SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 1 to

FORM 10-K

 

/X/   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2011

 

/  /   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______________to ______________

 

Commission File Number 000-53749

 

DOMAIN EXTREMES INC.

(Exact Name of Registrant as Specified in Its Charter)

 

State of Nevada, USA (State or Other Jurisdiction of Incorporation or Organization)	98-0632051 (I.R.S. Employer Identification No.)
602 Nan Fung Tower, Suite 6/F 173 Des Voeux Road Central Central District, Hong Kong  (Address of Principal Executive Offices)	N/A (Zip Code)

 

+(852) 2868-0668

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class	Name of Each Exchange on Which Registered
None	N/A

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. □ Yes   ■ No

 

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   ■ Yes   □ No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the 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.

 

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller Reporting Company ■

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   □ Yes   ■ No

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates was $859,170 as of June 30, 2011 (the registrant’s most recently completed second quarter), based upon total outstanding shares as of such date of 122,315,271, of which 71,597,520 shares were held by non-affiliates. As of June 30, 2011, the last transacted price of the registrant was US$0.012 per share.

 

As of March 1, 2012, there were 144,542,831 shares of the registrant’s common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933.

 

None.

 

EXPLANATORY NOTE

 

 

This Amendment No. 1 to the Registrant’s Form 10-K for year ended December 31, 2011, is being filed solely to correct the Report of Independent Registered Public Accounting Firm by adding the conformed signature and date of report. There are no other changes to this Report since the Registrant filed the original Form 10-K on March 30, 2012.

 

 

 

 

PART II

 

 

 

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The financial statements to be provided in this Annual Report on Form 10-K are included following Part IV, Item 15, commencing on page F-1.

 

Summarized Quarterly Data (unaudited)

 

The following table summarizes our quarterly results of operations for the year ended December 31, 2011:

 

		Quarter ended March 31,  2011				Quarter ended June 30, 2011				Quarter ended September 30, 2011				Quarter ended December 31,  2011
Revenue			4,308				4,307				24,546				4,308
Loss from operations			(6,635	)			(7,780	)			(9,888	)			(18,759	)
Interest income			-				-				-				-
Profit/(Loss) before provision for income taxes			(2,327	)			(3,473	)			14,658				(14,451	)
Provision for income taxes			-				-				-				-
Net Profit/(Loss)			(2,327	)			(3,473	)			14,658				(14,451	)
Weighted average shares outstanding basic and diluted			122,315,271				122,315,271				132,897,422				143,962,781
Basic and diluted net loss per share		(0.00 cents)				(0.00 cents)				0.01 cents				(0.01 cents)

 

 

 

 

 

INDEX TO FINANCIAL STATEMENTS

 

	Pages
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Changes in Stockholders’ Equity	F-5 - F-7
Statements of Cash Flows	F-8
Notes to Financial Statements	F-9 - F-20

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders of

DOMAIN EXTREMES INC

 

We have audited the accompanying balance sheets of Domain Extremes Inc (the “Company”), a development stage company, as of December 31, 2011 and 2010 and the related statements of operations, shareholders’ equity and other comprehensive income, and cash flows, for the period from January 23, 2006 (inception) to December 31, 2011, and two years ended December 31, 2011 and 2010. 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 conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010 and the results of its operations and their cash flows for the period from January 23, 2006 (inception) to December 31, 2011, and two years ended December 31, 2011 and 2010 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 is in the development stage and has minimal operations. Its ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, develop websites, generate advertising income, and ultimately, achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

  

/s/ Dominic K.F. Chan & Co.

