UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2009


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

For the transition period from to

Commission File Number 333-74396

DIAS HOLDING, INC.

(Exact name of small business issuer as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		58-2451191 (I.R.S. Employer Identification No.)

16630 Southfield Road,
Allen Park, MI 48101
(Address, including zip code, of principal executive offices)

313-928-1254
(Issuer’s telephone number)

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 requirements for the past 90 days.

þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 the 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 þ

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

o Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 15, 2009, the issuer had one class of common stock, with a par value of $0.001, of which 102,000,000 shares were issued and outstanding.

Table of Contents

DIAS HOLDING, INC.

INDEX


		Page

PART I. FINANCIAL INFORMATION			4

Item 1.	Condensed Financial Statements		4

	Consolidated Balance Sheets as of March 31, 2009 (Unaudited) and December 31,2008		4

	Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and March 31, 2008(Unaudited)		6

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and March 31, 2008(Unaudited)		7

	Notes to Unaudited Condensed Consolidated Financial Statements		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		30

Item 4.	Controls and Procedures		30

PART II.	OTHER INFORMATION		32


		Page

Item 1.	Legal Proceedings		32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		36

Item 3.	Defaults Upon Senior Securities		36

Item 4.	Submission of Matters to a Vote of Security Holders		36

Item 5.	Other Information		37

Item 6.	Exhibits		37

SIGNATURES			38
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part I. Financial Information

Item 1. Financial Statements

DIAS HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


	March 31, 2009		December 31,
	(Unaudited)		2008

Assets

Current assets:
Cash and Cash equivalents	$	860,779	$	809,937
Accounts receivable, net of factoring and allowance for doubtful accounts of $604 and $27,204, respectively		1,784,654		2,009,248
Notes receivables, net of allowance for doubtful accounts of $1,394		59,755		75,783
Inventory		2,333,516		2,613,691
Prepaid expenses and other current assets		785,176		852,425

Total current assets		5,823,880		6,361,084

Fixed assets:
Land		1,258,538		1,306,354
Property and equipment, net		2,383,574		2,216,919

Total fixed assets, net		3,642,112		3,523,273

Other assets		405,716		345,780

Total assets	$	9,871,708	$	10,230,137


	March 31, 2009			December 31,
	(Unaudited)			2008

Liabilities and stockholders’ equity

Current liabilities:
Short-term loans and current portion of long-term debt	$	3,488,820		$	3,824,251
Accounts payables		2,355,092			2,550,448
Accrued expenses		590,447			461,987
Advances on collection		281,285			157,271
Advances from stockholders		163,460			173,983
Other current liabilities		207,177			157,778

Total current liabilities		7,086,281			7,325,718
Long-term debt and other liabilities		1,288,581			1,363,107

Total liabilities		8,374,862			8,688,825

Commitments and contingencies (Note 11)

Stockholders’ equity:
Common Stock of 0.001 par value per share — authorized, 500,000,000; Outstanding, 102,000,000 at March 31, 2009 and December 31, 2008.		102,000			102,000
Additional paid-in capital		2,409,015			2,409,015
Other comprehensive income		50,229			446,695
Accumulated deficit		(1,064,398	)		(1,416,398	)

Total stockholders’ equity		1,496,846			1,541,312

Total liabilities and stockholders’ equity	$	9,871,708		$	10,230,137

See accompanying notes to unaudited condensed consolidated financial statements.

DIAS HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


	March 31,
	2009			2008

Net sales	$	1,763,506		$	3,418,102
Cost of goods sold		1,283,078			2,348,060

Gross profit		480,428			1,070,042
Operating expenses
General and administrative		484,574			373,978
Selling		148,935			302,910
Research and development		383			656
Depreciation and amortization		47,645			36,657
Advertising		21,151			2,027

Total operating expenses	$	702,688			716,228

Income (loss) from operations		(222,260	)		353,814
Other income (expenses)
Interest expense		(117,654	)		(100,378	)
Gain on foreign currency transactions, net		36,827			(106,662	)
Other		14,862			1,530

Income (Loss) before income tax		(288,225	)		148,304
Income tax expense		0			(126,195	)

Net Income (loss)		($288,225	)	$	22,109

Income (Loss) per share:
Basic and diluted Income (loss) per share		($0.003	)	$	0.000

Weighted average shares outstanding:
Basic and diluted		102,000,000			89,000,000

See accompanying notes to unaudited condensed consolidated financial statements.

DIAS HOLDING, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)


	March, 31
	2009			2008

Operating activities
Net Income (loss)	$	(288,225	)	$	22,109
Depreciation and amortization		47,645			36,657
Impairment Loss		593			—
Effect of exchange rate changes on cash		—			(130,316	)
Accounts receivable and notes receivable		240,622			(432,008	)
Inventory		280,175			(324,228	)
Prepaid expenses and other assets		67,250			(299,323	)
Accounts payable		(195,356	)		96,844
Accrued expenses		83,658			26,718
Income tax payable		44,802
Advances on collection		124,014			114,856
Other current liabilities		49,800			28,239

Net cash (used in) provided by operating activities		454,978			(860,452	)
Additions to property and equipment		(188,443	)		(111,186	)
Proceeds from sale of property and equipment		47,815			—
Additions to property		156,971			—

Net cash provided by (used in) investing activities		16,343			(111,186	)
Borrowings (Repayment) on short-term debt		(313,126	)		752,054
Borrowings (Repayment) of long-term debt		(96,830	)		12,435
Increase (decrease) in advances from stockholders		(10,523	)		2,611
Increase (decrease) in guarantee deposits		—			11,847

Net cash provided by (used in) financing activities		(420,479	)		778,947


	March, 31
	2009		2008

Net increase (decrease) in cash and cash equivalents		50,842		(192,691	)
Beginning cash and cash equivalents		809,937		727,415

Ending cash and cash equivalents	$	860,779	$	534,724

Supplemental disclosure of cash flow information:
Cash paid for interest	$	118,867	$	100,378

Cash paid for income taxes		—	$	126,195

DIAS HOLDING, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)

Note 1 — Nature of Business and Basis of Presentation

Nature of Business

DIAS Holding Inc. (“the Corporation”) formerly Componus, Inc. was incorporated in Canada on January 21, 2005 under the Canada Business Corporations Act under the name Tritac Finvest Corporation.

On December 20, 2005 Componus, Inc. affected a name change from Tritac Finvest Corporation and a change in its jurisdiction of incorporation to the State of Nevada, USA. Componus, Inc. then merged with Asia Forging Supply Co., Ltd to form Componus, Inc. on Sept., 20, 2006. Componus changed its name to DIAS Holding Inc. following the reverse merger describe below.

Asia Forging Supply Co., Ltd. (“AFS”), was incorporated in December 1997, in the Republic of China (ROC), engages mainly international business in forging parts for automobiles. All manufacturing and administration offices are located in Shindian City, Taipei, Taiwan. There are 3 inventory warehouse locations in the Midwest United States.

DIAS Holding Inc. has an administrative office in Allen Park, Michigan and headquarters in Taipei, Taiwan.

