UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission file number 000-25487
Domain Registration, Corp.
-------------------------------
(Name of issuer in its charter)
Nevada 88-0409159
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 031-088, Shennan Zhong Road,
Shenzhen City, P.R. China 518031
(Address of principal executive offices)
(Zip Code)
Issuer's telephone number: 011-86-21-61050200
Securities registered under Section 12(b) of the Exchange Act
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None
Securities registered under Section 12(g) of the Exchange Act:
Common stock $0.001 par value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|
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. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes |X| No |_|
As of June 29, 2007, the number of outstanding shares of the registrant's common
stock held by non-affiliates (excluding shares held by directors, officers and
others holding more than 5% of the outstanding shares of the class) was 650,000
shares. However, since the common stock was not then listed or traded on any
stock exchange or quoted through any nationally recognized quotation service,
such as the OTC Bulletin Board, it is impracticable to ascertain the aggregate
market value of those shares as of that date.
As of March 28, 2008, the registrant had outstanding 7,500,000 shares of common
stock.
DOCUMENTS INCORPORATED BY REFERENCE: None
Table of Contents
Page
Item 1. Business 2
Item 1A. Risk Factors 5
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 10
Item 6. Selected Financial and Other Data 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 16
Item 8. Financial Statements and Supplementary Data 16
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure 16
Item 9A. Controls and Procedures 17
Item 9B. Other Information 18
PART III
Item 10. Directors, Executive Officers and Corporate Governance 18
Item 11. Executive Compensation 20
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 21
Item 13. Certain Relationships and Related Transactions, and
Director Independence 23
Item 14. Exhibits, Financial Statement Schedules 23
PART IV
Item 15. Principal Accountant Fees and Services 24
Signatures
Exhibits
Forward-Looking Statements
This Annual Report contains forward-looking statements which relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
"Risk Factors," that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
As used in this Annual Report, references to "our company," "Company," "we" or
"us" refers to Domain Registration, Corp.., unless otherwise specifically stated
or the context requires otherwise. All share and per share information in this
Annual Report gives effect to a 10-for-1 forward stock split of our common stock
effected on October 10, 2007.
Item 1. Business
Our Corporate History
Domain Registration, Corp. was organized July 31, 2001 under the laws of the
State of Nevada. Through a merger with Bahamas Enterprises, Inc., the accounting
predecessor to our company organized under the laws of the State of Nevada on
July 10, 1996, it became a wholly-owned subsidiary of Suzy-Path, Corp. The
merger resulted in the direct acquisition of the assets comprising a going
business. Domain Registration, Corp owned domain names and maintained a web site
for customers to register domain names through a contact with Verio, Inc.
We are a development stage company that has not generated any revenue.
We maintain a mail address at P.O. Box 031-088, Shennan Zhong Road, Shenzhen
City, P.R. China 518031 Our telephone number is 011-86-21-61050200.
Our Proposed Business Activities
We intend to seek, investigate and, if such investigation warrants, engage in a
business combination with a private entity whose business presents an
opportunity for our shareholders. Our objectives discussed below are extremely
general and are not intended to restrict our discretion. This discussion of the
proposed business is not meant to be restrictive of our virtually unlimited
discretion to search for and enter into potential business opportunities.
We have no particular acquisition in mind and have not entered into any
negotiations regarding such an acquisition. Neither our officers nor any
affiliate has engaged in any negotiations with any representative of any company
regarding the possibility of an acquisition or merger between our company and
such other company. We have not yet entered into any agreement, nor do we have
any commitment or understanding to enter into or become engaged in a
transaction.
We will not restrict our potential candidate target companies to any specific
business, industry or geographical location and, thus, may acquire any type of
business. Further, we may acquire a venture which is in its preliminary or
development stage, one which is already in operation, or in a more mature stage
of its corporate existence. Accordingly, business opportunities may be available
in many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities difficult and complex.
We believe that there are numerous firms seeking the perceived benefits of a
publicly registered corporation. These benefits are commonly thought to include
the following: (i) the ability to use registered securities to acquire assets or
businesses; (ii) increased visibility in the marketplace; (iii) ease of
borrowing from financial institutions; (iv) improved stock trading efficiency;
(v) shareholder liquidity; (vi) greater ease in subsequently raising capital;
(vii) compensation of key employees through stock options; (viii) enhanced
corporate image; and (ix) a presence in the United States capital market. We
have not conducted market research and are not aware of statistical data to
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
2
Target companies interested in a business combination with our company may
include the following: (i) a company for whom a primary purpose of becoming
public is the use of its securities for the acquisition of other assets or
businesses; (ii) a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities on terms acceptable
to it; (iii) a company which desires to become public with less dilution of its
common stock than would occur upon an underwriting; (iv) a company which
believes that it will be able to obtain investment capital on more favorable
terms after it has become public (v) a foreign company which may wish an initial
entry into the United States securities market; or (vi) a company seeking one or
more of the other mentioned perceived benefits of becoming a public company.
We anticipate seeking out a target business through solicitation. Such
solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Such persons will have no relationship to
our management.
The analysis of new business opportunities will be undertaken by or under the
supervision of our executive officers and directors, none of whom is a business
analyst. Therefore, it is anticipated that outside consultants or advisors may
be utilized to assist us in the search for and analysis of qualified target
companies.
A decision to participate in a specific business opportunity will be made based
upon our analysis of the quality of the prospective business opportunity's
management and personnel, assets, the anticipated acceptability of products or
marketing concepts, the merit of a proposed business plan, and numerous other
factors which are difficult, if not impossible, to analyze using any objective
criteria. We have unrestricted flexibility in seeking, analyzing and
participating in potential business opportunities.
In our efforts to analyze potential acquisition targets, we will consider the
following kinds of factors: (a) potential for growth, indicated by new
technology, anticipated market expansion or new products; (b) competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole; (c) strength and
diversity of management, either in place or scheduled for recruitment; (d)
capital requirements and anticipated availability of required funds, to be
provided by our company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources; (e) the cost of participation by our company as compared to the
perceived tangible and intangible values and potentials; (f) the extent to which
the business opportunity can be advanced, (g) the accessibility of required
management expertise, personnel, raw materials, services, professional
assistance and other required items; and (h) other relevant factors.
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially available business opportunities may occur in many different
industries, and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to our limited capital available for
investigation, we may not discover or adequately evaluate adverse facts about
the opportunity to be acquired.
In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another entity. We also may acquire stock or assets of an
existing business. On the consummation of a transaction it is probable that the
present management and shareholders of the company will no longer be in control
of the company. In addition, our officers and directors, as part of the terms of
the acquisition transaction, likely will be required to resign and be replaced
by one or more new officers and directors without a vote of our shareholders.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of a transaction, we may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in our securities may
have a depressive effect on that market.
3
While the actual terms of a transaction to which we may be a party cannot be
predicted, it may be expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition as a "tax-free" reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.
With respect to any merger or acquisition, negotiations with target company
management are expected to focus on the percentage of our company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, our shareholders will in all likelihood
hold a substantially lesser percentage ownership interest in our company
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event we acquire a target company with substantial
assets. Any merger or acquisition effected by us can be expected to have a
significant dilutive effect on the percentage of shares held by our shareholders
at such time.
We will participate in a business opportunity only after the negotiation and
execution of appropriate agreements. Although the terms of such agreements
cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with our attorneys and
accountants, and will include miscellaneous other terms.
We are presently subject to all of the reporting requirements included in the
Exchange Act. Included in these requirements is our duty to file audited
financial statements as part of our Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as well as our
audited financial statements included in its annual report on Form 10-K. If such
audited financial statements are not available at closing, or within time
parameters necessary to insure our compliance with the requirements of the
Exchange Act, or if the audited financial statements provided do not conform to
the representations made by the target company, the closing documents may
provide that the proposed transaction will be voidable at the discretion of our
present management.
It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial cost for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofore incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the participation
in a specific business opportunity, the failure to consummate that transaction
may result in the loss to the Registrant of the related costs incurred.
Our company, based on our proposed business activities, is a "blank check"
company. The U.S. Securities and Exchange Commission (the "SEC") defines those
companies as "any development stage company that is issuing a penny stock,
within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and that has no specific business plan or
purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Under SEC Rule 12b-2 under the Securities
Act of 1933, as amended (the "Securities Act"), we also qualify as a "shell
company," because we have no or nominal assets (other than cash) and no or
nominal operations. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination. We intend to comply with the
periodic reporting requirements of the Exchange Act for so long as we are
subject to those requirements.
4
Competition
We will remain an insignificant participant among the firms which engage in the
acquisition of business opportunities. There are many established venture
capital and financial concerns which have significantly greater financial and
personnel resources and technical expertise than us. In view of our limited
financial resources and limited management availability, we may be at a
competitive disadvantage compared to our competitors.
Employees
We presently have no employees apart from our management. Each of our officers
is engaged in outside business activities and anticipates that he will devote to
our business very limited time until the acquisition of a successful business
opportunity has been identified. We expect no significant changes in the number
of our employees other than such changes, if any, incident to a business
combination.
We intend to hire additional management and other support personnel when we have
reached a point in our proposed growth that would allow for such employment. In
the interim, we will rely upon consultants to assist us in identifying and
investigating acquisition opportunities.
Item 1A. Risk Factors
An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors before deciding to invest in our
company. If any of the following risks actually occur, our business, financial
condition, results of operations and prospects for growth would likely suffer.