 

Dominic K.F. Chan & Co

Certified Public Accountants

 

Hong Kong, March 28, 2012

 

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

BALANCE SHEETS

(Stated in US Dollars)

 

						At December 31,
		Notes				2011 $				2010 $
ASSETS
Current Asset :
Cash and cash equivalents							269				2,779
Prepaid expenses and other receivables		6					42,064				26,309
Total Current Asset							42,333				29,088
Non-Current Asset :
Plant and equipment							635				957
Total Non-Current Assets							635				957
TOTAL ASSETS							42,968				30,045
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current Liabilities :
Accrued expenses and other payables		7					6,862				29,083
Advance from related company		8					2,618				-
Advance from related parties		9					9,304				15,641
Total Current Liabilities							18,784				44,724
TOTAL LIABILITIES							18,784				44,724
STOCKHOLDERS’ EQUITY/ (DEFICIT)
Common stock Par value: US$0.001 Authorized: 200,000,000 shares   (2010 – 200,000,000 shares) Issued and outstanding: 2011 – 144,542,831 shares (2010 – 122,315,271 shares)			5				144,543				122,315
Additional paid-in-capital							67,907				45,679
Deficit accumulated during the development stage							(188,266	)			(182,673	)
TOTAL STOCKHOLDERS’ EQUITY/ (DEFICIT)							24,184				(14,679	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY/ (DEFICIT)							42,968				30,045

 

See accompanying notes to financial statements

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

STATEMENTS OF OPERATIONS

(Stated in US Dollars)

 

 

						For the year ended  December 31,  2011				For the year ended December 31, 2010				For the period January 23, 2006 (inception) through December 31, 2011
		Notes				$				$				$
Net sales							17,231				20,538				43,346
Cost of sales							-				-				-
Gross Profit							17,231				20,538				43,346
Impairment loss of long-term investment							-				-				(10,000	)
Impairment loss of intangible assets							-				-				(3,910	)
Other operating income		3					20,238				1,643				25,256
Administrative and other operating expenses, including share based compensation							(43,062	)			(76,521	)			(242,958	)
Operating profit/ (loss) before income taxes							(5,593	)			(54,340	)			(188,266	)
Income taxes		4					-				-				-
Net loss and comprehensive loss							(5,593	)			(54,340	)			(188,266	)
Loss per share of common stock
- Basic and diluted						(0.00 cents)				(0.05 cents)
Weighted average shares of common stock
- Basic and diluted							130,320,366				112,745,976

 

See accompanying notes to financial statements

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Stated in US Dollars)

 

 

														Deficit
														accumulated
										Additional				during the
		Common stock								Paid-in				development
		Share(s)				Amount				Capital				stage				Total
						$				$				$				$
Balance, January 23, 2006 (Inception)			-				-				-				-				-
Common stock issued for cash on March 29, 2006			3,000,000				3,000				-				-				3,000
Common stock issued for cash on June 30, 2006			13,910,256				13,910				-				-				13,910
Compensatory portion of stock issuance on June 30, 2006			3,846,155				3,846				-				-				3,846
Compensatory portion of stock issuance on September 30, 2006			371,790				372				-				-				372
Compensatory portion of stock issuance on December 31, 2006			4,115,379				4,115				-				-				4,115
Net loss and comprehensive loss			-				-				-				(24,845	)			(24,845	)
Balance, December 31, 2006			25,243,580				25,243				-				(24,845	)			398
Compensatory portion of stock issuance on March 31, 2007			25,640				26				-				-				26
Compensatory portion of stock issuance on June 30, 2007			3,987,200				3,987				-				-				3,987
Compensatory portion of stock issuance on September 30, 2007			25,640				26				-				-				26
Compensatory portion of stock issuance on December 31, 2007			3,846,180				3,846				-				-				3,846
Net loss and comprehensive loss			-				-				-				(12,549	)			(12,549	)
Balance, December 31, 2007 and Balance forward			33,128,240				33,128				-				(37,394	)			(4,266	)

 

See accompanying notes to financial statements

 

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Stated in US Dollars)

 

 