On Sept., 20, 2008, JPC Capital Partners, Inc. (“JPC”), a company incorporated in Delaware, US, executed a Stock Purchase Agreement and Share Exchange (the “Agreement”) with the Corporation. The Agreement provides for the acquisition of the Corporation whereby the Corporation shall become a wholly owned subsidiary of JPC. In connection with acquisition of the Corporation, JPC shall issue 89,000,000 total shares of common stock, which will represent and equate to 87.25% of the total issued and outstanding common stock of JPC after the transaction is closed (“reverse merger”). These shares will be issued in exchange for all of the issued and outstanding shares of the Corporation. The Corporation also shall pay to JPC up to $13,000 for reimbursement of its legal fees incurred as a result of the transactions contemplated by the Agreement. The agreement was executed in 2008.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles.

Note 2 — Summary of Significant Accounting Policies

Basis of Consolidation — The consolidated financial statements included the account of DIAS Holding Inc. and all entities in which DIAS Holding Inc. has a controlling voting interest (“subsidiary”). All significant inter company accounts and transactions between consolidated companies have been eliminated in consolidation.

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

Cash and Cash Equivalents — Cash and cash equivalents include cash on hand, cash on deposits and all short-term highly liquid investments purchased with remaining maturities of three months or less.

Fair Value of Financial Instruments — The carrying amount of cash, accounts receivable and accounts payable approximates fair value due to the short-term nature of these instruments.

Inventory — Inventory is stated at the lower of average cost (first-in, first-out method) or market, and at March, 31, 2009 and December 31, 2008, had a value of $2,333,516 and $2,613,691, respectively.


			December 31,
	March, 31, 2009		2008

Raw material	$	184,813	$	90,184
Finished goods in Taiwan	$	694,320	$	605,965
Stock in the Midwest United States	$	1,454,383	$	1,917,542

	$	2,333,516	$	2,613,691

Property and Equipment — Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets (generally 40 years for buildings and 5 years for machinery, transportation equipment, computer and office equipments).

Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization is eliminated from the respective amounts and any resulting gains or losses are reflected in operations. Expenditures for repairs and maintenance costs are expensed as incurred.

Revenue Recognition — Revenues are recognized in connection with sales of products when all of the conditions are met: (1) there exists evidence of an arrangement with the customer, typically consisting of a purchase order or contract; (2) products have been delivered and title and risk of loss has passed to the customer, which occurs when a product is shipped under customary terms, generally FOB shipping point; (3) the amount of revenue is fixed or determinable; and (4) it is probable that the amount sold will be collected.

Total allowances for doubtful accounts for the accounts receivable and notes receivable were provided to reserve for credit losses as a result of customers’ inability to pay. The amount reserved for accounts receivable and notes receivable is based upon the historical trend data. These valuation reserves are periodically re-evaluated and adjusted as more information about the ultimate collectability of accounts receivable and notes receivable become available.

Advertising Costs — Advertising costs are expensed as incurred. Advertising costs were $21,151 and $2,027 for the three month ended March 31, 2009 and 2008, respectively.

Income Taxes — The Company accounts for income taxes under SFAS 109, “Accounting for Income Taxes.” Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 be recovered or settled.

Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 was issued to clarify the requirements of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, relating to the recognition of income tax benefits. As of March 31, 2009, the Company had no unrecognized tax benefits due to uncertain tax positions.

Off-Balance-Sheet Risk and Concentration of Credit Risk — Financial instruments that potentially expose concentrations of credit risk primarily consist of cash and cash equivalents, investments and accounts receivable. Management believes there are no significant off-balance-sheet risks such as those associated with foreign exchange contracts, option contracts or other foreign exchange hedging arrangements. With respect to concentration of credit risk, the Company has cash investment policies which, among other things, limit investments to investment-grade securities. Ongoing credit evaluations of the customers are performed and allowances for potential credit losses maintained.

Geographic Information — Product revenues primarily from customers based in the following geographic areas for the years ended March 31, 2009 and 2008 were as follows:


	March 31, 2009		March 31 2008

North America and Mexico	$	1,717,985	$	3,024,481
Asia		24,692		318,841
Europe		20,829		74,780

Foreign Currency Translation — AFS which is located and operates in Shindian City, Taipei, Taiwan, keeps its books and records in New Taiwan Dollars (“NT$”). The functional currency of AFS is the NT$, the currency of the primary economic environment in which the subsidiary operates. Accordingly, AFS’s financial information is translated from NT$ into US Dollars (“USD”) in accordance with Financial Accounting Standard No. 52 (“FAS 52”). Gains and losses related to the translation from the foreign currency (NT$) to the reporting currency (USD) are reported in other comprehensive income (loss) within the consolidated statements of stockholders’ equity.

Foreign Operations — The consolidated financial statements include the operations of AFS which have been translated into USD in accordance with FAS 52. Included in the consolidated statements of operations were net sales of $1,763,405 and net loss of $288,225 for the March 31, 2009, respectively. The consolidated balance sheet included total assets of $9,871,709 as of March 31, 2009.

Intangible Assets — Intangible assets with finite lives are amortized over their respective estimated useful lives. The amount of intangible assets to be amortized shall be the amount initially assigned to that asset less any residual value. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived described below.

Impairment of Long-Lived Assets Other than Goodwill — Long-lived assets held and used, including intangible assets with finite lives are tested for recoverability when circumstances indicate that the carrying amount of assets may not be recoverable. Recoverability of long-lived assets is evaluated by comparing the carrying amount of an asset or asset group to management’s best estimate of the undiscounted future operating cash flows expected to be generated by the asset or asset group. If these comparisons indicate that the asset or asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying value of the asset or asset group exceeds fair value. Fair value is determined by quoted market price, if available, or an estimate of projected future operating cash flows, discounted using a rate that reflects the related average operating cost of fund.

Recent Accounting Pronouncements — The following are new accounting standards and interpretations that may be applicable in the future to the Company:

Basis of presentation

The accompanying Unaudited Consolidated Financial Statements (“Financial Statements”) have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2008, included in our Annual Report on Form 10-K filed with the SEC on March 31, 2009. Additionally, our operating results for the three months ended March 31, 2009 are not necessarily indicative of the results that can be expected for the year ending December 31, 2009 or for any other period.

Reverse Merger and Proforma Information

On September, 20, 2008, JPC Capital Partners, Inc. (“JPC”), a company incorporated in Delaware, US, executed a Stock Purchase Agreement and Share Exchange (the “Agreement”) with the Corporation. In accordance with the Agreement JPC purchased from

Componus, Inc. (now known as DIAS Holding Inc. or DIAS) all issued and outstanding shares of Componus’s common stock in consideration for the issuance of 89,000,000 shares of JPC common stock. The Share Exchange resulted in a change in control of JPC with Componus owning approximately 87.25% of the JPC’s common stock after giving effect to a 2 for 1 reverse split of JPC’s, common stock. As a result, Componus became a wholly-owned subsidiary of JPC and JPC abandoned its current line of business and adopted the business of Componus as its sole business. This transaction was accounted for as a reverse acquisition. In accordance with the Accounting and Financial Reporting Interpretations and Guidance prepared by the staff of the U.S. Securities and Exchange Commission. Componus Inc. and Asia Forging Supply Co., LTD are considered the accounting acquirer and JPC Capital Partners, Inc. is considered the acquired for accounting purposes. Subsequent to the Share Exchange Transaction the financial statements of the combined entity is in substance those of Componus. The assets, liabilities and historical operations prior to the share exchange transaction are those of Componus. Subsequent to the date of the Share Exchange Transaction, Componus is deemed to be a continuation of the business of JPC Capital Partners. Therefore, the post-exchange financial statements includes the combined balance sheet of JPC Capital Partners, Inc. and Componus, the historical operations of Componus and the operations of JPC Capital Partners and Componus from the closing date of the Share Exchange Transaction forward. The outstanding stock of JPC Capital Partners Inc. prior to the Share Exchange Transaction has been accounted for at their net book value and no goodwill has been recognized.