As a result, you may lose all or part of your investment in our company.
We are a development stage company and may never be able to effectuate our
business plan.
As a development stage company we may not be able to successfully effectuate our
business plan. There can be no assurance that we will ever achieve any revenues
or profitability. The revenue and income potential of our proposed business and
operations is unproven as the lack of operating history makes it difficult to
evaluate the future prospects of our business.
We require financing to acquire businesses and implement our business plan. We
cannot assure you that we will be successful in obtaining financing or acquiring
businesses, or in operating those acquired businesses in a profitable manner.
We expect losses in the future because we have no revenue.
As we have no current revenue, we are expecting losses over the next 12 months
because we do not yet have any revenues to offset the expenses associated with
the marketing of our services. We cannot guarantee that we will ever be
successful in generating revenues in the future. We recognize that if we are
unable to generate revenues, we will not be able to earn profits or continue
operations. There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations.
If our business plans are not successful, we may not be able to continue
operations as a going concern and our stockholders may lose their entire
investment in us.
Since inception, we have had insignificant revenues and incurred a cumulative
net loss of $(100,423) through December 31, 2007. In addition, we had a working
capital deficit of $12,355 at December 31, 2007. These factors raise substantial
doubt about the Company's ability to continue as a going concern. We will, in
all likelihood, sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may result in our
incurring a net operating loss that will increase continuously until we can
consummate a business combination with a profitable business opportunity. We
cannot assure you that we can identify a suitable business opportunity and
consummate a business combination. If we cannot continue as a going concern, our
stockholders may lose their entire investment in us.
5
We do not have any agreement for a business combination or other transaction.
We have no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public entity.
We cannot assure you that we will successfully identify and evaluate suitable
business opportunities or that we will conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. We cannot guarantee that we will be able to
negotiate a business combination on favorable terms, and there is consequently a
risk that future funds allocated to the purchase of our shares will not be
invested in a company with active business operations.
Future success is highly dependent on the ability of management to locate and
attract a suitable acquisition.
The success of our proposed plan of operation will depend to a great extent on
the operations, financial condition and management of the identified target
company. While business combinations with entities having established operating
histories are preferred, there can be no assurance that we will be successful in
locating candidates meeting such criteria. The decision to enter into a business
combination will likely be made without detailed feasibility studies,
independent analysis, market surveys or similar information which, if we had
more funds available to it, would be desirable. In the event we complete a
business combination the success of our operations will be dependent upon
management of the target company and numerous other factors beyond our control.
We cannot assure you that we will identify a target company and consummate a
business combination.
There is competition for those private companies suitable for a merger
transaction of the type contemplated by management.
We are in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
We have not conducted market research to identify business opportunities, which
may affect our ability to identify a business to merge with or acquire.
We have neither conducted nor have others made available to us results of market
research concerning prospective business opportunities. Therefore, we have no
assurances that market demand exists for a merger or acquisition as contemplated
by us. Our management has not identified any specific business combination or
other transactions for formal evaluation by us, such that it may be expected
that any such target business or transaction will present such a level of risk
that conventional private or public offerings of securities or conventional bank
financing will not be available. There is no assurance that we will be able to
acquire a business opportunity on terms favorable to us. Decisions as to which
business opportunity to participate in will be unilaterally made by our
management, which may act without the consent, vote or approval of our
stockholders.
6
Management intends to devote only a limited amount of time to seeking a target
company which may adversely impact our ability to identify a suitable
acquisition candidate.
While seeking a business combination, management anticipates devoting very
limited time to our affairs in total. None of our officers has entered into a
written employment agreement with us and is not expected to do so in the
foreseeable future. This limited commitment may adversely impact our ability to
identify and consummate a successful business combination.
We are dependent on the services of our executive officers to obtain capital
required to implement our business plan and for identifying, investigating,
negotiating and integrating potential acquisition opportunities. The loss of
services of senior management could have a substantial adverse effect on us. The
expansion of our business will be largely contingent on our ability to attract
and retain highly qualified corporate and operations level management team. We
cannot assure you that we will find suitable management personnel or will have
financial resources to attract or retain such people if found.
The time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the most
attractive private companies.
Target companies that fail to comply with SEC reporting requirements may delay
or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including audited financial statements for the company acquired.
The time and additional costs that may be incurred by some target entities to
prepare these statements may significantly delay or essentially preclude
consummation of an acquisition. Otherwise suitable acquisition prospects that do
not have or are unable to obtain the required audited statements may be
inappropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
We may be subject to further government regulation which would adversely affect
our operations.
Although we will be subject to the reporting requirements under the Exchange
Act, management believes we will not be subject to regulation under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), since
we will not be engaged in the business of investing or trading in securities. If
we engage in business combinations which result in our holding passive
investment interests in a number of entities, we could be subject to regulation
under the Investment Company Act. If so, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. We have obtained no formal determination from the SEC as to
our status under the Investment Company Act and, consequently, violation of the
Investment Company Act could subject us to material adverse consequences.
Any potential acquisition or merger with a foreign company may subject us to
additional risks.
If we enter into a business combination with a foreign concern, we will be
subject to risks inherent in business operations outside of the United States.
These risks include, for example, currency fluctuations, regulatory problems,
punitive tariffs, unstable local tax policies, trade embargoes, risks related to
shipment of raw materials and finished goods across national borders and
cultural and language differences. Foreign economies may differ favorably or
unfavorably from the United States economy in growth of gross national product,
rate of inflation, market development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and in other
respects.
We may need to raise additional capital to expand our operations and execute our
business plan. If our operations do not produce the necessary cash flow, or if
we cannot obtain needed funds, we may be forced to reduce or cease our
activities with consequent loss to investors.
We have a need for cash in order to pay obligations currently due in a timely
manner, and to finance our business operations. Although we believe that we have
sufficient resources and recurring revenues to conduct our operations for the
next 12 months, our continued operations in general will depend upon the
sustainability of cash flow from our operations, or our ability to raise
additional funds if required through equity or debt financing. There is no
assurance that we will be able to obtain additional funding when it is needed,
or that such funding, if available, will be obtainable on terms acceptable to
us. If our operations do not produce the necessary cash flow, or if we cannot
obtain needed funds, we may be forced to reduce or cease our activities with
consequent loss to investors. In addition, should we incur significant presently
unforeseen expenses or delays, we may not be able to accomplish our goals.
7
If we fail to develop and maintain an effective system of internal controls, we
may not be able to accurately report our financial results or prevent fraud, as
a result, current and potential shareholders could lose confidence in our
financial reports, which could harm our business and the trading price of our
common stock.
Effective internal controls are necessary for us to provide reliable financial
reports and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of
2002 requires us to evaluate and report on our internal controls over financial
reporting. Our independent registered public accounting firm will annually
attest to our evaluation, as well as issue its own opinion on our internal
controls over financial reporting, beginning with our Annual Report for fiscal
years ended after December 31, 2008. We have prepared for compliance with
Section 404 by strengthening, assessing and testing our system of internal
controls to provide the basis for our report. The process of strengthening our
internal controls and complying with Section 404 has been expensive and time
consuming, and has required significant management attention. We cannot be
certain that the measures we have undertaken will ensure that we will maintain
adequate controls over our financial processes and reporting in the future.
Furthermore, if we are able to rapidly grow our business, the internal controls
that we will need will become more complex, and significantly more resources
will be required to ensure our internal controls remain effective. Failure to
implement required controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet our
reporting obligations. If we or our auditors discover a material weakness in our
internal controls, the disclosure of that fact, even if the weakness is quickly
remedied, could diminish investors' confidence in our financial statements and
harm our stock price. In addition, non-compliance with Section 404 could subject
us to a variety of administrative sanctions, including the suspension of
trading, ineligibility for listing on the OTC Bulletin Board, one of the Nasdaq
Stock Markets or national securities exchanges, and the inability of registered
broker-dealers to make a market in our common stock, which would further reduce
our stock price.
Our principal stockholder, officer and director owns a approximately 13.34% of
our voting stock and investors will not have any voice in our management, which
could result in decisions adverse to our general shareholders.
Our principal stockholder, officer and director owns beneficially approximately
13.34% of our outstanding common stock. As a result, she will have the ability
to control substantially all matters submitted to our stockholders for approval
including: (a) election of our board of directors; (b) removal of any of our
directors; (c) amendments of our Articles of Incorporation or bylaws; (d)
adoption of measures that could delay or prevent a change in control or impede a
merger, takeover or other business combination involving us, or (e) other
significant corporate transactions.
Our failure to adopt certain corporate governance procedures may prevent us from
obtaining a listing on Nasdaq or a national securities exchange.
Our president and chief executive officer is our sole director and therefore is
not "independent" as that term is defined Rule 10A-3 under the Exchange Act. As
a result, we do not have an Audit or Compensation Committee. The functions of
those committees are conducted by our Board of Directors. Consequently, there is
a potential conflict of interest in Board decisions that may adversely affect
our ability to become a listed security on NASDAQ or a national securities
exchange and as a result adversely affect the liquidity of our common stock.
8
Trading in our shares of common stock is limited, and will not improve unless we
increase our sales, become profitable and secure more active market makers.
