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, 2008
|_| 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 30, 2008, 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 trading in the common stock is limited and quotations
sporadic, it is impracticable to ascertain the aggregate market value of those
shares as of that date.
As of April 13, 2009, the registrant had outstanding 7,500,000 shares of common
stock.
DOCUMENTS INCORPORATED BY REFERENCE: None
Table of Contents
Page
PART I
Item 1. Business 1
Item 1A. Risk Factors 3
Item 2. Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities 4
Item 6. Selected Financial and Other Data 4
Item 7. Management's Discussion and Analysis of Financial Condition and 4
Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 8
Item 8. Financial Statements and Supplementary Data 8
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure 8
Item 9A. Controls and Procedures 8
Item 9B. Other Information 9
PART III
Item 10. Directors, Executive Officers and Corporate Governance 9
Item 11. Executive Compensation 10
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 11
Item 13. Certain Relationships and Related Transactions, and Director Independence 11
Item 14. Exhibits, Financial Statement Schedules 13
PART IV
Item 15. Principal Accountant Fees and Services 14
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.
PART I
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.
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.
1
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.
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.
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.
2
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 may require financing to acquire businesses and to 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 $(168,168) through December 31, 2008. In addition, we had
a working capital deficit of $(80,100) at December 31, 2008. 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.
sWe 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.
3
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.
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
retain our senior management upon whom we will rely to obtain capital required
to implement our business plan and for identifying, investigating, negotiating
and integrating potential acquisition candidates and 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.
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 other 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 one of the NASDAQ Stock Exchanges or other 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 one of the
NASDAQ Stock Markets or other national securities exchange and as a result
adversely affect the liquidity of our common stock.
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.
ITEM 2. Properties
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.
4
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, 2008.
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 14, 2009, 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, 2008.
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, 2008.
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, 2008. We had a
cumulative net loss from inception through December 31, 2007 of $(100,423) and a
cumulative net loss from inception through December 30, 2008 of $(168,168). 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
5
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.
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 2009, 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, 2008, we had no assets and total liabilities of $80,100 and
we had a negative net worth of $(80,100). 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).
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.
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.
6
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.
Recent Accounting Pronouncements
In February 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115" (hereinafter "SFAS No. 159"). This statement 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, although earlier adoption is permitted. Management has not determined
the effect that adopting this statement would have on the Company's financial
condition or results of operations.
In December 2007, the FASB issued SFAS 141(R), "Business Combinations--a
replacement of FASB Statement No. 141." This Statement replaces SFAS 141,
"Business Combinations," and requires an acquirer to recognize the assets
acquired, the liabilities assumed, including those arising from contractual
contingencies, any contingent consideration, and any non-controlling interest in
the acquiree at the acquisition date, measured at their fair values as of that
date, with limited exceptions specified in the statement. SFAS 141(R) also
requires the acquirer in a business combination achieved in stages (sometimes
referred to as a step acquisition) to recognize the identifiable assets and
liabilities, as well as the non-controlling interest in the acquiree, at the
full amounts of their fair values (or other amounts determined in accordance
with SFAS 141(R)). In addition, SFAS 141(R)'s requirement to measure the
non-controlling interest in the acquiree at fair value will result in
recognizing the goodwill attributable to the non-controlling interest in
addition to that attributable to the acquirer. SFAS 141(R) amends SFAS No. 109,
"Accounting for Income Taxes," to require the acquirer to recognize changes in
the amount of its deferred tax benefits that are recognizable because of a
business combination either in income from continuing operations in the period
of the combination or directly in contributed capital, depending on the
circumstances. It also amends SFAS 142, "Goodwill and Other Intangible Assets,"
to, among other things, provide guidance on the impairment testing of acquired
research and development intangible assets and assets that the acquirer intends
not to use. SFAS 141(R)applies prospectively to business combinations for which
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. We are currently assessing the
potential impact that the adoption of SFAS 141(R) could have on our financial
statements.
In December 2007, the FASB issued SFAS 160, "Non-controlling Interests in
Consolidated Financial Statements." SFAS 160 amends Accounting Research Bulletin
51, "Consolidated Financial Statements," to establish accounting and reporting
standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. It also clarifies that a non-controlling
interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements. SFAS
160 also changes the way the consolidated income statement is presented by
requiring consolidated net income to be reported at amounts that include the
amounts attributable to both the parent and the non-controlling interest. It
also requires disclosure, on the face of the consolidated statement of income,
of the amounts of consolidated net income attributable to the parent and to the
non-controlling interest. SFAS 160 requires that a parent recognize a gain or
loss in net income when a subsidiary is deconsolidated and requires expanded
disclosures in the consolidated financial statements that clearly identify and
distinguish between the interests of the parent owners and the interests of the
non-controlling owners of a subsidiary. SFAS 160 is effective for fiscal
periods, and interim periods within those fiscal years, beginning on or after
December 15, 2008. We are currently assessing the potential impact that the
adoption of SFAS 141(R) could have on our financial statements.