The proforma financial statements to show the impact as if the reverse merger occurred on January 1, 2008 have been omitted as the impact is immaterial.

Economic Dependency and Concentration of Credit and Other Risk

The Company’s sales are to customers in the automotive industry. Continued adverse developments in the North American automotive industries could impact the Company’s liquidity position and/or require restructuring of the Company’s operations or impairment charges. In addition, a prolonged downturn in the automotive market may also impact certain vendor’s financial solvency, resulting in potential liabilities or additional costs to the Company to ensure uninterrupted supply to its customers.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivables and long-term debt. Exposures to foreign currency risk, business concentration risk and cash flow risk arise in the normal course of business.

Recent Accounting Pronouncements (Continued)

In May, 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 162, “The Hierarchy of Generally Accepted Accounting Principles,” (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). SFAS No. 162 will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The FASB has stated that it does not expect SFAS No. 162 will result in a change in current practice. The application of SFAS No. 162 will have no effect on the Company’s financial position, results of operations or cash flows.

Also in May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60” (“SFAS 163”). SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended March 31, 2009. The Company is currently evaluating the impact of SFAS 163 on its financial statements but does not expect it to have an effect on the Company’s financial position, results of operations or cash flows.

In May 2008, FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1 applies to convertible debt securities that, upon conversion, may be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years after December 15, 2008, and must be applied on a retrospective basis. Early adoption is not permitted. We are assessing the potential impact of this FSP on our convertible debt issuances.

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. We are assessing the potential impact of this FSP on our earnings per share calculation.

In June 2008, FASB ratified EITF No. 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-5”). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. We are assessing the potential impact of this EITF on our financial condition and results of operations.

Note 3 — Prepaid Expense and Other Current Assets

Prepaid expenses and other current assets were comprised of the following: -


	March 31,		December 31,
	2009		2008

Prepaid inventory purchases	$	285,131	$	286,938
Purchases in advance		220,510		271,227
Prepaid commission		43,,560		228,888
Prepaid income taxes		235,975		—
VAT on purchases		—		65,372

Total	$	785,176	$	852,425

Note 4 — Property and Equipment

Property and equipment and the related accumulated depreciation consisted of the following: -


	March 31, 2009		December 31, 2008
	US$		US$
Property and equipment:
Buildings	$	1,285,383	$	1,334,218
Transportation equipment		177,858		184,615
Office equipment		370,644		387,982
Mold and miscellaneous equipment		1,567,118		1,603,343

Total cost		3,401,003		3,510,158

Total accumulated depreciation	$	1,017,429	$	1,293,239

Property and equipment — net	$	2,383,574	$	2,216,919

Depreciation expense was $45,232 and $116,394 for the March, 31, 2009 and December 31, 2008, respectively.

Note 5 — Other assets


Guarantee deposit paid	$	179,488		$	186,308
Other		178,475			107,406
Intangible assets
At cost		336,598			349,386
Accumulated amortization		(288,845	)		(297,320	)

	$	405,716		$	345,780

The intangible assets are amortized over five years. Amortization expense of $2,413 and $135,894 was recorded for the periods March 31, 2009 and December, 31, 2008, respectively.

Note 6 — Long-term debt


									December 31,
	Interest			Matures in		March 31, 2008			2007
Description	Rate			FY		US$			US$

Short-term debt and current portion of long-term debt:
Unsecured foreign bank loan	3.17% to 7%				2008	$	2,901,729		$	1,423,943
Secured foreign bank loan	3.17% to 7%				2008					1,780,909
Current portion of long-term debt					2008		587,091			619,399

Total short-term debt and current portion of long-term debt							3,488,820			3,824,251
Long-term debt
Secured foreign bank loan		3.01	%		2020		1,875,671			1,982,506
Unsecured foreign bank loan	3.35% to 6%				2008-2009		—			—
Current portion of long-term debt							(587,090	)		(619,399	)

Long term debt							1,288,581			1,363,107

Total debt						$	4,777,402		$	5,187,358

Aggregate maturities of long-term debt are as follows:


Fiscal year ending December 31
2009	$	3,488,820
2010		145,786
2011		108,933
2012		112,291
2013 and thereafter		921,572

Total	$	4,777,402

Note 7 — Accrued expenses


	March 31, 2009
	US$
Salaries and wages	$	87,116
Commission		220,510
Interest		11,233
Tax		129,567
Accrued payables and other		142,021

	$	590,447

Note 8 — Net Income (loss) per share

Basic net earnings (loss) per share excluding dilution is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted income (loss) per share is computed the same as basic except that the denominator also includes shares issuable.

As March, 31, 2009 and 2008 basic and diluted income (loss) per share was the same as there were no outstanding instruments having a dilutive effect.

Note 9 — Income taxes

The Company is subject to US federal and state income tax. The subsidiary is subject to tax and file income tax returns in Taiwan. The statutory tax rate in effect for the year ended March 31, 2009 is 0%.

Note 10 — Related Party Transactions

As of March 31, 2009 and the end of 2008, note payable to a stockholder totalled $163,460 and $173,983, respectively.

The Corporation provided no collateral to the related party for the above loan which is non-interest bearing.

Note 11 — Commitments and Contingencies

Rent expense for the March 31, 2009 and 2008 was $51,853 and $268,029, respectively. The Company has signed a 3-year rental agreement with a renewal option for its warehouse locations in the U.S.A. The future payments for lease in effect at December, 31, 2008 were as follows: -


Fiscal year ending December 31
2009		136,003
2010		181,337
2011 and thereafter		—

Total	$	317,340

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

This Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009, includes certain “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, among others, those statements preceded by, following or including the words “believe,” “expect,” “intend,” “anticipate” or similar expressions. These forward-looking statements are based largely on the current expectations of management and are subject to a number of assumptions, risks and uncertainties. Our actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include those discussed in “Risk Factors”. In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Form 10-Q will in fact occur.

General Overview

DIAS Holding, Inc. (hereinafter “Company”) is headquartered in Allen Park, Michigan. The Company began in 1997 as Asia Forging Supply Company (hereinafter “AFS”), a Taiwan corporation, and completed re-domicile as a U.S. company in December 2005 as Componus, Inc. (hereinafter “Componus”), a global source for developing and distributing forgings and automotive metal products from Asia to the automotive, heavy equipment, and furniture makers. Company intends to create branding awareness for assembled and completed components across a variety of industry needs.

In 2007, the Company established a unique automotive components marketplace in the Detroit metropolitan area called the Detroit International Auto Salon (hereinafter “DIAS”), featuring year-round exhibition & displays of qualified and emerging component sources from Asia. In this regard, DIAS cooperates with the Wayne County Airport Authority; the Charter County of Wayne, Michigan; Wayne County Economic Development Corporation; and other industry alliances, such as Global Auto Industry ( a private e-sourcing corporation). As of September 2008, DIAS exhibits products, services and catalogs from over 100 manufacturers and sources, primarily from Asia.