														Deficit
														accumulated
										Additional				during the
		Common stock								Paid-in				development
		Share(s)				Amount				Capital				stage				Total
						$				$				$				$
Balance forward			33,128,240				33,128				-				(37,394	)			(4,266	)
Compensatory portion of stock issuance on June 30, 2008			3,897,460				3,898				-				-				3,898
Compensatory portion of stock issuance on September 30, 2008			2,076,930				2,077				-				-				2,077
Compensatory portion of stock issuance on December 31, 2008			2,051,290				2,051				-				-				2,051
Net loss and comprehensive loss			-				-				-				(33,429	)			(33,429	)
Balance, December 31, 2008			41,153,920				41,154				-				(70,823	)			(29,669	)
Common stock issued for cash on March 27, 2009			28,520,301				28,520				1,283				-				29,803
Common stock issued for cash on May 15, 2009			9,615,382				9,615				9,615				-				19,230
Common stock issued for cash on May 18, 2009			6,410,255				6,410				6,410				-				12,820
Compensatory portion of stock issuance on March 31, 2009			1,961,550				1,962				-				-				1,962
Compensatory portion of stock issuance on June 30, 2009			2,000,010				2,000				-				-				2,000
Compensatory portion of stock issuance on September 30, 2009			2,179,500				2,180				-				-				2,180
Compensatory portion of stock issuance on December 31, 2009			2,102,580				2,102				-				-				2,102
Net loss and comprehensive loss			-				-				-				(57,510	)			(57,510	)
Balance, December 31, 2009 and Balance forward			93,943,498				93,943				17,308				(128,333	)			(17,082	)

 

See accompanying notes to financial statements

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Stated in US Dollars)

 

 

														Deficit
														accumulated
										Additional				during the
		Common stock								Paid-in				development
		Share(s)				Amount				Capital				stage				Total
						$				$				$				$
Balance forward			93,943,498				93,943				17,308				(128,333	)			(17,082	)
Common stock issued for cash on February 1, 2010			12,660,245				12,661				12,660				-				25,321
Common stock issued for cash on June 30, 2010			9,615,378				9,615				9,615				-				19,230
Compensatory portion of stock issuance on March 31, 2010			1,557,690				1,558				1,558				-				3,116
Compensatory portion of stock issuance on June 30, 2010			1,519,230				1,519				1,519				-				3,038
Compensatory portion of stock issuance on September 30, 2010			1,538,460				1,538				1,538				-				3,076
Compensatory portion of stock issuance on December 31, 2010			1,480,770				1,481				1,481				-				2,962
Net loss and comprehensive loss			-				-				-				(54,340	)			(54,340	)
Balance, December 31, 2010			122,315,271				122,315				45,679				(182,673	)			(14,679	)
Common stock issued for cash on August 18, 2011			17,307,690				17,308				17,308				-				34,616
Compensatory portion of stock issuance on August 18, 2011			4,326,930				4,327				4,327				-				8,654
Compensatory portion of stock issuance on December 29, 2011			592,940				593				593				-				1,186
Net loss and comprehensive loss			-				-								(5,593	)			(5,593	)
Balance, December 31, 2011			144,542,831				144,543				67,907				(188,266	)			24,184

 

See accompanying notes to financial statements

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

 

 

 

		For the year ended December 31,  2011				For the year ended December 31, 2010				For the period January 23, 2006 (inception) through December 31, 2011
		$				$				$
Cash flows from operating activities:
Net loss and comprehensive loss			(5,593	)			(54,340	)			(188,266	)
Depreciation			322				323				968
Share based compensation			9,840				12,192				71,430
Changes in current assets and liabilities
Prepaid expenses and other receivables			(15,755	)			(19,899	)			(42,064	)
Amount due to related company			2,618				-				2,618
Amount due to related parties			(6,337	)			2,821				9,304
Accrued expenses and other payables			(22,221	)			13,548				6,862
Net cash used in operating activities			(37,126	)			(45,355	)			(139,148	)
Cash flows from financing activity:
Issuance of share capital			34,616				44,551				141,020
Net cash provided by financing activity			34,616				44,551				141,020
Cash flows from investing activity:
Purchase of property, plant and equipment			-				-				(1,603	)
Net cash used in investing activity			-				-				(1,603	)
Net (decrease)/ increase in cash and cash equivalents			(2,510	)			(804	)			269
Cash and cash equivalents at beginning of the year			2,779				3,583				-
Cash and cash equivalents at end of the year			269				2,779				269
Supplementary disclosures of cash flow information:
Interest paid			-				-				-
Income taxes paid			-				-				-