There is a limited trading market for our common stock. There can be no
assurance that a regular trading market for our securities will continue to
develop or that it will be sustained. The trading price of our securities could
be subject to wide fluctuations, in response to quarterly variations in our
operating results, announcements by us or others, developments affecting us, and
other events or factors. In addition, the stock market has experienced extreme
price and volume fluctuations in recent years. These fluctuations have had a
substantial effect on the market prices for many companies, often unrelated to
the operating performance of such companies, and may adversely affect the market
prices of the securities Such risks could have an adverse affect on the stock's
future liquidity.
We may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value.
Our Articles of Incorporation authorizes the issuance of 50 million shares of
common stock. The future issuance of common stock may result in substantial
dilution in the percentage of our common stock held by our then existing
shareholders. We may value any common stock issued in the future on an arbitrary
basis. The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the shares held
by our investors, and might have an adverse effect on any trading market for our
common stock.
Our common stock is subject to the "Penny Stock" Rules of the SEC and the
trading market in our securities is limited, which makes transactions in our
stock cumbersome and may reduce the value of an investment in our stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock," for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (a)
that a broker or dealer approve a person's account for transactions in penny
stocks; and (b) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form: (a) sets forth the basis on which the
broker or dealer made the suitability determination; and (b) that the broker or
dealer received a signed, written agreement from the investor prior to the
transaction. Generally, brokers may be less willing to execute transactions in
securities subject to the "penny stock" rules. This may make it more difficult
for investors to dispose of our Common shares and cause a decline in the market
value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
Because we do not intend to pay any cash dividends on our common stock, our
stockholders will not be able to receive a return on their shares unless they
sell them.
We intend to retain any future earnings to finance the development and expansion
of our business. We do not anticipate paying any cash dividends on our common
stock in the foreseeable future. Unless we pay dividends, our stockholders will
not be able to receive a return on their shares unless they sell them. We cannot
assure you that you will be able to sell shares when you desire to do so.
9
ITEM 2. Description of Property
We do not own or lease any real property. We maintain a post office address at
P.O. Box 031-088, Shennan Zhong Road, Shenzhen City, P.R. China 518031.
ITEM 3. Legal Proceedings
There are no pending legal proceedings to which we are a party or in which any
of our directors, officers or affiliates, any owner of record or beneficially of
more than 5% of any class of our voting securities, or security holder is a
party adverse to us or has a material interest adverse to us. Our property is
not the subject of any pending legal proceedings.
ITEM 4. Submission of Matters to a Vote of Security Holders
We did not submit any matter to a vote of security holders during the fiscal
quarter ended December 31, 2007.
PART II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and
issuer Purchases of Equity Securities
Market Information
Our common stock has been quoted on the OTC Bulletin Board under the symbol
"DOMR.OB" since June 1, 2007. However, given the limited number of record
holders and the fact that we are a "shell company" (as defined in Rule 12b-2
under the Exchange Act), trading has been limited and quotations sporadic.
Record Holders
On April 7, 2008, we had approximately 21 holders of record of our common stock.
Dividends
We have not declared or paid any cash dividends on our common stock nor do we
anticipate paying any in the foreseeable future. Furthermore, we expect to
retain any future earnings to finance its operations and expansion. The payment
of cash dividends in the future will be at the discretion of our Board of
Directors and will depend upon our earnings levels, capital requirements, any
restrictive loan covenants and other factors the Board considers relevant.
Sales of Unregistered Securities
We did not issue or sell any unregistered securities during the year ended
December 31, 2007.
10
Purchases of Our Equity Securities
Neither we nor any of our affiliates purchased any equity securities from our
stockholders during our fiscal quarter ended December 31, 2007.
ITEM 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and the related
notes thereto included elsewhere in this Form 10-K. The matters discussed herein
contain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, which involve risks and uncertainties. All statements
other than statements of historical information provided herein may be deemed to
be forward-looking statements. Without limiting the foregoing, the words
"believes", "anticipates", "plans", "expects" and similar expressions are
intended to identify forward-looking statements. Factors that could cause actual
results to differ materially from those reflected in the forward-looking
statements include, but are not limited to, those discussed under the heading
"Factors that May Affect Future Results" and elsewhere in this report and the
risks discussed in our other filings with the SEC. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis, judgment, belief or expectation only as of the date
hereof.
Plan of Operation
We will attempt to acquire other assets or business operations that will
maximize shareholder value. No specific assets or businesses have been
definitively identified and there is no certainty that any such assets or
business will be identified or any transactions will be consummated.
We expect that we will need to raise funds in order to effectuate our business
plan. We will seek to establish or acquire businesses or assets with funds
raised either via the issuance of shares or debt. There can be no assurance that
additional capital will be available to us. We may seek to raise the required
capital by other means. We may have to issue debt or equity or enter into a
strategic arrangement with a third party. We currently have no agreements,
arrangements or understandings with any person to obtain funds through bank
loans, lines of credit or any other sources. Since we have no such arrangements
or plans currently in effect, our inability to raise funds will have a severe
negative impact on our ability to remain a viable company. In pursuing the
foregoing goals, we may seek to expand or change the composition of the Board or
make changes to our current capital structure, including issuing additional
shares or debt and adopting a stock option plan.
We have had no revenues from inception through December 31, 2007. We have a loss
from inception through December 31, 2006 of $ $93,005 and a loss from inception
through December 30, 2007 of $(100,423). We do not expect to generate any
revenues over the next twelve months. Our principal business objective for the
next 12 months will be to seek, investigate and, if such investigation warrants,
engage in a business combination with a private entity whose business presents
an opportunity for our shareholders.
During the next 12 months we anticipate incurring costs related to filing of
Exchange Act reports, and costs relating to consummating an acquisition. We
believe we will be able to meet these costs through use of funds in our treasury
and additional amounts, as necessary, to be loaned by or invested in us by our
stockholder, management or other investors. We have no specific plans,
understandings or agreements with respect to the raising of such funds, and we
may seek to raise the required capital by the issuance of equity or debt
securities or by other means. Since we have no such arrangements or plans
currently in effect, our inability to raise funds for the consummation of an
acquisition may have a severe negative impact on our ability to become a viable
company.
The capital requirements relating to implementation of our business plan will be
significant.
11
Management plans to rely on the proceeds from new debt or equity financing and
the sale of shares held by it to finance its ongoing operations. During 2008, we
intend to continue to seek additional capital in order to meet our cash flow and
working capital. There is no assurance that we will be successful in achieving
any such financing or raise sufficient capital to fund our operations and
further development. We cannot assure you that financing will be available to us
on commercially reasonable terms, if at all. If we are not successful in
sourcing significant additional capital in the near future, we will be required
to significantly curtail or cease ongoing operations and consider alternatives
that would have a material adverse affect on our business, results of operations
and financial condition.
Restated Financial Statements.
We had determined that the accounting treatment of the merger transaction
between Bahamas Enterprises, Inc. and Suzy-Path, Corp. was incorrect. On October
9, 2001, we treated the merger of these entities as a business acquisition using
the purchase method of accounting as described by SFAS No. 141, "Business
Combinations." Upon subsequent review of the transaction, this was determined to
be an incorrect treatment.
Business combinations under SFAS No. 141 apply to the acquisition of a
business. Bahamas Enterprises, Inc. was a non-operating public shell
corporation, and therefore, not a business. For reporting purposes, the
transaction is treated as a capital transaction where the acquiring corporation
issued stock for the net monetary assets of the shell corporation, accompanied
by a recapitalization. The accounting is similar in form to a reverse
acquisition, except that goodwill or other intangibles are not recorded.
In addition, on October 10, 2001, we had a business combination that
occurred between Suzy-Path, Corp., our parent corporation, and us, as a wholly
owned subsidiary. The parent and subsidiary were consolidated for financial
purposes. SFAS No. 141, "Business Combinations," does not apply to the
transaction as both entities were under common control. In accordance with APB
No. 16 the merger was treated as an exchange of equity of entities under common
control where the merged financial statements of Domain Registration, Corp. were
the consolidated financial statements of Suzy-Path, Corp. and subsidiaries, are
included with Domain Registration, Corp. all as if the business transaction had
occurred at the beginning of the reporting period.
Prior to the restatement of the financial statements, the goodwill, as of
December 31, 2001 through December 31, 2003, net of amortization was $1,700.
Financial Condition
Our auditor's going concern opinion for prior years ended and the notation
in the financial statements indicate that we do not have significant cash or
other material assets and that we are relying on advances from stockholders,
officers and directors to meet limited operating expenses. We do not have
sufficient cash or other material assets nor do we have sufficient operations or
an established source of revenue to cover our operational costs that would allow
us to continue as a going concern.
Liquidity and Capital Resources
As of December 31, 2007, we had no assets and total liabilities of $12,355 and
we had a negative net worth of $12,355. As of December 31, 2006, we had no
assets and total liabilities of $88,905 and we had a negative net worth of
$88,905.
The capital requirements relating to implementation of our business plan will be
significant.
Since we have had no operating history nor any revenues or earnings from
operations, with no significant assets or financial resources, we will in all
likelihood sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in our
incurring a net operating loss which will increase continuously until we can
consummate a business combination with a profitable business opportunity and
consummate such a business combination.
12
We are dependent upon our principal stockholder and officer to meet any de
minimis costs that we may incur.
Critical Accounting Policies and Estimates
We prepare our financial statements in accordance with accounting principles
generally accepted in the United States, and make estimates and assumptions that
affect our reported amounts of assets, liabilities, revenue and expenses. We
base our estimates on historical experience and other assumptions that we
believe are reasonable in the circumstances. Actual results may differ from
these estimates.