In March 2008, JPC Capital Partners, Inc., (OTC BB: JPCI.OB) a licensed broker-dealer based in Atlanta, Georgia, announced a stock purchase agreement and share exchange with Componus. The Agreement provided for the acquisition of Componus whereby Componus became a wholly owned subsidiary of the Company. In connection with acquisition of Componus, the Company issued 89,000,000 total shares of common stock, representing and equating to approximately 87.25% of the total issued and outstanding common stock of the Company. The shares were issued in exchange for all of the issued and outstanding shares of Componus. The Exchange Agreement also stipulated at Closing, each of the current officers and directors of the JPC Capital Partners were to resign. These actions resulted in a change of control of the Company. The transactions contemplated by the Exchange Agreement were consummated on September 8, 2008. Also consummated was changing the name of the corporation from JPC Capital Partners to DIAS Holding, Inc. with a revised OTC Bulletin Board symbol listing as DSHL.OB. Currently, the Company is organized into two distinct operations. One is a production sourcing business (AFS), the other a year-round exhibition business (DIAS).

First, Asia Forging Supply Company (hereinafter “AFS”), a subsidiary, typically receives production orders for safety-related component products from automotive, transportation & furniture industry customers who require expertise to source, manage, fabricate and maintain higher quality to produce. AFS is a one-stop supplier for auto metal parts, and is represented globally with sales & service locations in over 14 countries on 4 continents. AFS works with all types of customers, from Tier 1 and Tier 2 of original equipment manufacturers (“OEMs”) to aftermarket customers and spare parts shops. Customers award business to AFS based upon meeting their target price, and receiving best value in payment terms, manufacturing management, quality assurance and control inspection, audit of suppliers, ease of communicating across multi-culture and multi-language boundaries, timely delivery, and issue resolution with factories.

Profit margins are generated from the difference between customer accepted price and contracted manufacturer’s cost on a per part basis. Operating expenses are subtracted from gross profit, resulting in gross earnings. Normally, AFS enjoys routine repeat

orders for the same part(s) on a regular basis because the part is in demand for several years. Further revenues are derived from the natural increase of quantity demand as the end product becomes popular, existing customers increasing their order for new development parts, and new customers ordering parts similar to parts in production. Subsequently, a prior year’s development parts enter into mass production for several years. AFS is a TS16949 and ISO9001 certified company with its management team having over 25 years of experience in the forging industry. Its major product lines are chassis parts, transmission parts, power train, suspension, and brake systems. Because of AFS’s arbitrage business model, it has established a detailed knowledge base of its contract manufacturing factories. Over 50% are ISO+QS+TS qualified. Several of these factories have developed special manufacturing/ process technologies.

Second, the Detroit International Auto Salon (DIAS) is a subsidiary serving the automotive industry as a marketplace in North America (Allen Park, Michigan) where customers and Asian suppliers may meet in one location for all their automotive supply needs, specific to the industry. The DIAS business model is very similar to auto salons and auto malls located in China, and Japan, where everything automotive, e.g., new cars, used cars, components, parts, accessories, supplies are continuously exhibited in a large structure or multiple structures. Co-located with these exhibit centers or structures are supporting services and businesses, such as conference centers, hotels, restaurants, entertainment centers, and commercial and retail shops. The resulting complex is a single location that automotive enthusiasts enjoy and return. Other examples of auto malls or auto salon can be found in Japan (the Tressa Yokohama Auto Mall , and the Nissan Carest Zama) and in China (Tianjin Airport International Auto Park).

The currently leased showcase facility in Allen Park is centrally located near the “Big 3” American automotive OEMs ( Chrysler, Ford, General Motors). Allen Park and adjoining city, Detroit, are both within Wayne County, Michigan. The DIAS facility has the capacity to expand in excess of 300,000 square feet as more exhibitors subscribe to lease showroom space. DIAS receives revenues from 1) annual subscriptions for year-round exhibit booth displays by a subscriber, 2) catalog libraries of a subscriber, 3) sales support of subscriber’s products on a commission basis.

Several local, regional, and international organizations have teamed, partnered, or entered into co-operative agreements with DIAS or DIAS Holding for mutual promotion and benefit, including, but not limited to 1) Wayne County Economic Development, 2) Wayne County Airport Authority, 3) GlobalAutoIndustry.com, 4) Gasgoo.com, 5) Hubei Provincial Mechanical and Automotive Promotions Center (China). The DIAS management team has made several visits to automotive industry centers in China, Korea and India, building relations with Chinese, Korean, and Indian automotive OEMs and their suppliers. For instance, in China, the top twenty Chinese OEMs and joint ventures enjoy the majority of sales with over 8 million produced and sold in China in 2007, surpassing Japan. In 2007, Asia-Pacific region represents the second-largest market region, surpassing the USA and Canada, but slightly lagging Europe. According to Chinese auto industry sources, the automotive parts and accessories output is approximately 50% as large as the automotive production sector. Through its relationships, the Company is working with the growing number of companies who are approved for export, and need exposure to the North American market via DIAS for production opportunities, from build-to-print to original design and manufacturing.

INDUSTRY BACKGROUND

DIAS Holding Inc., through its subsidiary, participates in the rapidly growing worldwide outsourcing of metal-formed parts for automotive, heavy equipment, and other market uses.

In the United States and Europe, the cost of steel material and labor are significantly higher than in Asia. For a simple forged or cost component, the cost of the raw material accounts for 40% or more of the total formed cost. Current domestic suppliers of metal formed components are no longer able to meet their customer’s demand to reduce component prices, and provide annual contracted discounts. As labor costs and raw material cost have risen, domestic suppliers must either accept business-killing lower profit margins, or outsource lesser value-added production content to a suitable offshore manufacturer. The greater China region (China, Taiwan, and Korea) represents the largest center of high quality, lower cost manufacturing and production capacity in metal-formed products.

In management’s opinion only the more financially stable, larger companies have shown any success in sourcing production directly from greater China. Industry studies show that companies attempting direct management in outsourcing often fail because of underestimating operational costs and risks, underestimating start-up costs, overestimating indigenous capabilities of the supplier, and quickly disappointing the customer by not fulfilling projected production levels. These failures are derived from:

	•		The customers’ inability to realistically advance plan managing the outsourcing event;

	•		Lack of adequately finding and assessing suitable sources;

	•		Miscommunication and misunderstanding, between different cultures and languages especially in the area of design nuances, acceptable levels of manufacturing tolerances, and technical details; and

	•		Lack of committing proper and dedicated levels of engineering, manufacturing, and procurement teams to work with their greater China counter-parts.

PRODUCTS AND SERVICES

The Company manages development and production of metal-formed products and components under contracts with its customers for:

	•		Auto body: Stamping and tooling

	•		Chassis: Steering, suspension, wheels, CV Axles, Control arm assemblies, Pitman Arm assemblies, Cast and forged Aluminum wheels, Magnesium components, springs, shocks, bars, support beams, valves, joints, racks, knuckles, tie rods, and wishbones

	•		Commodities: castings, forgings, extrusions, molds, stamping, and tooling

	•		Electrical: Actuators, displays, fobs, star cores, switches, and wiring

	•		Materials: Steel, aluminum, magnesium, coatings and finishings

	•		Multi-Purpose: Fasteners, screws, bolts nuts, brackets, bushings, connectors, washers, wires, refined petroleum products, and pneumatic devices

	•		Powertrain: Axle shafts, differentials, joints, transmission components

	•		RD&T: Metals Industry R&D Centre, Automotive Research & Test Center

The Company, through its DIAS subsidiary, provides year-round exhibition and showroom services to emerging and suitable Asian suppliers desiring export business into North America. Because the Detroit metropolitan area and Wayne County, Michigan are known to be the center of the North American automotive industry, the Company believes DIAS provides an attractive and cost-efficient alternative for customers needing to increase their production sources internationally, and outsource to suitable factories. DIAS derives a significant portion of its revenues from annual subscriptions paid by exhibiting suppliers.

