
to generate volume for the Company, or to engage in any significant research and development, or purchase plant or significant
equipment.



Management has been successful
in raising sufficient funds to cover the Company’s immediate expenses including general and administrative.



The Company as a whole
may continue to operate at a loss for an indeterminate period thereafter, depending upon the performance of its new businesses.
In the process of carrying out its business plan, the Company will continue to identify new financial partners and investors. However,
it may determine that it cannot raise sufficient capital to support its business on acceptable terms, or at all. Accordingly, there
can be no assurance that any additional funds will be available on terms acceptable to the Company or at all.



Item 3. Quantitative and Qualitative Disclosures
About Market Risk



Not Required



Item 4. Controls and Procedures



Evaluation of Disclosure Controls and Procedures



As of the end of the period
covered by this report, the Company carried out an evaluation of the effectiveness of the Company’s disclosure controls and
procedures (as defined by Rule 13-15(e) under the Securities Exchange Act of 1934) under the supervision and with the participation
of the Company’s Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the
aforementioned officers have concluded that the Company’s disclosure controls and procedures were not effective as of June
30, 2012.



Management’s Annual Report on Internal Control over Financial
Reporting



Our management is
responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statement
for external reporting purposes in accordance with U.S generally accepted accounting principles. It should be noted,
however, that because of inherent limitation, any system of internal controls, however well-designed and operated, can
provide only reasonable, but not absolute, assurance that financial reporting objectives will be met. In addition,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.



8







An internal control material weakness is
significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the financial statements would not be prevented or detected on a timely basis by employees in the
normal course of their work. Our Chief Executive Officer, also performing the functions of the principal financial officer,
conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2011, based
on the framework in Internal Control – Integrated Frameworkissued by the Committee of Sponsoring Organization
of the Treadway Commission (the COSO criteria). Based on that evaluation under the COSO criteria, our management concluded
that the Company did not maintain effective internal control over financial reporting as of December 3,1 2011. Based on our
internal control over financial reporting as designed, documented and tested, we identified multiple material weaknesses
related to maintaining an adequate control environment. The material weaknesses in our internal controls related to
inadequate staffing within our accounting department and upper management, lack of controls regarding the assignment of
authority and responsibility, lack of consistent policies and procedures, inadequate monitoring of controls and inadequate
disclosure controls.



For the period ending December 31, 2011 and June
30, 2012, the Company retained the services of a third party consulting firm to perform its bookkeeping and financial
reporting duties on an outsourced basis. When funds become available, the Company intends to hire additional accounting and
financial reporting personnel who will institute controls regarding the assignment of authority and responsibility,
consistent policies and procedures, monitoring of controls and adequate disclosure controls.



Changes in Internal Controls over Financial
Reporting



Changes in Internal Controls
Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended June
30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



PART II - OTHER INFORMATION



Item 1. Legal Proceedings



The Company
is aggressively defending itself in all of the below proceedings. The Company’s management believes the likelihood of
future liability to the Company for these contingencies is remote, and the Company has not recorded any liability for these
legal proceedings at June 30, 2012 and December 31 2011. While the results of these matters cannot be predicted with
certainty, the Company’s management believes that losses, if any, resulting from the ultimate resolution of these
proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash
flows.



During January 2011, a claim
was filed against DSD by Corey Powell, in Ascension Parish, LA 23rd Judicial District Court. Corey Powell was a former
distributor of LEAN, a relaxation beverage marketed by DSD. Powell filed suit to recover allegedly unpaid commissions,
“invasion fees” and “finder’s fees.” The commissions related to payments allegedly owed for
Powell’s direct sale of LEAN product to wholesalers and retailers. The invasion fees relate to payments allegedly owed
to Powell when the LEAN product was sold by other wholesalers in his geographic territory. The finders’ fees relate to
payments allegedly owed to Powell for introducing investors to the DSD management. Discovery is ongoing. Written discovery
has been propounded and depositions have been taken to better understand the nature and basis for the plaintiff’s
claims and to build DSD’s defenses. DSD has vigorously contested each and every one of the plaintiff’s
allegations and has instructed counsel to proceed to trial on the merits. There have been negotiations between the counsels
for the parties regarding dropping approximately half of the original claims. However no trial date has been set.