 

See accompanying notes to financial statements

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

1.	Organization and nature of operations

 

 

Domain Extremes Inc (“the Company”), a development stage company, was organized under the laws of the State of Nevada on January 23, 2006. The Company is in the development stage as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915. Among the disclosures required by FASB ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of earnings, retained earnings and stockholders’ equity and cash flows disclose activity since the date of the Company’s inception. The fiscal year end is December 31.

 

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future.  Since January 23, 2006, the Company has generated revenue of $43,346 and has incurred an accumulated deficit of $188,266.

 

The Company is currently devoting its efforts to develop websites on the Internet and through which to generate advertising income.  The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, develop websites, generate advertising income, and ultimately, achieve profitable operations. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

2.	Summary of principal accounting policies

On June 29, 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the single source of authoritative U.S. generally accepted accounting principles (GAAP) for all nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) are also sources of authoritative U.S. GAAP for SEC registrants. The Codification does not change U.S. GAAP but takes previously issued FASB standards and other U.S. GAAP authoritative pronouncements, changes the way the standards are referred to, and includes them in specific topic areas. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of the Codification did not have any impact on the Company’s financial statements.

 

Basis of presentation

 

The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

2.	Summary of principal accounting policies (Continued)

 

Use of estimates

 

The preparation of the 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 disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

 

Impairment of long-lived assets

 

The Company accounts for the impairment of long-lived assets, such as plant and equipment, leasehold land and intangible assets, under the provisions of FASB Accounting Standard Codification Topic 360 (“ASC 360”) “Property, Plant and Equipment – Overall” (formerly known as SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets” (“SFAS 144”)). ASC 360 establishes the accounting for impairment of long-lived tangible and intangible assets other than goodwill and for the disposal of a business. Pursuant to ASC 360, the Company periodically evaluates, at least annually, whether facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. In the event that the carrying amount of long-lived assets exceeds the undiscounted future cash flows, then the carrying amount of such assets is adjusted to their fair value. The Company reports an impairment cost as a charge to operations at the time it is recognized.

 

Income taxes

 

The Company utilizes FASB Accounting Standard Codification Topic 740 (“ASC 740”) “Income taxes” (formerly known as SFAS No. 109, "Accounting for Income Taxes"), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

2.	Summary of principal accounting policies (Continued)

 

Income taxes (Continued)

 

ASC 740 “Income taxes” (formerly known as Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standards No. 109 (“FIN 48”)) clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgement occurs. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the statements of operations. The adoption of ASC 740 did not have a significant effect on the financial statements.

 

Comprehensive income

 

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.

 

Stock-based compensation

 

The Company has adopted FASB Accounting Standard Codification Topic 718 (“ASC 718”), ”Stock Compensation” (formerly known as SFAS 123(R), Share-Based Payment), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including stock option grants based on estimated fair values. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the award’s portion that is ultimately expected to vest is recognized as expense over the requisite service periods. Prior to the adoption of ASC 718, we accounted for share-based awards to employees and directors using the intrinsic value method. Under the intrinsic value method, share-based compensation expense was only recognized by us if the exercise price of the stock option was less than the fair market value of the underlying stock at the date of grant.