PRODUCT DEVELOPMENT

COMPETITION

Competitive Analysis:

In today’s competitive automotive components market, incumbents are forced to outsource upstream manufacturing operations, like forging and casting, in order to preserve higher value machining, finishing, and assembly operations.

Automotive Tier 1 companies, like Delphi, Dana, TRW, and Federal Mogul are implementing strategies to source or establish operations in lower cost regions internationally. The Company has cooperated with a number of Chinese suppliers, who represent the most likely long-term, lower cost manufacturing providers; having plentiful manpower, production scale, and access to raw materials, for this type of basic manufacturing.

The Company views the competitive landscape in three ways:

Competition Segment 1. — Highly automated, vertically integrated suppliers

Incumbents in this segment are large suppliers to the OEMs and top tier assembly companies following rigid development and product test cycles. Volume production is in the hundreds of thousands, requiring commitment to projected shipping releases and delivery schedules. Forming, machining, and finishing operations are normally closely physically located to adhere to “just-in-time” production methodology. This competitive segment represents a target of opportunity for the Company where the customers have interim strategies to find lower cost component sources in order to keep their domestic operations profitable and viable while planning new operations in Asia. It is likely that the North American OEMs and top tier customers will close marginal domestic operations, in favor of new plants and operations in the growth markets. Examples of participants in this sector are International Truck (Navistar), and American Axle manufacturing.

Competition Segment 2. — Specialized sub-assembly suppliers

These incumbents normally lag the OEMs and top tier customers, but management expects that they will eventually follow their customer’s strategy to locate operations in Asia, however, their resources with Asian experience and know-how is limited. Many are likely to conclude that their best course of action is to partner, joint venture, or team with existing manufacturers, trading companies, and knowledgeable consultant to successfully gain a foothold. This segment represents potential long-term partner, joint venture, or a M&A opportunity for the Company. Examples of participants in this sector are Dana, Affinia, and Eston/Linamar.

Competition Segment 3. — Specialty finished goods suppliers

These incumbents tend to curtail sourcing domestically, in favor of lower cost factories in China. Price is the overriding criteria, as their survival depends on establishing alternative sources before the China factories become large enough to conduct international export marketing and sales operations. Examples of participants in this sector are custom wheel suppliers and wholesalers. This segment represents significant near-term expansion potential for the Company whose factory network is already poised to conduct export business with a focus towards better product technology and operational quality control.

The Company has differentiated itself by cohesively managing product development qualification, financing, and delivery by Asia-based forging factories at OEM level production capacities.

The Company has experienced supply chain efficiencies, from raw materials to delivery, by:

	•		Providing raw materials directly to the factory,

	•		Engaging major customers with a direct sales force,

	•		Qualifying factory sources in China, Taiwan, Korea,

	•		Negotiated 60 days charge-free warehousing for inventory prepared and managed for major customers, and

	•		Providing bi-lingual program management, technical services and support.

The Company’s network of factories is dedicated to providing low to high volume forged and cast metal products. Available production capacity is a key factor in a customer’s determination to re-source. Below is an overview of approximate annual capacity of the Company network:

AFS Factory Network


			Capacity
Type of Factory	Number		(metric tons)
Integrated Suppliers		4		N/A
Castings		6		200,000
Forgings		36		500,000
Upsetters		4		110,000
Stamping		1		200,000
Machining		5		500,000
Assemblies		5		N/A
Wheels		4		200,000

The production capacity flexibility of this network enables the AFS to win new development contracts at the beginning of a product life-cycle, and mass production contracts for mid-range to end-of-life product life cycles.

Management believes there are fundamental sourcing characteristics and metrics for sourcing. First, unlike other industries the Company has not found any competitors, who provide consolidated services in the same market segment. From a product point of view however, there will always exist individual Asian factories that make the same or similar parts.

Characteristically, these factories possess a small number of product manufacturing skills and typically do not have the capability to become qualified and expand rapidly in new areas.

Second, successful outsourcing by customers demand more of a total solution approach that is integrated with manufacturing engineering expertise, project management and production control, quality assurance & control, shipping, warehousing and delivery services, and financing options. The Company has successfully proven this integration, known as “Mechanical Manufacturing Service”, and it is a cornerstone in the Company’s overall role for this type of supply chain — as an entity of sourcing and program management for the demand side, and a marketing entity for the supply side.

Third, the amount of on-line or Web-based component suppliers, or aggregated (vertical) product portals overwhelms most customers’ abilities to separate the “wheat from the chaff”. Industry standards, safety regulations, liability concerns, and internal sourcing procedures still dictate qualifying new sources of supply through demonstrated product sampling & testing, factory auditing, and account management discipline. Consequently, by operating as a prime contracting platform that provides the necessary on-the-ground multi-lingual and multi-cultural integration, the Company fills the voids and adds value in supply chain management, quality assurance, and logistic management.

The growth in the Company’s sales in the past 8 years is evidence of the Company’s ability to successfully assist its customers in reducing outsourcing cost and the risks of purchasing management.

INTELLECTUAL PROPERTY

The Company protects its trade secrets, confidential information and know-how by a number of methods, including confidentiality agreements between the Company and its customers and suppliers. For example the Company has executed the following agreements:

	•		Confidentiality Agreement with DANA Corporation

	•		Confidentiality Agreement with Edscha AG

	•		Information Exchange and Confidentiality Agreement with COM Engineering GmbH

	•		Confidentiality agreement with DELPHI

	•		Confidentiality Disclosure Agreement with TRACTECH (A subsidiary of EATON)

In addition, the Company limits its technologies, product designs and know-how to specific clients and suppliers. For example:

Design:

	•		Bilingual drawing and Spec. between specific clients

	•		Particular product spec’s (bilingual) and package agreements with clients on a case-by-case basis

Product Manufacturing:

	•		Manufacturing Process Flow for each specific product

	•		Control Plan for Production Management

	•		Potential Failure Mode and Effects Analysis

The Company believes that due to its long-standing cooperation with major customers, a difficult high entry barrier for it’s competitors exists. The Company’s know-how is critical in winning their customer’s trust and confidence, and adds value to the Company’s supply chain management.

Patents: None

Trademarks and Service Marks:
Accepted Trademarks

File Number

Country of Origin

Trademark

Acceptance Date

004450987

Europe

AFS

June 16, 2006

977317

Mexico

March 16, 2007

977316

Mexico

Componus Logo

March 16, 2007

Pending Trademarks

Application Number

Country of Origin

Trademark

Application Date

005678644

Europe

February 9, 2007

005678529

Europe

Componus Logo

February 9, 2007

5812200

China

December 27, 2006

5812199

China

Componus Logo

December 27, 2006

77071741

USA

December 27, 2006

Abandoned Trademarks

File Number

Country of Origin

Trademark

Application Date

78683861

USA

AFS Logo

August 12, 2005

77071736

USA

Componus Logo

December 27, 2006

MARKETING

The Company engages in multi-tiered marketing that leverages skills and expertise across its operations:

	•		Through various international trade events, the Company engages new suppliers and exhibitors with its business model.