The following critical accounting policies affect our more significant estimates
and assumptions used in preparing our consolidated financial statements.
Our financial statements have been prepared on the going concern basis, which
assumes the realization of assets and liquidation of liabilities in the normal
course of operations. If we were not to continue as a going concern, we would
likely not be able to realize on our assets at values comparable to the carrying
value or the fair value estimates reflected in the balances set out in the
preparation of our financial statements. There can be no assurances that we will
be successful in generating additional cash from equity or other sources to be
used for operations. Our financial statements do not include any adjustments to
the recoverability of assets and classification of assets and liabilities that
might be necessary should we be unable to continue as a going concern
Off-Balance Sheet Arrangements
None.
Critical Accounting Policies and Estimates
We prepare our financial statements in accordance with accounting principles
generally accepted in the United States, and make estimates and assumptions that
affect our reported amounts of assets, liabilities, revenue and expenses. We
base our estimates on historical experience and other assumptions that we
believe are reasonable in the circumstances. Actual results may differ from
these estimates.
The following critical accounting policies affect our more significant estimates
and assumptions used in preparing our consolidated financial statements.
Our financial statements have been prepared on the going concern basis, which
assumes the realization of assets and liquidation of liabilities in the normal
course of operations. If we were not to continue as a going concern, we would
likely not be able to realize on our assets at values comparable to the carrying
value or the fair value estimates reflected in the balances set out in the
preparation of our financial statements. There can be no assurances that we will
be successful in generating additional cash from equity or other sources to be
used for operations. Our financial statements do not include any adjustments to
the recoverability of assets and classification of assets and liabilities that
might be necessary should we be unable to continue as a going concern
Going Concern
The nature of our financial status makes us lack the characteristics of a going
concern. This is because the company, due to its financial condition, may have
to seek loans or the sale of its securities to raise cash to meet its cash
needs. We have no revenue and no cash. The level of current operations does not
sustain our expenses and we have no commitments for obtaining additional
capital. These factors, among others, raise substantial doubt about its ability
to continue as a going concern.
13
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R "Share Based Payment." This statement is a revision to SFAS 123 and
supersedes Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock Issued to Employees," and amends FASB Statement No. 95, "Statement of Cash
Flows." This statement requires a public entity to expense the cost of employee
services received in exchange for an award of equity instruments. This statement
also provides guidance on valuing and expensing these awards, as well as
disclosure requirements of these equity arrangements. This statement is
effective for the first interim reporting period that begins after June 15,
2005.
SFAS 123R permits public companies to choose between the following two adoption
methods:
1. A "modified prospective" method in which compensation cost is
recognized beginning with the effective date (a) based on the requirements
of SFAS 123R for all share-based payments granted after the effective date
and (b) based on the requirements of Statement 123 for all awards granted
to employees prior to the effective date of SFAS 123R that remain unvested
on the effective date, or
2. A "modified retrospective" method which includes the requirements of
the modified prospective method described above, but also permits entities
to restate based on the amounts previously recognized under SFAS 123 for
purposes of pro forma disclosures either (a) all prior periods presented
or (b) prior interim periods of the year of adoption.
As we do not currently have share based payments, we expect no impact to the
financial statements due to the adoption of SFAS 123R.
In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of
FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial
instruments that contain an embedded derivative and that otherwise would require
bifurcation to be accounted for as a whole on a fair value basis, at the
holders' election. SFAS No. 155 also clarifies and amends certain other
provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have
a material impact on our financial condition or results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets--an Amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS
No. 156 provides guidance on the accounting for servicing assets and liabilities
when an entity undertakes an obligation to service a financial asset by entering
into a servicing contract. This statement is effective for all transactions in
fiscal years beginning after September 15, 2006. We do not expect that the
adoption of SFAS No. 156 will have a material impact on our financial condition
or results of operations.
In June 2006, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is,
Gross versus Net Presentation)" ("EITF 06-3"). EITF 06-3 provides that the
presentation of taxes assessed by a governmental authority that is directly
imposed on a revenue-producing transaction between a seller and a customer on
either a gross basis (included in revenues and costs) or on a net basis
(excluded from revenues) is an accounting policy decision that should be
disclosed. The provisions of EITF 06-3 will be effective for us as of January 1,
2007. We do not expect that the adoption of EITF 06-3 will have a material
impact on our financial statements.
In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies
the recognition threshold and measurement of a tax position taken on a tax
return. FIN 48 is effective for fiscal years beginning after December 15, 2006.
FIN 48 also requires expanded disclosure with respect to the uncertainty in
income taxes. We are currently evaluating the requirements of FIN 48 and the
impact this interpretation may have on our financial statements.
14
In September 2006, the SEC Staff issued SEC Staff Accounting Bulletin 107,
"Implementation Guidance for FASB 123 (R)." The staff believes the guidance in
the SAB will assist issuers in their initial implementation of Statement 123R
and enhance the information received by investors and other users of financial
statements, thereby assisting them in making investment and other decisions.
This SAB includes interpretive guidance related to share-based payment
transactions with non-employees, the transition from nonpublic to public entity
status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financials instruments
issued under share-based payment arrangements, the classification of
compensation expense, non-GAAP financial measures, first-time adoption of
Statement 123R in an interim period, capitalization of compensation cost related
to share-based payment arrangements, the accounting for income tax effects of
share-based payment arrangements upon adoption of Statement 123R and disclosures
of MD&A subsequent to adoption of Statement 123R.
In September 2006, the SEC Staff issued SEC Staff Accounting Bulletin 107,
"Implementation Guidance for FASB 123 (R)." The staff believes the guidance in
the SAB will assist issuers in their initial implementation of Statement 123R
and enhance the information received by investors and other users of financial
statements, thereby assisting them in making investment and other decisions.
This SAB includes interpretive guidance related to share-based payment
transactions with non-employees, the transition from nonpublic to public entity
status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financials instruments
issued under share-based payment arrangements, the classification of
compensation expense, non-GAAP financial measures, first-time adoption of
Statement 123R in an interim period, capitalization of compensation cost related
to share-based payment arrangements, the accounting for income tax effects of
share-based payment arrangements upon adoption of Statement 123R and disclosures
of MD&A subsequent to adoption of Statement 123R.
In September 2006, the SEC Staff issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in the Current Year Financial Statements" ("SAB No. 108"). SAB No.
108 requires the use of two alternative approaches in quantitatively evaluating
materiality of misstatements. If the misstatement as quantified under either
approach is material to the current year financial statements, the misstatement
must be corrected. If the effect of correcting the prior year misstatements, if
any, in the current year income statement is material, the prior year financial
statements should be corrected. In the year of adoption (fiscal years ending
after November 15, 2006 or calendar year 2006 for us), the misstatements may be
corrected as an accounting change by adjusting opening retained earnings rather
than being included in the current year income statement. We do not expect that
the adoption of SAB No. 108 will have a material impact on our financial
condition or results of operations.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and will be adopted by the Company in the first quarter of fiscal year
2009. We do not expect that the adoption of SFAS 157 will have a material impact
on our financial condition or results of operations.
15
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans" ("SFAS No. 158"). SFAS
No. 158 requires companies to recognize in their statement of financial position
an asset for a plan's overfunded status or a liability for a plan's underfunded
status and to measure a plan's assets and its obligations that determine its
funded status as of the end of the company's fiscal year. Additionally, SFAS No.
158 requires companies to recognize changes in the funded status of a defined
benefit postretirement plan in the year that the changes occur and those changes
will be reported in comprehensive income. The provision of SFAS No. 158 that
will require us to recognize the funded status of our postretirement plans, and
the disclosure requirements, will be effective for us as of December 31, 2006.
We do not expect that the adoption of SFAS No. 158 will have a material impact
on our financial statements.
FAS 123(R)-5 was issued on October 10, 2006. The FSP provides that instruments
that were originally issued as employee compensation and then modified, and that
modification is made to the terms of the instrument solely to reflect an equity
restructuring that occurs when the holders are no longer employees, then no
change in the recognition or the measurement (due to a change in classification)
of those instruments will result if both of the following conditions are met:
(a). There is no increase in fair value of the award (or the ratio of intrinsic
value to the exercise price of the award is preserved, that is, the holder is
made whole), or the anti-dilution provision is not added to the terms of the
award in contemplation of an equity restructuring; and (b). All holders of the
same class of equity instruments (for example, stock options) are treated in the
same manner. The provisions in this FSP shall be applied in the first reporting
period beginning after the date the FSP is posted to the FASB website. We will
evaluate whether the adoption will have any impact on your financial statements.
In February 2007, the Financial Accounting Standards Board (the "FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities--Including an amendment of
FASB Statement No. 115" (SFAS 159"). SFAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. This Statement is expected to expand the use of fair
value measurement, which is consistent with the Board's long-term measurement
objectives for accounting for financial instruments. This Statement is effective
as of the beginning of an entity's first fiscal year that begins after November
15, 2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to apply
the provisions of FASB Statement No. 157, Fair Value Measurements. We will
evaluate whether the adoption will have any impact on your financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to small reporting comapnies.
Item 8. Financial Statements
The Financial Statements in this Annual Report are presented commencing on page
F-1 following Item 15.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
On March 5, 2008 we appointed the firm of Moore & Associates, Charter
("New Auditor"), as our independent auditor and dismissed the firm of Kyle L
Tingle , CPA, LLC ("Former Auditor"), which had served as our independent
auditor until that date.