 

The Company accounts for stock-based compensation to non-employees and consultants in accordance with the provisions of ASC 505-50 “Equity –Based Payments to Non-employees”. Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transactions should be determined at the earlier of performance commitment date or performance completion date.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

2.	Summary of principal accounting policies (continued)

Issuance of shares for service

 

The Company accounts for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable.

 

Foreign currencies translation

 

The functional currency of the Company is Hong Kong dollars (“HK$”).  The Company maintains its financial statements in the functional currency.  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

 

For financial reporting purposes, the financial statements of the Group which are prepared using the functional currency have been translated into United States dollars.  Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates.  Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

 

Fair value of financial instruments

 

The carrying values of the Company’s financial instruments, including cash and cash equivalents, trade and other receivables, deposits, trade and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

2.	Summary of principal accounting policies (continued)

 

Earnings per share

 

Basic earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share.  The average market price during the year is used to compute equivalent shares.

 

FASB Accounting Standard Codification Topic 260 (“ASC 260”), “Earnings Per Share,” requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the “treasury stock” method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share.

 

Website Development Costs

 

The Company recognized the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost” that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”.  Relating to website development costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting for Website Development Costs”.  The website development costs are divided into three stages, planning, development and production. The development stage can further be classified as application and infrastructure development, graphics development and content development. In short, website development cost for internal use should be capitalized except content input and data conversion costs in content development stage.

 

Costs associated with the website consist primarily of website development costs paid to third party and directors.  These capitalized costs will be amortized based on their estimated useful life over three years upon the website becoming operational.  Internal costs related to the development of website content will be charged to operations as incurred. Web-site development costs related to the customers are charged to cost of sales.

 

Revenue recognition

 

The Company recognized revenues from advertising insertion revenue in the period in which the advertisement is displayed, provided that evidence of an arrangement exists, the fees are fixed or determinable and collection of the resulting receivable is reasonably assured. If fixed-fee advertising is displayed over a term greater than one month, revenues are recognized ratably over the period as described below. The majority of insertion orders have terms that begin and end in a quarterly reporting period. In the cases where at the end of a quarterly reporting period the term of an insertion order is not complete, the Company recognizes revenue for the period by pro-rating the total arrangement fee to revenue and deferred revenue based on a measure of proportionate performance of its obligation under the insertion order. The Company measures proportionate performance by the number of placements delivered and undelivered as of the reporting date.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

2.	Summary of principal accounting policies (continued)

 

Recently issued accounting pronouncements

 

In May 2011, the FASB issued ASU 2011-04 which is intended to consistent with the Memorandum of Understanding and the Boards’ commitment published in 2006 to achieving that goal, the amendments in this Update are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs). The Boards worked together to ensure that fair value has the same meaning in U.S. GAAP and in IFRSs and that their respective fair value measurement and disclosure requirements are the same (except for minor differences in wording and style). The Boards concluded that the amendments in this Update will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs. The amendments in this Update explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting.

 

In June 2011, the FASB issued ASU 2011-05 which is intended to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. To increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), the FASB decided to eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, among other amendments in this Update. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

3.	Other income

 

		For the year ended December 31, 2011				For the year  ended December 31, 2010				For the period January 23, 2006 (inception) through December 31, 2011
		$				$				$
Bank interest income			-				-				26
Gain on exchange			-				113				383
Sundry income			20,238				1,530				24,847
Total			20,238				1,643				25,256

 

 

4.           Income taxes

 

The Company is incorporated in the Untied States, and is subject to United States federal and state income taxes. The Company did not generate taxable income in the United States for the years ended December 31, 2011 and 2010.

 

The Company’s operations are carried out in Hong Kong, the PRC, and is subject to Hong Kong profit tax at 16.5% in 2011 (2010: 16.5%). No provision for Hong Kong income or profit tax has been made as the Company has no assessable profit for the period. The cumulative tax losses will represent a deferred tax asset. The Company will provide a valuation allowance in full amount of the deferred tax asset since there is no assurance of future taxable income.