	•		The Company’s international sales and sourcing representatives follow up with new suppliers and customers on a regular basis,

	•		The Company assesses new supplier’s capabilities, augments voids via MMS, and provides trial/sampling contracts with customers.

	•		Exhibiting subscribers to DIAS realize that successful engagement with a new North American customer extends beyond advertising and marketing, and creates additional opportunities for the Company’s MMS capabilities.

	•		Customers to DIAS contract with the Company to develop new supply sources.

	•		Customers encourage their international procurement offices to utilize the Company’s capabilities in complementary ways.

As part of this marketing effort, the Company operates a number of Web Sites with bi-lingual capability, including http://web.asiaforging.com, www.detroitautosalon.com,, and www.diasholding.com. Since mid-2007, the Company has participated in the SEMA/AAPEX Show in Las Vegas, the Society of Automotive Engineers Annual World Congress, the International Auto Aftermarket EXPO2007, and AMPA (Taipei International Auto Parts & Accessories Show) resulting in doubling the number of subscribers to DIAS, and increasing its potential supply base of factories.

CUSTOMERS

Our AFS subsidiary’s customers are comprised of reputable OEM and aftermarket companies, including, but not limited to:

	•		Affinia ( formerly Dana Corporation’s Brake and Chassis Group) ( Aftermarket — Automotive)

	•		Advanced Clutch Technologies ( Aftermarket — Racing clutches)

	•		Best Access Systems (OEM — Furniture)

	•		Centric Parts / Stoptech (aftermarket — Performance Racing Braking Systems)

	•		DESC Group/ Tremec Transmissions(OEM — Automotive)

	•		Eston/Linamar (OEM — Automotive)

	•		Eaton, formerly Tractech (OEM — Recreational off road vehicles)

	•		International Truck ( OEM — Commercial Trucks)

	•		Suspension Y Direccion S.A. De C.V. (Aftermarket — Automotive)

	•		TRW (Malaysia)

Our DIAS subsidiary was successful in promoting approximately 100 exhibitors at the Allen Park facility from companies primarily in Asia.

GOVERNMENT REGULATION

The Company adheres to the laws and regulations in the countries in which it operates primarily the USA, China, Taiwan, and Korea. To the extent that Company sources products from its China-based factory network, from time to time, 1) municipal, provincial, or the central government in China may impose favorable or unfavorable energy rationing that affects the timing and delivery of electrical power needed to operate factories, causing factories to operate at higher or lower capacities or alter shifts; 2) central government in China may allow better taxation or credit benefits that encourages exports or local consumption of products, thereby artificially increasing or decreasing incentives for exports, such as the recent March 2009 announcement encouraging lower taxation on automobiles with smaller engines; and 3) the central government of China’s monetary policy may be adjusted to reflect higher or lower valuation in comparison to other currencies used by the Company.

EMPLOYEES

The Company has 55 employees, with 44 at our AFS subsidiary and 11 at our DIAS subsidiary as of March 31, 2009.

FACILITIES

The Company owns its office at B1, 207, Sec. 3, Beishin Road, Shindian City, Taipei, 231, Taiwan, R.O.C. A portion of this office was leased to another company for three years and the rental income approximately US$7,394 per month.

The Company leases an office at 12F-2 No. 25, Lane 238, Szu Ping Road, Peitun Dist., Taichung, Taiwan, 40679. The lease is for two years from January 01, 2008 to December 31, 2009 and costs approximately $1,900 USD per month. The lease is renewable.

The Company leases a property at 16630 Southfield Road, Allen Park, Michigan 48101. The lease is for three years and costs approximately $13,266.67 per month. The lease is renewable.

The Company has no plans to acquire any property in the immediate future.

FINANCIAL CONDITION

The following table sets forth selected historical consolidated financial data from our consolidated financial statements and should be read in conjunction with our consolidated financial statements including the related notes and this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section hereof.


	Three Months Ended March 31,
	2009			2008
Revenues	$	1,763,506		$	3,418,102

Operating Expenses	$	702,688		$	716,228

Net Income (Loss)		($288,225	)	$	22,109

Net Income Per Common Share, Basic and Diluted		($0.002	)	$	0.00025

Weighted Average Number of Shares		102,000,000			89,000,000
Current Assets	$	5,823,880		$	6,361,084

Total Assets	$	9,871,708		$	10,230,137

Total Liabilities	$	8,374,862		$	8,688,825

Total Stockholders’ Equity	$	1,496,846		$	1,541,312

The following discussion and analysis is based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, and assets and liabilities during the periods reported. Estimates are used when accounting for certain items such as revenues, allowances for returns, early payment discounts, customer discounts, doubtful accounts, employee compensation programs, depreciation and amortization periods, taxes, inventory values, and valuations of investments, goodwill, other intangible assets and long-lived assets. We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. We believe that the following critical accounting policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries.

We value our inventories at the lower of cost or market. We write down inventory balances for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions.

Goodwill is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the Company’s carrying amount is greater than the fair value. In accordance with SFAS 142, the Company examined goodwill for impairment and determined that the Company’s carrying amount did not exceed the fair value, thus, there was no impairment.

Generally, sales are recognized when shipments are made to customers. Rebates, allowances for damaged goods and other advertising and marketing program rebates are accrued pursuant to contractual provisions and included in accrued expenses. Certain amount of our revenues fall under the percentage-of-completion method of accounting used for long-term contracts. Under this method, sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Sales and gross profit are adjusted prospectively for revisions in estimated total contract costs and contract values. Estimated losses are recorded when identified.

RESULTS OF OPERATIONS

Net Sales: Net sales for three months ended March 31, 2009 was $1,763,506 or 97% of Fourth Quarter, 2008 sales, and 52% of $3,418,102 for the three months ended March 31, 2008. Sales declined during the period primarily due to reduction of anticipated deliveries in timing and amount for several customers experiencing slower sales in both OEM and aftermarket sectors.

Gross Profit: Gross profit for the three months ended March 31, 2009 was $480,428 or 100% of Fourth Quarter, 2008, and 45% compared to the gross profit of $1,070,042 for the three months ended March 31, 2008 due to slightly better cost of goods control compared to the fourth quarter of 2008.

Operating Expenses: Operating expenses for the three months ended March 31, 2009 decreased to $702,688, or 98%, compared to $716,228 for the three month period ended March 31, 2009. Operating expenses as a percentage of sales increased in the three month period ended March 31, 2009 to 40% from 21% in the three month period ended March 31, 2008. The increase in operating expenses as percentage of sales was primarily due to increases in G&A, and advertising expenses related to the auto salon subsidiary and corporate compliance expenses.

Net Income/Loss: The Company had net (loss) of ($288,225) which was -16% of net sales, for the three month period ended March 31, 2009 as compared to a net income of $22,109, which was 0.006% of net sales, for the three month period ended March 31, 2008. The lower net income percentage in the current quarter as compared to the previous quarter a year ago was a result of sales decline, increased expenses from auto salon subsidiary operations and corporate compliance expenses.