Our Board of Directors approved the decision to dismiss the Former
Accountant and engage the New Auditor.
The reports of the Former Auditor on our financial statements for the
fiscal years ended December 31, 2005 and December 31, 2006 did not contain an
adverse opinion, a disclaimer of opinion or any qualifications or modifications
related to uncertainty, limitation of audit scope or application of accounting
principles, except that report of the Former Auditor on our financial statements
for the fiscal year ended December 31, 2006 expressed "substantial doubt about
our ability to continue as a going concern" and stated that "The financial
16
statements do not include any adjustments that might result from the outcome of
this uncertainty". During the fiscal years ended December 31, 2005 and December
31, 2006 and the period from January 1, 2007 to March 5, 2008, we did not have
any disagreements (within the meaning of Instruction 4 of Item 304 of Regulation
S-K) with the Former Auditor as to any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure and
there have been no reportable events (as defined in Item 304 of Regulation S-K).
We furnished the Former Auditor with a copy of the disclosures in the Form
8-K we filed with the SEC reporting the change in accountants and the Former
Auditor has agreed to file a letter addressed to the Securities and Exchange
Commission stating that it agreed with the statements in our Form 8-K. A copy of
that letter will be filed as an exhibit to an amendment to that Form 8-K.
ITEM 9A. Controls and Procedures
Our management is responsible for establishing and maintaining an adequate
internal control structure and procedures over our financial reporting. Our
management evaluated, with the participation of the Chief Executive Officer and
our Chief Financial Officer, the effectiveness of our internal control over
financial reporting as of December 31, 2007. This evaluation was based on
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission, or COSO, Internal Control-Integrated Framework.
Our internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect our transactions and dispositions of the
assets;
(2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are
being made only in accordance with authorizations of our management and
Board of Directors; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of our assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, 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.
Our management, which assumed control of our company in November 2007
following the acquisition of a controlling interest by Max Time Enterprise
Limited, performed an assessment of the effectiveness of our internal control
over financial reporting as of December 31, 2007. Based upon such assessment,
and considering that we are a "shell company" without business operations,
management concluded that our operational procedures were adequate in the areas
cash and bank account management processes. Management will continue to assess
the adequacy of our financial reporting systems in contemplation of a
transaction with a target business. We anticipate that following a business
combination with a target business, we will have to substantially upgrade our
systems to ensure the reliability of our financial statements.
There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act)
during our fourth fiscal quarter for the year ended December 31, 2007 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
17
*The foregoing report shall not be deemed to be filed for purposes of Section 18
of the Exchange Act or otherwise subject to the liabilities of that section.
This annual report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management's report in
this annual report."
Item 9B. Other Information.
Not applicable.
PART III
ITEM 10. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Our executive officers and directors are:
Name Age Position
- --------------------------------------------------------------------------------
Hui Ping Cheng 32 Chairman, President, Chief Executive
and Financial Officer, and a Director
Hui Ping Cheng has served as our President, Chief Executive and Financial
Officer and as a director of our company since November 1, 2007. She previously
served as a senior accountant and accounting department director at Shenzhen Yi
Zhi Pharmaceutical Company Limited from September 1998 until April 2007, where
she managed and oversaw the company's accounting department. Since April 2007,
she has served as director and president of Max Time Enterprise Limited, which
positions she continues to hold. She also is a director and President of
Sunnyside Acres Mobile Estates, a "shell company" since November 1, 2007.
All directors hold office until the next annual meeting of stockholders or
until their successors have been elected and qualified, or their earlier death,
resignation or removal. All officers are appointed annually by the board of
directors and, subject to any existing employment agreement, serve at the
discretion of the board. Currently, directors receive no compensation.
We do not have audit, nominating or compensation committees. We have only
one director who also is our President, and therefore is not "independent"
within the meaning of Rule 10A-3 under the Exchange Act. We intend to initiate a
search of suitable candidates to expand the size of, and include "independent"
individuals on, our Board and adopt an ethics policy. At this time, given our
limited activities and since our common stock is quoted on the OTC Bulletin
Board, the Board has no plans or need to establish an audit committee with a
financial expert or a compensation committee to determine guidelines for
determining the compensation of its executive officers or directors, who
currently serve without compensation. For similar reasons, we have not adopted a
written policy for considering recommendations from shareholders for candidates
to serve as directors or with respect to communications from shareholders. We
are seeking independent board members. We have not been successful in retaining
independent board members to form an audit committee.
Hui Ping Cheng, our sole director, does not satisfy the criteria of an
"Audit Committee Financial Expert."
Compensation of Directors
During the fiscal year ended December 31, 2007, we did not pay or accrue
any amounts as compensation for any individual serving as a member of our Board
of Directors, and none of our directors earned any fees for serving as a member
of our Board of Directors.
18
DIRECTOR COMPENSATION
- --------------------------------------------------------------------------------------------------------------
Name Fees Stock Option Non-Equity Non-Qualified All Total
(a) Earned Awards Awards Incentive Deferred Other ($)
or Paid ($) ($) Plan Compensation Compensation (j)
in Cash (c) (d) Compensation Earnings ($)
($) ($) ($) (g)
(b) (e) (f)
- --------------------------------------------------------------------------------------------------------------
Hui Peng None None None None None None None
Cheng (1)
- --------------------------------------------------------------------------------------------------------------
Amy Hadley (2) None None None None None None None
- --------------------------------------------------------------------------------------------------------------
Stuart Curtis None None None None None None None
Nilson (3)
- --------------------------------------------------------------------------------------------------------------
Felicia May None None None None None None None
Nilson (3)
- --------------------------------------------------------------------------------------------------------------
- ----------
(1) Ms. Cheng was appointed a director November 7, 2007.
(2) Ms. Hadley resigned from the Board of Directors effective November 19,
2007.
(3) Mr. and Ms. Nilson resigned from the Board of Directors effective November
7, 2007.
Conflicts of Interest
Hui Ping Cheng, our sole director and officer, is associated with other
firms involved in a range of business activities. Consequently, there are
potential inherent conflicts of interest in her acting as an officer and
director of our company. Insofar as Hui Ping Cheng is engaged in other business
activities, we anticipate that she will devote only a minor amount of time to
our affairs.
Our officers and directors are now and may in the future become
shareholders, officers or directors of other companies which may be engaged in
business activities similar to those conducted by us. Accordingly, additional
direct conflicts of interest may arise in the future with respect to such
individuals acting on our behalf or other entities. Moreover, additional
conflicts of interest may arise with respect to opportunities which come to the
attention of such individuals in the performance of their duties or otherwise.
We do not currently have a right of first refusal pertaining to opportunities
that come to management's attention insofar as such opportunities may relate to
our proposed business operations.
Our officers and directors are, so long as they are officers or directors
of our company, subject to the restriction that all opportunities contemplated
by our plan of operations which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available us and the companies that they are
affiliated with on an equal basis. A breach of this requirement will be a breach
of the fiduciary duties of the officer or director.
We have not adopted any other conflict of interest policy with respect to
such transactions.
19
Code of Ethics
We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer and persons
performing similar functions. For purposes of this Item, the term code of ethics
means written standards that are reasonably designed to deter wrongdoing and to
promote:
- - honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
- - full, fair, accurate, timely, and understandable disclosure in reports and
documents that the issuer files with, or submits to, the SEC and in other public
communications made by the issuer;
- - compliance with applicable governmental laws, rules and regulations;
- - the prompt internal reporting of violations of the code to the board of
directors or another appropriate person or persons; and
- - accountability for adherence to the code.
We hereby undertake to provide to any person without charge, upon request, a
copy of our code of ethics. Requests may be made in writing to our board of
directors at our executive offices.
Compliance with Section 16(a) of the Exchange Act
Section 16 of the Securities Exchange Act requires our directors and
executive officers and persons who own more than 10% of a registered class of
our equity securities to file various reports with the Securities and Exchange
Commission concerning their holdings of, and transactions in, our securities.
Copies of these filings must be furnished to us.
Based on a review of the copies of such forms furnished to us and written
representations from our executive officers and directors, we believe that
during 2007 all of our officers, directors and greater than 10% stockholders
complied with all applicable Section 16(a) filing requirements.
ITEM 11. Executive Compensation
Hui Ping Cheng has been our President, Chief Executive and Financial
Officer and a Director since November 7, 2007. Prior to that date, Amy Hadley
had served as our chief executive officer.
Since inception, we have not paid or accrued any compensation for our
chief executive officer or any other executive officer and we have not entered
into an employment or consulting agreement with any of our directors or
executive officers. We have not granted any equity-based compensation, awards or
stock options to our chief executive officer or any other executive officer. We
do not have any retirement, pension, profit sharing or stock option plans or
insurance or medical reimbursement plans covering our officers and directors. No
value has been assigned to any of the services performed by our officers
(employees) and no compensation will be awarded to, earned by, or paid to these
officers.
We have not granted any equity-based compensation, awards or stock options
to our chief executive officer or any other executive officer.
Summary Compensation
The following table sets forth information concerning the compensation paid or
earned for the periods indicated for services rendered to our company in all
capacities by Hui Ping Cheng, our CEO, President, Chief Financial Officer since
November 7, 2007, and prior to that date by her predecessor, Brian Pierson.