 

The cumulative net operating loss carry forward is approximately $188,266 and $182,673 as at December 31, 2011 and 2010 respectively, and will expire beginning in the year 2026. Annual use of the net operating loss may be limited by Internal Revenue Code section 382 due to an ownership change.

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 

		Year ended December 31,
		2011				2010
		$				$
Deferred tax asset attributable to Net operating loss carryover			64,010				62,108
Valuation allowance			(64,010	)			(62,108	)
Net deferred tax assets			-				-

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

5.	Shareholders’ equity

 

Capitalization

 

The Company has the authority to issue 200,000,000 shares of common stock, $0.001 par value. The total number of shares of the Company’s common stock outstanding as of December 31, 2011 and 2010 are 144,542,831 and 122,315,271 respectively.

 

Equity transactions

 

Following is the summary of equity transactions during the year ended December 31, 2010.

 

On February 1, 2010, we issued 12,660,245 shares of our common stock to Francis Bok, Ho Wai Ming, Fergus, Sum Wing Suzan, Tang Wai Leong and Leadersoft Asia Limited for a consideration of US$25,320.49.

 

On March 31, 2010, we issued 1,442,310 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$2,884.62 in lieu of cash compensation for director and secretary service from January 2010 to March 2010.

 

On March 31, 2010, we issued 115,380 shares of our common stock to Stephen Tang valued at US$230.76 in lieu of cash compensation for writer service at website www.drinkeat.com from January 2010 to March 2010.

 

On June 30, 2010, we issued 9,615,378 shares of our common stock to Francis Bok, Stephen Tang, Tang Wai Leong and Xue Xiao Han for a consideration of US$19,230.76.

 

On June 30, 2010, we issued 1,442,310 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$2,884.62 in lieu of cash compensation for director and secretary service from April 2010 to June 2010.

 

On June 30, 2010, we issued 76,920 shares of our common stock to Stephen Tang, Patience Lee and Sally Lui valued at US$153.84 in lieu of cash compensation for writer service at website www.drinkeat.com from April 2010 to June 2010.

 

On September 30, 2010, we issued 1,442,310 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$2,884.62 in lieu of cash compensation for director and secretary service from July 2010 to September 2010.

 

On September 30, 2010, we issued 96,150 shares of our common stock to Stephen Tang valued at US$192.30 in lieu of cash compensation for writer service at website www.drinkeat.com from July 2010 to September 2010.

 

On December 31, 2010, we issued 1,442,310 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$2,884.62 in lieu of cash compensation for director and secretary service from October 2010 to December 2010.

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

5.           Shareholders’ equity (continued)

 

Equity transactions (continued)

 

Following is the summary of equity transactions during the year ended December 31, 2010.

 

On December 31, 2010, we issued 38,460 shares of our common stock to Stephen Tang and Patience Lee valued at US$76.92 in lieu of cash compensation for writer service at website www.drinkeat.com from October 2010 to December 2010.

 

Following is the summary of equity transactions during the year ended December 31, 2011.

 

On August 18, 2011, we issued 4,326,930 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$8,653.86 in lieu of cash compensation for director and secretary service from January 2011 to September 2011.

 

On August 18, 2011, we issued 17,307,690 shares of our common stock to Francis Bok, Stephen Tang and Tang Wai Leong for a consideration of US$34,615.38.

 

On December 29, 2011, we issued 592,940 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$1,185.88 in lieu of cash compensation for director and secretary service from October 1, 2011 to November 7, 2011.