On February 14, 2011, a claim was filed against
DSD by Charles Moody, in Caddo Parish, LA First Judicial Court seeking in excess of $100,000 in damages. Charles Moody loaned DSD
approximately $63,000 in June 2009. In exchange, Moody received a Promissory Note containing the terms and conditions of the repayment
of the loan. Based upon the understanding of the parties, DSD began making monthly payments to Moody in January 2010 in satisfaction
of the loan. In December 2010, final payment of the remaining balance of the loan was paid to Moody in full and final satisfaction
of the Promissory Note. Moody filed suit to recover “late fees” allegedly owed under the Promissory Note. DSD contends
the Promissory Note was satisfied with the final payment in December 2010; Moody contends that repayment should have begun in November
2009, and that because it did not, late fees are owed. This matter was settled for a payment of $8,000 by DSD on July 27, 2012
with no admission of guilt or liability by either party



9







On November 9, 2011, Charles Moody and DeWayne
McKoy filed a claim against DSD and Marco Moran, CEO, in Bossier Parish, LA 26th Judicial Court. Charles Moody and Dewayne McKoy,
allegedly both shareholders of DSD, brought an action against Dr. Moran alleging that he engaged in various acts of misconduct
and breaches of his fiduciary duties to the corporation which damaged them as minority shareholders. Moody and McKoy also seek
damages from Dr. Moran for dilution and/or loss of value of their shareholder interest in DSD as a result of his alleged misconduct.
DSD is a nominal defendant in this derivative action, as required by Louisiana law. Initial pleadings have been filed and exceptions
to the plaintiff’s claims have been asserted. Discovery has not yet commences. DSD vigorously denies that its officers or
directors engaged in any conduct which may have harmed minority shareholders.



During December 2011,
Innovative Beverage Group Holdings (“IBGH”) filed a claim against Dewmar International BMC, Inc., Unique Beverage
Group, LLC. and Marco Moran, CEO of the Company, in Harris County, TX 61st Judicial District Court, whereas the plaintiff
asserted certain allegations. On February 24, 2012, the Company filed a motion for summary judgment to dismiss these
frivolous allegations due to lack of proper evidence. On April 12, 2012 Dewmar International BMC, Inc was given written
notice of its non-suit without prejudice from Innovative Beverage Group, Inc. This releases Dewmar International BMC, Inc.
from any and all liability. Dewmar’s countersuit remains alive and trial is set for October 8, 2012.



On March 22, 2012 whereas
Plaintiff, DSD NETWORK OF AMERICA, INC. (hereinafter “DSD”) is a Nevada corporation doing business in Clark
County, Nevada files suit against Defendants DeWayne McKoy, Charles Moody, Corey Powell and Peter Bianchi in United States
District Court; District of Nevada for a combined thirteen complaints accusing this group of defendants in colluding against
the Company. Answers have been received from McKoy, Moody and Powell and Powell has filed a counterclaim.D SD vigorously
denies all the claims in Powell’s counterclaim.



Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds



During the six months ended June 30, 2012, the
Company exchanged 300,000 shares of restricted common stock for consulting services. The value of the services was $39,000 resulting
in an Additional Paid in Capital amount of $38,700.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Not Used



None.



Item 5. Other Information



None.



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Item 6. Exhibits



The following exhibits are filed herewith:





|Exhibit
        
        Number |  | Exhibit
        
        Description                                                                                                                                                                     
|------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                                                                                                          
|31.1                            |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|                                |  |                                                                                                                                                                                                          
|31.2                            |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|                                |  |                                                                                                                                                                                                          
|32.1                            |  | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                



11







SIGNATURES



Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



|                      | Dewmar International BMC, Inc.
|--------------------- | ------------------------------
|                      |                               
|Date: August 20, 2012 | By:                           
|                      |                               



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