In March of 2008 the Financial Accounting Standards Board (FASB) issued SFAS No.
161, "Disclosures about Derivative Instruments and Hedging Activities--an
amendment of FASB Statement No. 133, "Accounting for Derivatives and Hedging
Activities." SFAS No. 161 has the same scope as Statement No. 133 but requires
enhanced disclosures about (a) how
7
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under Statement No. 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity's financial position, financial performance, and cash
flows. SFAS No. 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged. The statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption. SFAS No. 161
has no effect on the Company's financial position, statements of operations, or
cash flows at this time.
In May 2008, FASB issued Financial Accounting Standards No. 162, "The Hierarchy
of Generally Accepted Accounting Principles." This Statement identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States (the GAAP hierarchy). This Statement is
effective 60 days following the SEC's approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles. This pronouncement has
no effect on this Company's financial reporting at this time.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to small reporting companies.
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
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 was 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, 2008. 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, 2008. 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
8
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, 2008 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
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
- --------------------------------------------------------------------------------
Chunhua Yang 41 Chairman, President, Chief Executive
and Financial Officer, and a Director
Chunhua Yang has served as a director and President, Chief Executive
Officer and Chief Financial Officer of the Company since January 23, 2009.
Chunhua Yang has been a director and chief executive officer of MAX TIME
ENTERPRISE LTD. since February 2008. MAX TIME ENTERPRISE LTD. owns approximately
13.34% of the outstanding shares of the Company's outstanding common stock. She
joined MAX TIME ENTERPRISE LTD. in March 2007 as a manager. From 2001 until
joining the Company, she worked as a department manager of Shenzhen Hongfa
Trading Company.
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.
Chunhua Yang, our sole director, does not satisfy the criteria of an
"Audit Committee Financial Expert."
Compensation of Directors
During the fiscal year ended December 31, 2008, 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.
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 Ping None None None None None None None
Cheng (1)
- --------------------------------------------------------------------------------------------------------------
Hui Ping Cheng served as a director until January 23, 2009.
9
Conflicts of Interest
Chunhua Yang, 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 Chunhua Yang 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.
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 2008 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 served as our President, Chief Executive and Financial
Officer and a Director from November 7, 2007 until January 23, 2009.
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, and Chief Financial Officer
from November 7, 2007 to January 23, 2009.
10
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 2008 None None None None None None None None
President, 2007(1) None None None None None None None None
CEO, CFO
and Director
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Ms. Cheng served as our CEO, President and CFO from November 7, 2007.
Outstanding Equity Awards
Ms. Cheng did not receive any equity awards during 2008 or hold any
outstanding options to purchase shares of our common stock as of December 31,
2008.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
The following table sets forth, as of April 14, 2009, 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,
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 April 14, 2009, 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
- ---------------- -------------------- -------
Chunhua Yang (1) 1,000,000 13.34%
Executive Officers and
Directors as a Group (one
person) 1,000,000 13.34%
- ----------
(1) Chunhua Yang 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 of
which she is President and CEO.
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, 2008.
(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
11
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 was 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 was the sole owner, and then 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
Chunhua Yang, 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.
(b) Exhibits.
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)
(c) Financial statement schedules: None
12
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 2008:
Fiscal year ended December 31,
2007 2008
---------- ----------
Audit Fees $ 3,500 $ 9,875
Audit Related Fees $ 0 $ 0
Tax Fees $ 0 $ 0
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
Board of Directors' 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 2008 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.
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.
Our Board of Directors 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, our Board of Directors
determined that the audited financial statements be included in the our Annual
Report on Form 10-K for our 2008 fiscal year for filing with the SEC.
13
DOMAIN REGISTRATION, CORP.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
DECEMBER 31, 2008
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONTENTS
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Deficit F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
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 sheets of Domain Registration Corp (A
Development Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2008 and 2007 and since inception on July 10, 1996
through December 31, 2008. 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.
We conduct 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, 2008 and 2007, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2008 and 2007 and since inception on July 10, 1996
through December 31, 2008, 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 no operations or a source of revenue
sufficient to cover operations, 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
April 15, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
------------------------------------------------------------------------------
F-1
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
December 31, December 31,
2008 2007
--------- ---------
ASSETS
CURRENT ASSETS
Total Current Assets $ -- $ --
--------- ---------
Total Assets $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 28,455 $ 12,355
Officer advances 51,645 --
--------- ---------
Total Current Liabilities 80,100 12,355
--------- ---------
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 50,000,000 shares authorized,
7,500,000 shares issued and outstanding at December 31, 2008
and 2007 7,500 7,500
Additional paid-in capital 80,568 80,568
Accumulated deficit during development stage (168,168) (100,423)
--------- ---------
Total Stockholders' Deficit (80,100) (12,355)
--------- ---------
Total Liabilities and Stockholders' Deficit $ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements.