Provision for Income Taxes: Our effective state and federal tax rate, adjusted for the effect of certain credits and adjustments, was approximately 38% and 38% for 2009 and 2008, respectively.

EFFECTS OF INFLATION

The Company’s business and operations have not been materially affected by inflation during the periods for which financial information is presented.

LIQUIDITY AND CAPITAL RESOURCES

Working capital was $2,550,982 at March 31, 2009, compared to $2,327,741 at December 31, 2008. This included cash and cash equivalents of $860,779 at March 31, 2009 and $809,937at December 31, 2008, respectively, as the Company continued to accrue inventory due to delays in deliveries by customers.

Receivables decreased $224,594 or 11% at March 31, 2009 to $1,784,654 at March 31, 2009 from $2,009,248 at December 31, 2008. The decrease in accounts receivable is attributable to resumption of delayed payments in fourth quarter, 2008.

Inventories decreased $280,175 or 11% to $2,333,516 at March 31, 2009 from $2,613,691 at December 31, 2008. The decrease in inventory was due to resumption of deliveries by Company’s major customer.

Continuing operations generated $454,978 of cash for the three months ended March 31, 2009, compared to use of ($860,452) of cash for the three months ended March 31, 2008. The increase in cash flows was primarily related to payments of account payable and collection of account receivables timing. Investing activities for continuing operations was favorable by $16,343 of cash during the three months ended March 31, 2009, compared to $111,186 used during the three months ended March 31, 2009. The use of cash by investing activities was primarily attributable to property & equipment. The financing activities during the three months ended March 31, 2009 used up $420,478 in cash from payments for short & long term debt and provided $50,843 in cash for the three month period ended March 31, 2009 compared with three months ended March 31, 2008 is decrease of ($192,691)

We believe that our cash on hand, cash generated by operations, and continued reduction of inventory as is customers continue to resume deliveries sufficient to meet the capital demands of our current operations during the 2009 fiscal year. Any major increases in sales, particularly in new products and new customer development, may require substantial capital investment. Failure to obtain sufficient capital could materially adversely impact our growth potential.

Outlook

The outlook for our products and services remains strong in the aftermarket sector and we are actively positioning products of our factory network across a broader segment of the OEM and aftermarket automotive supply chain. There are weaknesses in both sectors that will force our customers to consolidate their supply chains.

We believe the North American automotive new car market will be weak throughout 2009, and financial and organizational challenges within the U.S. OEMs remain, causing business uncertainty within the supply chain. Where possible, the Company will continue its effort to enlarge and expand its relations with automotive supplier consortiums and organizations in greater China that will provide attractive sourcing alternatives for both sectors.

Item 3. Quantitative & Qualitative Disclosures about Market Risks

The response to this item is included in “Item 1A Risk Factors”

Item 4(T). Controls and Procedures

(a) Evaluation of Disclosure and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). As of March 31, 2009, we completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. The Chief Executive Officer and Chief Financial Officer participated in this evaluation. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by the Annual Report.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. As promulgated in law and practice, internal control over financial reporting is a process developed, supervised, and managed by our Chief Executive Officer, our Chief Compliance Officer, and our Chief Financial Officer to provide reasonable assurance the financial statements prepared for external purposes are developed in accordance with generally accepted accounting principles, are reliable, and include policies and procedures that assure;

1) records are maintained in sufficient detail to reflect transactions and the disposition of Company assets accurately and fairly, 2) management has authorized all receipts and expenditures, 3) all transactions are recorded permitting accurate preparation of financial statements in accordance with generally accepted accounting principles and, 4) the prevention or early detection of unauthorized use, sales, or purchase of Company assets that would have a material effect on the financial statements.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives and may not prevent or detect inaccuracies and misstatements in the financial statements. In addition, current controls and procedures may not be effective in the future due to changing circumstances, practices, or personnel.

Management conducted an evaluation of the effectiveness of the internal controls over financial reporting as of March 31, 2009, as defined by Rule 13a-15(f) and based upon the framework provided by the Treadway Commission’s Committee of Sponsoring Organizations.

This annual report does not include an attestation report of the Company’s independent registered Public accounting firm regarding internal controls over financial reporting. Management report was not subject to attestation pursuant to temporary rules of the SEC that permit the Company to provide only the management’s report on the internal controls in the report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Part II Other Information

Item 1. Legal Proceedings

The Company is not currently a party to any threatened or pending legal proceedings, other than incidental litigation arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Item 1A Risk Factors

RISKS RELATED TO OUR BUSINESS

We are a holding company with substantially all of our operations conducted through our subsidiaries, our performance will be affected by the performance of our subsidiaries.

•

We have a history of operating losses.

There is no assurance that we will be profitable in the future. The Company incurred a net loss of $757,880 for the fiscal year ended December 31, 2007 and a loss of $562,367 for the fiscal year ended December 31, 2008. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern. We cannot be sure that we will achieve profitability in fiscal 2009 or thereafter. Continuing losses may exhaust our capital resources and force us to discontinue operations.

•

Weakness in the automotive industry would result in a substantial reduction in demand for the Company’s products which would have a material adverse effect on its business.

A prolonged weakness in the North American automotive industry would reduce the demand for our products and decrease our sales. In addition, if automobile manufacturers choose to incorporate more plastics, aluminum and other steel substitutes in their automobiles, it could reduce demand for our products. The Company has attempted to position its business mix to assist mitigating this risk. In this type of overall global environment, the Company is positioning its AFS subsidiary to adjust its balanced sales mix towards a higher content of automotive aftermarket supply chain sales. The Company expects that as overseas automotive component & system producers scale their businesses higher to meet domestic demand, many of these producers will begin to probe export opportunity into the North American automotive OEM market. The Company believes that its Detroit International Auto Salon exhibition center is positioned centrally in Detroit to assist these companies.

•

Our sales and earnings fluctuate due to the cyclical nature of the automotive industry.

The cyclical nature of the automotive industry is affected by such things as the level of consumer spending, the strength or weakness of the U.S. dollar and the impact of international trade and various factors, such as labor unrest and the availability of raw materials, which affect the ability of the automotive industry to actually build cars.

•

The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.

The automotive components market is highly competitive and fragmented. The Company competes with many companies engaged in the manufacture (forging and casting) and sale of automotive components. Competition within the steel industry, both domestically and worldwide, is intense and it is expected to remain so. The Company competes primarily on the basis of (1) price, (2) quality and (3) the ability to meet its customers’ product needs and delivery schedules. Some of the Company’s competitors have longer operating histories and financial, sales, marketing and design capabilities and other competitive resources which are

substantially greater than those of the Company. There can be no assurance that other companies will not attempt to enter or expand their presence in any of the Company’s existing product categories or in new categories in which the Company plans or may plan to develop products. If the Company is unable to compete successfully in this highly competitive market, its future prospects of success may be harmed.

•

The Company’s failure to pass on increases in the cost of raw materials such as steel to its customers would reduce the Company’s earnings.

If the Company is unable to pass on higher raw material costs to its customers it will be less profitable. The Company may not be able to adjust its product prices, especially in the short-term, to recover the costs of increases in raw material prices, which have reached historically high levels. The principal raw material is steel, and prices for steel are subject to market forces largely beyond the Company’s control, including demand by international steel producers, freight costs and speculation. Other raw materials include iron ore, coke and coking coal which are all used in their steel making processes. The Company can not be assured that customers will agree to pay higher prices for our steel products, sufficient for the Company to maintain its margins, without resistance or the selection of other suppliers or alternative materials. If this occurs the Company may lose customers and suffer a loss of earnings.