 

6	Prepaid expenses and other receivables

 

Other receivables and prepaid expenses as of December 31, 2011 and 2010 are summarized as follows:

 

		Year ended December 31,
		2011				2010
		$				$
Other receivables			-				1,309
Prepaid expenses			42,064				25,000
Total			42,064				26,309

 

 

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

7	Accrued expenses and other payables

 

Accrued expenses and other payables as of December 31, 2011 and 2010 are summarized as follows:

 

		Year ended December 31,
		2011				2010
		$				$
Accrued audit fee			6,410				6,410
Accrued salaries			-				11,538
Other payable			452				11,135
Total			6,862				29,083

 

 

8.	Advance from related company

 

The amount due to related company as of December 31, 2011 represents advanced payment due to Mega Pacific Capital Inc. The amount due to related company is interest free without maturity date and repayable upon demand.

 

9.	Advance from related parties

 

The amount due to related parties as of December 31, 2011 and 2010 represents advanced payment due to the Company’s directors.  The amount due to directors is interest free without maturity date and repayable upon demand.

 

10.	Related party transactions

 

		Year ended December 31,
		2011				2010
		$				$
Beyond IVR Limited			577				962
Mega Pacific Capital Inc.			-				1,309
Leadersoft Asia Limited			-				3,205
Stephen Tang			-				269

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

10.	Related party transactions (continued)

 

The following is a summary of related party transactions for the year ended December 31, 2010:

 

During the period ended December 31, 2010, Domain Extremes issued 4,615,440 shares of common stock valued at $9,230.88 to its directors in lieu of cash compensation.  The stocks were valued at US$9,230.88 for the period for which service were provided.

 

Domain Extremes issued 269,220 shares of common stock valued at $538.44 to its director in lieu of cash compensation for writer service at website www.drinkeat.com.

 

Leadersoft Asia Limited paid $3,205.13 to Domain Extremes for shares capital of 1,602,565 shares of common stock.

 

Domain Extremes paid $961.55 to Beyond IVR Limited for onsite technical support fee and computer server hosting service fee.

 

Mega Pacific paid $1,308.85 to Domain Extremes for online advertising fee and administration fee.

 

 

The following is a summary of related party transactions for the year ended December 31, 2011:

 

During the period ended December 31, 2011, Domain Extremes issued 3,935,940 shares of common stock valued at $7,871.88 to its directors in lieu of cash compensation.  The stocks were valued at US$7,871.88 for the period for which service were provided.

 

Francis Bok paid $17,307.69 to Domain Extremes for shares capital of 8,653,845 shares of common stock.

 

Stephen Tang paid $14,999.99 to Domain Extremes for shares capital of 7,499,995 shares of common stock.

 

Domain Extremes paid $576.92 to Beyond IVR Limited for computer server hosting service fee.

 

 

11.	Commitments and contingencies

 

There has been no legal proceedings in which the Company is a party during the years ended December 31, 2011 and 2010.

 

 

DOMAIN EXTREMES INC

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO FINANCIAL STATEMENTS

(Stated in US Dollars)

 

 

12.	Current vulnerability due to certain concentrations

 

The Company's operations are carried out in Hong Kong, the PRC.  Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in Hong Kong, by the general state of the PRC's economy.  The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

 

13.	Subsequent Events

 

Effective on February 7, 2012, Mr. Huang Run Peng and Ms. Wu Cai Xia were each elected to the Board of Directors of Domain Extreme Inc. by the Board in order to fill vacancies existing on the Board. As directors, they will be paid a monthly director’s fee of US$1,000 each in cash.

 

Except for the above, there were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our Financial Statements for the year ended December 31, 2011.

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 11th day of September, 2012.

 

	DOMAIN EXTREMES INC.
	By: /s/ Francis Bok
	Francis Bok
	President
	(Principal Executive Officer)

 

 

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name	Title	Date
/s/ Francis Bok Francis Bok	President; Director (Principal Executive Officer)	September 11, 2012
/s/ Stephen Tang Stephen Tang	Treasurer; Director (Principal Financial and Accounting Officer)	September 11, 2012
/s/ Huang Run Peng Huang Run Peng	Director	September 11, 2012
/s/ Wu Cai Xia Wu Cai Xia	Director	September 11, 2012