20
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Year Salary Bonus Stock Option Non-Equity Nonqualified All Other Total
principal (b) (c) ($) Awards Awards Incentive Plan Deferred Compensation (j)
position (d) ($) ($) Compensation Compensation ($)
(a) (e) (f) ($) Earnings (i)
(g) ($)
(h)
- -----------------------------------------------------------------------------------------------------------------------------------
Hui Ping Cheng
President, 2007(1) None None None None None None None None
CEO, CFO
and Director
- -----------------------------------------------------------------------------------------------------------------------------------
Amy Hadley 2007(2) None None None None None None None None
CEO, President 2006 None None None None None None None None
and Director
- -----------------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Ms. Cheng was appointed our CEO, President and CFO on November 7, 2007.
(2) Ms. Hadley resigned as our CEO and President on November 7, 2007.
Outstanding Equity Awards
Neither Ms. Cheng nor Ms. Hadley received any equity awards during 2007 or
held any outstanding options to purchase shares of our common stock as of
December 31, 2007.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Change in Control
On November 7, 2007, Max Time Enterprise Ltd., or MTE, purchased from Amy
Hadley, Stuart Curtis Nilson and Felicia May Nilson an aggregate of 1,000,000
shares of our outstanding common stock, for a total purchase price of $400,000.
The purchased shares constituted, in the aggregate, approximately 13.34% of the
issued and outstanding shares of our common stock, resulting in a change in the
controlling interest of our company. Prior to the this transaction, Amy Hadley,
Stuart Curtis Nilson and Felicia May Nilson held an aggregate of 1,000,000
shares of the Company's common stock, representing collectively approximately
13.34% of the Company's issued and outstanding shares of common stock. The
source of the funds with which Purchaser purchased such shares was working
capital.
On November 7, 2007, Ms. Cheng was appointed as a director and the
President of our company.
Securities Ownership
The following table sets forth, as of March 28, 2008, the number of shares
of our common stock beneficially owned by (i) each person or entity known to us
to be the beneficial owner of more than 5% of the outstanding common stock; (ii)
each officer and director of our company, and (iii) all officers and directors
as a group. Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information furnished by
each person using "beneficial ownership" concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
21
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest. Each beneficial owner's percentage ownership
is determined by assuming that options or warrants that are held by such person
(but not those held by any other person) and which are exercisable within 60
days from the date of this report have been exercised. Except as noted below,
each person has sole voting and investment power. As of March 28, 2007, we had
outstanding 7,500,000 shares of common stock. Except as otherwise stated in the
table below, the address of each person listed is c/o Domain Registration,
Corp., Shennan Zhong Road, PO Box 031-088, Shenzhen, China 518000.
Amount and Nature of
Name and Address Beneficial Ownership Percent
- ---------------- -------------------- -------
Hui Ping Cheng (1) 1,000,000 13.34%
Executive Officers and
Directors as a Group (one
person) 1,000,000 13.34%
- ----------
(1) Hui Ping Cheng is the indirect owner of 1,000,000 shares of the our common
stock by reason of her control of Max Time Enterprises Limited., a company
in which she serves as President and owns a majority of its issued and
outstanding shares of common stock.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information about the common stock
available for issuance under compensatory plans and arrangements as of December
31, 2007.
(c)
Number of securities
(a) remaining available
Number of (b) for future issuance
securities to be Weighted-average under equity
issued upon exercise price of compensation
exercise of outstanding options plans (excluding
outstanding under equity securities reflected in
Plan Category options compensation plans column (a))
- ------------------------------------------------------------------------------------------------------
Equity compensation
plan approved by
security holders None -- None
Equity compensation
plans not approved by
security holders None -- None
Total None -- None
22
ITEM 13. Certain Relationships and Related Transactions; Director Independence
Transactions with Related Persons
On November 7, 2007, Max Time Enterprises Ltd., or MTE, and Amy Hadley,
Stuart Curtis Nilson and Felicia May Nilson consummated MTE's purchase of an
aggregate of 1,000,000 shares of our common stock, constituting 13.34% of our
then issued and outstanding common stock, for a total purchase price of
$400,000, in accordance with the terms and conditions of that certain Stock
Purchase Agreement, dated as of November 7, 2007, by and among MTE and Amy
Hadley, Stuart Curtis Nilson and Felicia May Nilson. Hui Ping Cheng is an
indirect owner of the 1,000,000 shares of our common stock held by MTE by reason
of her control of MTE, of which entity she is the sole owner, director and
officer. On November 7, 2007, Ms. Cheng was appointed as a director and the
President of our company.
Immediately prior to the closing of the transaction, Stuart Curtis Nilson
and Felicia May Nilson resigned from all of their positions as directors and
officers of our company effective immediately. At the closing of transaction,
Amy Hadley resigned as an officer of our company effective immediately and as a
director of our company effective at the expiration of the statutory ten (10)
day waiting period following the filing by us with the SEC of an Information
Statement pursuant to Rule 14f-1 promulgated under the Exchange Act, relating to
the change in control of the Board occasioned by the resignations of Amy Hadley,
Stuart Curtis Nilson and Felicia May Nilson from the Board of Directors (the
"Rule 14f-1 Information Statement"). Prior to submitting their resignations, Amy
Hadley, Stuart Curtis Nilson and Felicia May Nilson appointed Hui Ping Cheng,
president of MTE, to the Board of Directors in accordance with our By-Laws,
effective upon the closing of the transaction and subject to the expiration of
the statutory ten (10) day waiting period following the filing by us with the
SEC of the Rule 14f-1 Information Statement.
Director Independence
Hui Ping Cheng, our President, Chief Executive and Financial Officer, is
our sole director, and therefore is not "independent", as that term is defined
by Rule 10A-3 under the Exchange Act.
Item 14. Exhibits, Financial Statement Schedules
(a) For a list of the financial statements filed with this Report see Item 8.
See (c) below for a list of financial statement schedules included in this
Report. See (b) below for a list of exhibits required to be filed with this
Report.
Exhibit No. Description
- ----------- -----------
3.1 Articles of Incorporation, as amended (filed as an exhibit to
our Form 10SB12G, filed on March 3, 1999).
3.2 Bylaws (filed as an exhibit to our Form 10SB12G, filed with on
March 3, 1999).
3.3 Articles and Plan of Merger of Bahamas Enterprises. Inc. into
Suzy-Path, Corp. (filed as an exhibit to our Form 8K12G3, filed
on October 11, 2000).
3.4 Articles and Plan of Merger of Suzy-Path, Corp. into Domain
Registration, Corp. (filed as an exhibit to our Form 8K12G3,
filed with the Securities and Exchange Commission on October 11,
2000).
31.1 Certification by Principal Executive and Financial Officer
pursuant to Rule 13a-14 and Rule 15d-14 of the Securities
Exchange Act of 1934
32.1 Certification by Principal Executive and Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
USC 1350)
23
(c) Financial statement schedules: None
ITEM 15. Principal Accountant Fees and Services
The following is a summary of the fees billed to us by Moore & Associates,
Charter, for professional services rendered for the fiscal years ended December
31, 2007 and by Kyle L. Tingle, CPA, LLC for 2006, respectively:
Fiscal year ended December 31,
2007 2006
---------- ----------
Audit Fees $ 3,500 $ 1,650
Audit Related Fees $ 0 $ 0
Tax Fees $ 0 $ 150
All Other Fees $ 0 $ 0
Audit Fees. Consists of fees billed for professional services rendered for
the audit of our consolidated financial statements and review of interim
consolidated financial statements included in quarterly reports and services
that are normally provided in connection with statutory and regulatory filings
or engagements.
Audit Related Fees. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of our consolidated financial statements and are not reported under "Audit
Fees".
Tax Fees. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include preparation of
federal and state income tax returns.
All Other Fees. Consists of fees for product and services other than the
services reported above.
Policy on audit committee pre-approval of audit and permissible non-audit
services of independent auditors
Audit Committee's Pre-Approval Policies
Our Board of Directors' policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit related services, tax services, and other
services. Pre-approval is generally provided for up to one year, and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent auditors and
management are required to periodically report to the Board of Directors
regarding the extent of services provided by the independent auditors in
accordance with this pre-approval and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.
Our Board of Directors has reviewed and discussed with Moore & Associates,
Charter, our audited financial statements contained in our Annual Report on Form
10-K for the 2007 fiscal year. The Board of Directors also has discussed with
Moore & Associates, Charter, the matters required to be discussed pursuant to
SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380),
which includes, among other items, matters related to the conduct of the audit
of our financial statements.
24
The Board of Directors has received and reviewed the written disclosures and the
letter from Moore & Associates, Charter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and has
discussed with Moore & Associates, Charter, its independence from our company.
The Audit Committee has considered whether the provision of services other than
audit services is compatible with maintaining auditor independence.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the our Annual Report on Form 10-K for our 2007 fiscal year for
filing with the SEC.