F-2
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
July 10, 1996
Year Ended (inception) to
December 31, December 31,
2008 2007 2008
Revenues $ -- $ -- $ 44
Cost of revenue -- -- --
----------- ----------- -----------
Gross profit -- -- 44
General, selling and administrative expenses 67,745 7,418 168,212
----------- ----------- -----------
Operating (loss) (67,745) (7,418) (168,168)
----------- ----------- -----------
Nonoperating income (expense) -- -- --
----------- ----------- -----------
(Loss) before income taxes (67,745) (7,418) (168,168)
Income tax expense -- -- --
----------- ----------- -----------
Net (loss) $ (67,745) $ (7,418) $ (168,168)
=========== =========== ===========
Net (loss) per share, basic and diluted $ (0.01) $ --
=========== ===========
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-3
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
No par value
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.
Par value $0.001, October 10, 2001 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)
Net loss, December 31, 2008 -- -- -- (67,745) (67,745)
--------- --------- --------- --------- ---------
Balance, December 31, 2008 7,500,000 $ 7,500 $ 80,568 $(168,168) $ (80,100)
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
Year Ended July 10, 1996
December 31, (inception) to
------------------------- December 31,
2008 2007 2008
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (67,745) $ (7,418) $(168,168)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Changes in operating assets and liabilities:
Increase (decrease) in prepaid expense -- -- --
Increase (decrease) in accounts payable 16,100 -- 28,455
--------- --------- ---------
Net cash provided by (used in) operating activities (51,645) (7,418) (139,713)
--------- --------- ---------
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 51,645 -- 51,645
--------- --------- ---------
Net cash provided by (used in) financing activities 51,645 7,418 139,713
--------- --------- ---------
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 $ 76,550
The accompanying notes are an integral part of these financial statements.
F-5
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
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, 2008 and December 31, 2007.
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 June 30, 2008, 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.
ADVERTISING EXPENSE
Since the Company is a shell company and has no operations, no advertising fees
have been incurred as of December 31st, 2008.
F-6
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2007, the FASB issued SFAS No. 141R, "Business Combinations" ("SFAS
No. 141R"). SFAS No. 141R amends SFAS 141 and provides revised guidance for
recognizing and measuring identifiable assets and goodwill acquired, liabilities
assumed, and any noncontrolling interest in the acquiree. It also provides
disclosure requirements to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. It is effective
for fiscal years beginning on or after December 15, 2008 and will be applied
prospectively. We are currently evaluating the impact of adopting SFAS No. 141R
on our consolidated financial statements.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements -- an amendment of ARB No. 51" ("SFAS No.
160"). SFAS No. 160 requires that ownership interests in subsidiaries held by
parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
December 15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements.
In March 2008, the FASB issued FASB Statement No. 161, Disclosures about
Derivative Instruments and Hedging Activities. The new standard is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity's financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows. Management is
currently evaluating the effect of this pronouncement on financial statements.
On May 8, 2008, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 162, The Hierarchy of Generally
Accepted Accounting Principles, which will provide framework for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. generally accepted accounting principles
(GAAP) for nongovernmental entities. With the issuance of SFAS No. 162, the GAAP
hierarchy for nongovernmental entities will move from auditing literature to
accounting literature. The Company is currently assessing the impact of SFAS No.
162 on its financial position and results of operations.
F-7
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
F-8
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 2 - STOCKHOLDERS' EQUITY (CONTINUED)
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, 2008 and
December 31, 2007. As of December 31, 2008 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, 2008 and
December 31, 2007 are as follows:
December 31, 2008 December 31, 2007
----------------- -----------------
Net operating loss carryforward $ 57,177 $ 34,144
Valuation allowance (57,177) (34,144)
----------------- -----------------
Net deferred tax asset $ -- $ --
================= =================
A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
Year Ended
---------------------------------------
December 31, 2008 December 31, 2007 Since Inception
----------------- ----------------- -----------------
Tax at statutory rate (34%) $ -- $ -- $ --
Increase in deferred tax assets (23,033) (2,522) (57,177)
Increase in valuation allowance 23,033 2,522 57,177
----------------- ----------------- -----------------
Income tax expenses $ -- $ -- $ --
================= ================= =================
The net federal operating loss carry forward will expire between 2016 and 2027.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
F-9
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 3 - INCOME TAXES (CONTINUED)
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.
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:
F-10
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 6 - BUSINESS COMBINATIONS (CONTINUED)
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.
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. As of
December 31, 2008 and December 31, 2007, the Company owed the officer $51,645
and $0 respectively.
F-11
DOMAIN REGISTRATION, CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 7 - OFFICER ADVANCES (CONTINUED)
On November 7, 2007, the Company's former 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 former officer forgave the indebtedness
owed to her by the Company. The balance of the former officer advances was
adjusted to common stock and additional paid-in capital as the former officer's
capital contribution to the Company.
F-12
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 15, 2009 Domain Registration, Corp.
/s/ Chunhua Yang
---------------------------------------------
By: Chunhua Yang
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 15, 2009.
Signature Title
/s/ Chunhua Yang President, Chief Executive Officer, Chief Financial
- ------------------ Officer, and a Director (Principal Executive and
Chunhua Yang Financial Officer)