•

Approximately thirty-eight percent of the Company’s revenues was derived from one customer.

Although the Company expects this customer continues to value Company as a key supplier, discussions were initiated that would reduced the contribution of this customer’s revenues by as much as half if the customer consolidates purchases of certain product lines by integrating subassemblies outside of the Company’s factory supply chain. The Company is currently planning to adjust its abilities to meet the customer’s long-term objectives.

•

The Company is subject to delays caused by environmental and governmental liabilities and limitations.

The Company is subject to delays in delivery when our contracted factories encounter disputes resulting from substantial environmental liability and environmental and governmental limitations and governmental laws and regulations in the country where our contracted factories are located.

•

Product defects could cause the Company to incur significant product liability, warranty, repair and support costs and damage its reputation which would have a material adverse effect on its business.

Although the Company rigorously inspects the quality of its contracted factory products, defects may be discovered in future or existing products. These defects could cause the Company to incur significant warranty, expediting, support and repair costs and divert the attention of its project management and/or quality assurance and control personnel. It could also significantly damage the Company’s reputation and relationship with its distributors and customers which would adversely affect its business. In addition, such defects could result in personal injury or financial or other damages to customers who may seek damages with respect to such losses. A product liability claim against the Company, even if unsuccessful, would likely be time consuming and costly to defend.

•

The loss of our senior management and failure to attract and retain qualified personnel in a competitive labor market could limit our ability to execute our growth strategy, resulting in a slower rate of growth. We depend on the continued service of our senior management. Due to the nature of our business, we may have difficulty locating and hiring qualified personnel and retaining such personnel once hired.

The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could limit our ability to execute our growth strategy resulting in a slower rate of growth.

•		General economic downturns in general would have a material adverse effect on the Company’s business, operating results and financial condition.

•		The Company’s operations may in the future experience substantial fluctuations from period to period as a consequence of general economic conditions affecting consumer spending. Therefore, any economic downturns in general would have a material adverse effect on the Company’s business, operating results and financial condition.

•		A demand for payment of outstanding loans would have a material adverse effect on the Company.

Taiwan Cooperative Bank, First Commercial Bank and a number of other banks have extended loans to the Company of approximately $4,780,277. The loans are personally guaranteed by Mr. Hung-lang Huang, Chief Executive Officer and Chairman of the Board of the Company and Mrs. Huang Wang Bing-Chin, Chief Financial Officer and Director of the Company. An early demand of payment of any of the outstanding loans would have a material adverse effect on the Company.

RISKS RELATED TO INVESTMENT IN THE COMMON STOCK OF THE COMPANY

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We may need additional funds in the future. We may be unable to obtain additional funds or if we obtain financing it may not be on terms favorable to us. Investors may lose your entire investment.

Based on the Company’s current plans, management believes the Company’s existing cash and cash equivalents along with cash generated from operations will be sufficient to fund its operating expenses and capital requirements through December 31, 2009, although there is no assurance of this result, we may need funds in the future. If our capital resources are insufficient to meet future capital requirements, we will have to raise additional funds. If we are unable to obtain additional funds on terms favorable to us, we may be required to cease or reduce our operating activities.

•		If we raise additional funds by selling additional shares of our capital stock, the ownership interests of our stockholders will be diluted.

•		We do not anticipate paying any dividends.

No dividends have been paid on the common stock of the Company. The Company does not intend to pay cash dividends on its common stock in the foreseeable future, and anticipates that profits, if any, received from operations will be devoted to the Company’s future operations. Any decision to pay dividends will depend upon the Company’s profitability at the time, cash available therefore and other relevant factors.

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Delaware Law and our Charter Documents may Impede or Discourage a Takeover, which could Cause the Market Price of Shares of our Common Stock to Decline.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of our company, even if a change in control would be beneficial to our existing stockholders The ability of our board of directors to create and issue a new series of preferred stock and certain provisions of Delaware law could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock.

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Our stock trades on the electronic quotation system.

Company’s Common Stock currently trades on the over the counter Bulletin Board electronic quotation system under the symbol “DSHL.OB”. The Bulletin Board is a decentralized market regulated by the Financial Industry Regulatory Authority in which securities are traded via an electronic quotation system. There can be no assurance that a trading market for the Company’s shares will continue to exist in the future, and there can be no assurance that an active trading market will develop or be sustained. The market

price of the shares of Common Stock is likely to be highly volatile and may be significantly affected by factors such as actual or anticipated fluctuations in the Company’s operating results, announcements of technological innovations, new products or new contracts by the Company or its competitors, developments with respect to proprietary rights, adoption of new government regulations affecting the environment, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market price for the common stocks of technology companies. These types of broad market fluctuations may adversely affect the market price of the Company’s common stock. See Risk Factor “Our stock price may be highly volatile” below.

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Our shares of common stock are thinly traded, so stockholders may be unable to sell at or near ask prices or at all if they need to sell shares to raise money or otherwise desire to liquidate their shares.

Our common stock has from time to time been “thinly-traded,” meaning that the number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give stockholders any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

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Our common stock will be subject to “penny stock” rules which may be detrimental to investors.

If our common stock is not listed on a national exchange or market, the trading market for our common stock may become illiquid. Our common stock trades on the over-the-counter electronic bulletin board and, therefore, is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a “penny stock”. The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. The securities will become subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of purchasers in this offering to sell the Common Stock offered hereby in the secondary market.

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Our stock price may be highly volatile.

The market price of our common stock, like that of many other technology companies, has been highly volatile and may continue to be so in the future due to a wide variety of factors, including:

•

announcements of technological innovations by us, our collaborative partners or our present or potential competitors;

	•		our operating results and performance;

	•		developments or disputes concerning patents or other proprietary rights;

	•		acquisitions;

	•		litigation and government proceedings;

	•		adverse legislation;

	•		changes in government regulations;

	•		economic and other external factors; and

	•		general market conditions.

In addition, potential dilutive effects of future sales of shares of common stock by shareholders and by the Company could have an adverse effect on the market price of our shares.

In addition, the broader stock market has recently experienced significant price and volume fluctuations. This volatility has affected the market prices of securities issued by many companies for reasons unrelated to their operating performance and may adversely affect the price of our common stock. In addition, our announcements of our operating results, changes in general conditions in the economy or the financial markets and other developments affecting us, our affiliates or our competitors could cause the market price of our common stock to fluctuate substantially.

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

None.

Item 3. Defaults upon Senior Securities:

None

Item 4. Submission of Matters to a Vote of Security Holders:

None

Item 5. Other Information:

None

Item 6. Exhibits


31.1 (2)		Certification of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 (2)		Certification of Chief Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1(2)		Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.

32.2 (2)		Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.

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 hereunto duly authorized.


	DIAS HOLDING, INC. (Registrant)
Dated: May 15, 2009	By	/s/ Hung-Lang Huang
		Hung-Lang Huang, Chairman of the
		Board, Chief Executive Officer and President


Dated: May 15, 2009	By	/s/ Wang Bing-Chin Huang
		Wang Bing-Chin Huang , Director and
		Chief Financial Officer

DIAS Holding, Inc. 10-Q