25
DOMAIN REGISTRATION, CORP.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
DECEMBER 31, 2007
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONTENTS
Balance Sheets F-3
Statements of Operations F-4
Statement of Stockholders' Deficit F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7-13
F-1
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Domain Registration Corp
(A Development Stage Company)
We have audited the accompanying balance sheet of Domain Registration Corp (A
Development Stage Company) as of December 31, 2007, and the related statements
of operations, stockholders' equity and cash flows for the year ended December
31, 2007 and inception July 10, 1996 through December 31, 2007. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of Domain Registration Corp. as of December
31, 2006 were audited by other auditors whose report dated January 22, 2007,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Domain Registration Corp (A
Development Stage Company) as of December 31, 2007, and the related statements
of operations, stockholders' equity and cash flows for the year ended December
31, 2007 and inception July 10, 1996 through December 31, 2007, in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has does not have cash or any material assets,
nor does it have operations or a source of revenue sufficient to cover its
operation costs, which raises substantial doubt about its ability to continue as
a going concern. Management's plans concerning these matters are also described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates Chartered
Las Vegas, Nevada
March 31, 2008
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-2
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
As of December 31,
-------------------------
2007 2006
--------- ---------
ASSETS
CURRENT ASSETS
Total Current Assets $ -- $ --
--------- ---------
Total Assets $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 12,355 $ 12,355
Officer advances -- 76,550
--------- ---------
Total Current Liabilities 12,355 88,905
--------- ---------
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 50,000,000 shares authorized,
7,500,000 shares issued and outstanding at December 31, 2007 and 2006 7,500 4,100
Additional paid-in capital 80,568 --
Accumulated deficit during development stage (100,423) (93,005)
--------- ---------
Total Stockholders' Deficit (12,355) (88,905)
--------- ---------
Total Liabilities and Stockholders' Deficit $ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements
F-3
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
July 10, 1996
(inception) to
Year Ended December 31, December 31,
----------------------------- -----------
2007 2006 2007
----------- ----------- -----------
Revenues $ -- $ -- $ 44
Cost of revenue -- -- --
----------- ----------- -----------
Gross profit -- -- 44
General, selling and administrative expenses 7,418 6,775 100,467
----------- ----------- -----------
Operating (loss) (7,418) (6,775) (100,423)
----------- ----------- -----------
Nonoperating income (expense) -- -- --
----------- ----------- -----------
(Loss) before income taxes (7,418) (6,775) (100,423)
Income taxes -- -- --
----------- ----------- -----------
Net (loss) $ (7,418) $ (6,775) $ (100,423)
=========== =========== ===========
Net (loss) per share, basic and diluted $ -- $ --
=========== ===========
Weighted average common shares outstanding,
basic and diluted 7,500,000 7,500,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-4
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' DEFICIT
Accumulated
(Deficit)
Common Stock Additional During
------------------------ Paid-in Development
Shares Amount Capital Stage Total
--------- --------- --------- --------- ---------
Sale of stock, July 10, 1996 5,500,000 $ 2,100 $ -- $ -- $ 2,100
Net loss, December 31, 1996 -- -- -- (2,100) (2,100)
--------- --------- --------- --------- ---------
Balance, December 31, 1996 5,500,000 2,100 -- (2,100) --
Net loss, December 31, 1997 -- -- -- -- --
--------- --------- --------- --------- ---------
Balance, December 31, 1997 5,500,000 2,100 -- (2,100) --
Net loss, December 31, 1998 -- -- -- -- --
--------- --------- --------- --------- ---------
Balance, December 31, 1998 5,500,000 2,100 -- (2,100) --
February 2, 1999, changed
from no par value to $.001 -- (2,079) 2,079 -- --
February 2, 1999, forward
stock split 100:1 -- 2,079 (2,079) -- --
Net loss, December 31, 1999 -- -- -- (15,244) (15,244)
--------- --------- --------- --------- ---------
Balance, December 31, 1999 5,500,000 2,100 -- (17,344) (15,244)
Net loss, December 31, 2000 -- -- -- (7,213) (7,213)
--------- --------- --------- --------- ---------
Balance, December 31, 2000 5,500,000 2,100 -- (24,557) (22,457)
Issuance of stock in merger
with Suzy-Path Corp. 2,000,000 2,000 -- -- 2,000
Net loss December 31, 2001 -- -- -- (15,278) (15,278)
--------- --------- --------- --------- ---------
Balance, December 31, 2001 7,500,000 4,100 -- (39,835) (35,735)
Net loss December 31, 2002 -- -- -- (11,408) (11,408)
--------- --------- --------- --------- ---------
Balance, December 31, 2002 7,500,000 4,100 -- (51,243) (47,143)
Net loss December 31, 2003 -- -- -- (10,872) (10,872)
--------- --------- --------- --------- ---------
Balance, December 31, 2003 7,500,000 4,100 -- (62,115) (58,015)
Net loss, December 31, 2004 -- -- -- (13,943) (13,943)
--------- --------- --------- --------- ---------
Balance, December 31, 2004 7,500,000 4,100 -- (76,058) (71,958)
Net loss, December 31, 2005 -- -- -- (10,172) (10,172)
--------- --------- --------- --------- ---------
Balance, December 31, 2005 7,500,000 4,100 -- (86,230) (82,130)
Net loss, December 31, 2006 -- -- -- (6,775) (6,775)
--------- --------- --------- --------- ---------
Balance, December 31, 2006 7,500,000 4,100 -- (93,005) (88,905)
Capital contribution from
officer advances 3,400 80,568 -- 83,968
Net loss, December 31, 2007 -- -- -- (7,418) (7,418)
--------- --------- --------- --------- ---------
Balance, December 31, 2007 7,500,000 7,500 80,568 (100,423) (12,355)
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-5
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
July 10, 1996
(inception) to
Year Ended December 31, December 31,
------------------------- --------------
2007 2006 2007
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (7,418) $ (6,775) $(100,423)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Changes in operating assets and liabilities:
Increase (decrease) in prepaid expense -- 3,150 --
Increase (decrease) in accounts payable -- (1,100) 12,355
--------- --------- ---------
Net cash provided by (used in) operating activities (7,418) (4,725) (88,068)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock -- -- 7,500
Proceeds from capital contribution 7,418 80,568
Increase (decrease) in officer advances -- 4,725 --
--------- --------- ---------
Net cash provided by (used in) financing activities 7,418 4,725 88,068
--------- --------- ---------
Net increase (decrease) in cash -- -- --
Cash, beginning of period -- -- --
--------- --------- ---------
Cash, end of period $ -- $ -- $ --
========= ========= =========
SUPPLEMENTAL DISCLOSURES:
Interest payments $ -- $ -- $ --
========= ========= =========
Income tax payments $ -- $ -- $ --
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital contribution from prior period officer advances $ 76,550 $ -- $ --
The accompanying notes are an integral part of these financial statements.
F-6
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - NATURE OF THE BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS:
Domain Registration, Corp. ("Company") was organized on July 31, 2001 under the
laws of the State of Nevada. Bahamas Enterprises, Inc., the accounting
predecessor to the Company was organized under the laws of the State of Nevada
on July 10, 1996. The Company currently has limited operations and, in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7,
"ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE ENTERPRISES," is considered a
Development Stage Enterprise.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of December 31, 2007 and December 31, 2006.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES." A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment.
REVENUE RECOGNITION
Revenues are recognized as incurred. Anticipated revenues will be from the
registration of domain names through the website domain registration agreement
with Verio, Inc. As of December 31, 2007, the Company had one registered domain
name through the websites in 2004. Cost of sales is the monthly cost of web
hosting through Verio, Inc. Since the Company has no significant recorded
revenues from registration of domain names, the cost of the websites have been
reclassified as operating expenses.
F-7
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is,
Gross versus Net Presentation)" ("EITF 06-3"). EITF 06-3 provides that the
presentation of taxes assessed by a governmental authority that is directly
imposed on a revenue-producing transaction between a seller and a customer on
either a gross basis (included in revenues and costs) or on a net basis
(excluded from revenues) is an accounting policy decision that should be
disclosed. The provisions of EITF 06-3 will be effective for us as of January 1,
2007. We do not expect that the adoption of EITF 06-3 will have a material
impact on our consolidated financial statements.
In September 2006, the SEC Staff issued SEC Staff Accounting Bulletin 107,
"Implementation Guidance for FASB 123 (R)." The staff believes the guidance in
the SAB will assist issuers in their initial implementation of Statement 123R
and enhance the information received by investors and other users of financial
statements, thereby assisting them in making investment and other decisions.
This SAB includes interpretive guidance related to share-based payment
transactions with non-employees, the transition from nonpublic to public entity
status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financials instruments
issued under share-based payment arrangements, the classification of
compensation expense, non-GAAP financial measures, first-time adoption of
Statement 123R in an interim period, capitalization of compensation cost related
to share-based payment arrangements, the accounting for income tax effects of
share-based payment arrangements upon adoption of Statement 123R and disclosures
of MD&A subsequent to adoption of Statement 123R.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and will be adopted by the Company in the first quarter of fiscal year
2009. We do not expect that the adoption of SFAS 157 will have a material impact
on our financial condition or results of operations.
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans" ("SFAS No. 158"). SFAS
No. 158 requires companies to recognize in their statement of financial position
an asset for a plan's overfunded status or a liability for a plan's underfunded
status and to measure a plan's assets and its obligations that determine its
funded status as of the end of the company's fiscal year. Additionally, SFAS No.
158 requires companies to recognize changes in the funded status of a defined
benefit postretirement plan in the year that the changes occur and those changes
will be reported in comprehensive income. The provision of SFAS No. 158 that
will require us to recognize the funded status of our postretirement plans, and
the disclosure requirements, will be effective for us as of December 31, 2006.
We do not expect that the adoption of SFAS No. 158 will have a material impact
on our consolidated financial statements.
F-8
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities." SFAS 159 permits entities to choose
to measure many financial instruments, and certain other items, at fair value.
SFAS 159 applies to reporting periods beginning after November 15, 2007. The
adoption of SFAS 159 is not expected to have a material impact on our financial
condition or results of operations.
GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have cash or any material
assets, nor does it have operations or a source of revenue sufficient to cover
its operation costs and allow it to continue as a going concern. The Company
will be dependent upon the raising of additional capital through placement of
our common stock in order to implement its business plan, or merge with an
operating company. There can be no assurance that the Company will be successful
in either situation in order to continue as a going concern. The officers and
directors have committed to advancing certain operating costs of the Company.
NOTE 2 - STOCKHOLDERS' EQUITY
COMMON STOCK
The authorized common stock of the accounting predecessor to the Company
consisted of 25,000,000 shares with par value of $0.001. On July 30, 1996, the
accounting predecessor to the Company authorized and issued 21,000 shares of its
no par value common stock in consideration of $2,100 in cash.
On February 2, 1999, the State of Nevada approved Bahamas Enterprises, Inc.'s
restated Articles of Incorporation, which increased its capitalization from
25,000 common shares to 25,000,000 common shares. The no par value was changed
to $0.001 per share. On February 2, 1999, Bahamas Enterprises, Inc.'s
shareholders approved a forward split of its common stock at one hundred shares
for one share of the existing shares. The number of common stock shares
outstanding increased from 21,000 to 2,100,000. Prior period information has
been restated to reflect the stock split
Through the merger with Suzy-Path, Corp. as described in Note 6 to the financial
statements, the accounting predecessor to the Company issued 2,000,000 shares of
common stock for each share outstanding of Suzy-Path, Corp. resulting in
4,100,000 shares outstanding.
Based upon Rule 12g-3(a) of the rules promulgated under the Securities Exchange
Act of 1934, as amended, Domain Registration, Corp. became the surviving entity
for reporting purposes to the Securities and Exchange Commission. Based upon the
terms of the merger agreement, the 4,100,000 issued and outstanding shares of
Suzy-Path, Corp. were automatically converted to the same number of shares in
Domain Registration, Corp. Each of the shareholders of Suzy-Path, Corp.
exchanged his or her stock for the stock of the Company.
Domain Registration, Corp. was organized July 31, 2001 under the laws of the
State of Nevada. The Company authorized 50,000,000 shares of common stock.
F-9
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 2 - STOCKHOLDERS' EQUITY (CONTINUED)
On September 27, 2007, the Company's shareholders approved a stock dividend that
is being treated as a stock split of its common stock. The dividend will be nine
shares for each share of the outstanding shares at October 10, 2007. No
fractional shares will be issued. The number of common stock shares outstanding
increased from 4,100,000 to 41,000,000. Prior to November 1, 2007, the
shareholders had surrendered to the Company for cancellation an aggregate of
33,500,000 shares of common stock, resulting in 7,500,000 shares outstanding.
All share and per share information has been retroactively adjusted to reflect
the stock split and subsequent stock cancellation.
The Company has not authorized any preferred stock.
NET LOSS PER COMMON SHARE
Net loss per share is calculated in accordance with SFAS No. 128, "EARNINGS PER
SHARE." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. The calculation of diluted net
loss per share gives effect to common stock equivalents, however, potential
common shares are excluded if their effect is antidilutive.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 7,500,000 for December 31, 2007 and
December 31, 2006. As of December 31, 2007 and since inception, the Company had
no dilutive potential common shares.
NOTE 3 - INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. We provided a full valuation allowance on the net
deferred tax asset, consisting of net operating loss carryforwards, because
management has determined that it is more likely than not that we will not earn
income sufficient to realize the deferred tax assets during the carryforward
period.
The components of the Company's deferred tax asset as of December 31, 2006 and
2005 are as follows:
2007 2006
-------- --------
Net operating loss carryforward $ 34,144 $ 31,622
Valuation allowance (34,144) (31,622)
-------- --------
Net deferred tax asset $ -- $ --
======== ========
F-10
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 3 - INCOME TAXES (CONTINUED)
A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
2007 2006 Since Inception
-------- -------- ---------------
Tax at statutory rate (34%) $ -- $ -- $ --
Increase in deferred tax assets (2,522) (2,304) (34,144)
Increase in valuation allowance 2,522 2,304 34,144
-------- -------- --------
Income tax expenses $ -- $ -- $ --
======== ======== ========
The net federal operating loss carry forward will expire between 2016 and 2026.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
In connection with the acquisition of Suzy-Path, Corp. and Domain Registration,
Corp., the Company acquired certain federal net operating loss carryforwards of
$3,429. If, in the future, the realization of these acquired deferred tax assets
becomes more likely than not, any reduction in the associated valuation
allowance will be allocated to reduce purchased intangibles.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company does not own or lease any real or personal property. The resident
agent for the corporation provides office services without charge, as an
accommodation to the officers and directors. Such costs are immaterial to the
financial statements and accordingly, have not been reflected therein. The
officers and directors for the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interest. The
Company has not formulated a policy for the resolution of such conflicts.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
NOTE 6 - BUSINESS COMBINATIONS
MERGER BETWEEN SUZY-PATH, CORP. AND BAHAMAS ENTERPRISES, INC.
Bahamas Enterprises, Inc. is a reporting company to the Security and Exchange
Commission under the Securities Exchange Act of 1934, as amended. Suzy-Path,
Corp. owned a domain name and maintained a web site for customers to register
domain names and the referral of web hosting services through a contact with
Verio, Inc.
F-11
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 6 - BUSINESS COMBINATIONS (CONTINUED)
Transactions pursuant to SFAS No. 141, "BUSINESS COMBINATIONS," require the
acquisition of a business entity. Bahamas Enterprises, Inc. was a non-operating
public shell corporation, and therefore, not a business. For reporting purposes,
the transaction is treated as a capital transaction where the acquiring
corporation issued stock for the net monetary assets of the shell corporation,
accompanied by a recapitalization. The accounting is similar in form to a
reverse acquisition, except that goodwill or other intangibles are not recorded.
The combination was recorded as follows:
Suzy-Path Corp. Bahamas Enterprises Merged Companies
Cash $ 1,376 $ -- $ 1,376
Prepaid assets 13,050 -- 13,050
Investment in subsidiary 15,000 -- 15,000
-------- -------- --------
Total Assets 29,426 -- 29,426
======== ======== ========
Officer payable 15,000 26,588 41,588
Accounts payable 13,500 1,599 15,099
-------- -------- --------
Total Liabilities 28,500 28,187 56,687
======== ======== ========
Common Stock 2,000 2,100 4,100
Accumulated deficit (1,074) (30,287) (31,361)
-------- -------- --------
Shareholders' equity (deficit) $ 926 $(28,187) $(27,261)
======== ======== ========
MERGER BETWEEN DOMAIN REGISTRATION, CORP. AND SUZY-PATH, CORP.
Domain Registration, Corp. was a wholly-owned subsidiary of Suzy-Path, Corp. It
also owned domain names and maintained a web site for customers to register
domain names through a contact with Verio, Inc. The merger resulted in the
direct acquisition of the assets comprising a going business.
Suzy-Path, Corp and Domain Registration reported on a consolidated basis. Domain
Registration, Corp. issued one share of Domain Registration, Corp. stock for
each share of stock in Suzy-Path, Corp. The purpose of the transaction was to
acquire the assets of Suzy-Path, Corp. Domain Registration, Corp. then cancelled
the sole share of ownership held by Suzy-Path, Corp. Domain Registration, Corp.
has elected to be the surviving entity for reporting purposes.
SFAS No. 141, "BUSINESS COMBINATIONS," does not apply to the transaction as both
entities were under common control. In accordance with APB No. 16, "BUSINESS
COMBINATIONS," the merger was treated as an exchange of equity of entities under
common control where the merged financial statements of Domain Registration,
Corp. were the consolidated financial statements of Suzy-Path, Corp. and
subsidiaries; these financial statements are included with Domain Registration,
Corp.'s as if the transaction had occurred at the beginning of the reporting
period.
F-12
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 7 - OFFICER ADVANCES
The Company has incurred costs while seeking additional capital through a merger
with an existing company. An officer of the Company has advanced funds on behalf
of the Company to pay for these costs and other de minims operating costs the
Company may have incurred. These funds have been advanced interest free.
On November 7, 2007, the Company's shareholder officers sold to Max Time
Enterprises Ltd. ("MTE") a total of 1,000,000 shares of the common stock, $.001
par value, of the Company, constituting 13.34% of the shares of the Company then
issued and outstanding (the "Stock Transaction") which resulted in a change in
control of the Company. As a result of the Stock Transaction which changed the
Company's controlling person to MTE, the officer forgave the indebtedness owed
to her by the Company. The balance of the officer advances was adjusted to
common stock and additional paid-in capital as the officer's capital
contribution to the Company.
F-13
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: April 11, 2008 Domain Registration, Corp.
/s/ Hui Ping Cheng
---------------------------------------------
By: Hui Ping Cheng
President, Chief Executive Officer and Chief
Financial Officer (Principal Executive and
Financial Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on
April 11, 2008.
Signature Title
/s/ Hui Ping Cheng President, Chief Executive Officer, Chief Financial
- ------------------ Officer, and a Director (Principal Executive and
Hui Ping Cheng Financial Officer)