Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - DLD Group, Inc. | Financial_Report.xls |
| EX-31.1 - EXHIBIT 31.1 - DLD Group, Inc. | exhibit31-1.htm |
| EX-32.1 - EXHIBIT 32.1 - DLD Group, Inc. | exhibit32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
or
[ ] 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: 000-27195
DLD GROUP, INC.
(Exact name
of registrant as specified in its charter)
| Nevada | 98-0117139 |
| (State or other jurisdiction of incorporation | (I.R.S. Employer Identification No.) |
| or organization) |
25 Fordham Drive
Buffalo, New York
14216
(Address of principal executive offices) (Zip Code)
(716) 868-6789
(Registrant’s telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
(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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. [X]
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 Exchange Act).
Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held non-affiliates: none.
At March 14, 2014, 100,138,016 shares of the Registrant’s common stock, par value $0.001 per share, were issued and outstanding.
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS
Corporate History
DLD Group, Inc. (the “Company”) was incorporated in the State of Nevada on June 25, 1997. The Common Stock of the Company was quoted on the OTC Bulletin Board (“OTCBB”) under the trading symbol “EWRX” until October 18, 1999 when they traded under the symbol “EWRXE.” The “E” was added by the National Association of Securities Dealers Inc. (“NASD”) to reflect the Company’s inability to meet NASD requirements for listing on the OTCBB. On November 17, 1999, the Company’s stock began trading on the “pink sheets” under the symbol “EWRX.” Prior to 1999, the Company’s sole business was in the Resource Sector. The Company was known as Europa Resources, Inc. and was held in a joint venture with a private Ukraine company whose primary business purpose was the development and production of industrial garnets for abrasive applications (the “Joint Venture”).
In the fourth quarter of 1998, the Company elected to abandon the Joint Venture which represented substantially all of the Company’s assets at the time. The Company was able to recover 2,000,000 shares it used as part of the purchase arrangement for the Joint Venture and subsequently wrote off and closed all of its’ subsidiary operations.
Effective January 27, 2000, the Company regained quotation of its common stock on the OTCBB, following clearance of its form 10-SB by the SEC. This quotation was revoked by the SEC by an Administrative Order dated August 28, 2006.
The prior management acquired the Company through because of the Company’s interest in acquisition of software owned by Navitex Canada Inc. (“Navitex”). In the latter part of April 2002, the then principals of the Company suggested that Navitex Canada Inc. became the majority shareholder of the Company through the issuance of shares for consideration of debt owed to Navitex under an agreement to purchase software called Instant Recall and owned by Navitex. As a result of this agreement, the prior management took over the controlling interest of the Company.
1
The Company had accumulated a very large outstanding debt and had no tangible assets, other than the software it had acquired from Navitex. The new management focused the majority of its efforts on reducing the Company’s outstanding debt which contributed to a delay in bringing the software to market and the Company’s records up to date. By the Spring of 2005, the Company was finally stabilized and in a position to move ahead with its plans to market its software and begin bringing its financial statements up to date and preparing for anticipated demand for its software.
As a result of development in the marketplace it became necessary for the Company to spend a very considerable amount of time bringing its software to the next stage of development. The SATA mother boards were becoming a market consideration and to remain abreast of the competition we were required to develop our software to meet this demand. This of course took time away from other considerations and delayed our market penetration.
In the early part of 2006, the Company was able to bring its operations into a current state and commission an audit of its affairs. The result of these audits was the filings the Company made on December 5, 2006. This filing was later withdrawn as it was filed in form 10SB-12(b) instead of 10SB-12(g). Several other deficiencies in this filing were noted as well, which required correction. The Company re-filed its 10SB-12(g) on May 11, 2007. The SEC reviewed the Form 10SB-12(g) and, pursuant to comments, we filed three subsequent amendments. After our third Amendment to the Form 10SB-12(g) filed on February 8, 2008, the SEC had no additional comments.
In April 2006, without the Company’s knowledge, iMusic contacted our transfer agent and registered new directors, officers and a transfer agent for the Company. iMusic is a company that fraudulently attempted to steal our identity. They were unsuccessful and when the management of the Company became aware of iMusic actions the SEC was notified and advised that these actions were without the Company’s knowledge or approval. While investigating this matter, the Company’s transfer agent was contacted. It was discovered that the agent knew of the iMusic action but did not advise anyone at the Company. The State of Nevada was contacted as well. It was at this time that management discovered that iMusic perpetrated this fraud.
On July 26, 2006 the Commission announced the temporary suspension of the Companies Securities. This notice was sent to the Company by the Commission. The Company never received this notice. By the time the Company became aware of this action, the Commission had issued on August 28, 2006 an order revoking the Company’s registration.
The Company ceased its prior operations and has had no operations or business. Recently, our management determined that it was in the best interests of our shareholders to seek an operating company to acquire. On July 3, 2012, our majority shareholder entered into a Common Stock Purchase Agreement with International Dianliandian Shops Network Science & Technology Corporation, a New York Corporation, Mr. Fenglin Wang, Dr. Wenyi Yu, Mr. Wenyong Wang, Ms. Fang Wang, Mr. Jihuiai Bao and Mr. Fang Cheng for the sale of Seventy Five Million Nine Hundred Twenty Three Thousand Seven Hundred Thirty Three (75,923,733) shares of our Common Stock, representing approximately 75.92% of our issued and outstanding common shares (the “Change of Control”). Pursuant to the Change of Control, our officers and directors resigned and new officers and directors were appointed. The new management is working to acquire a company that focuses on exporting US made products to China via an online shopping service platform. As of the date of this filing, the acquisition of this company has not been completed.
In connection with the Change of Control, the Company filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to effectuate the name change of the Company from “EWRX Internet Systems, Inc.” to “DLD Group, Inc.” The Amendment was filed with and accepted by the Secretary of State for the State of Nevada on October 9, 2012.
2
The Company has not been involved in any bankruptcy, receivership or similar proceeding. In addition, other than the transactions discussed above, the Company has not had any material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.
Business
The Company was engaged in the limited operations of software development. The Company has ceased such operations and has had no operations or business.
Our management is now working to acquire a company that focuses on exporting US made products to China via an online shopping service platform. As of the date of this filing, the acquisition of this Company has not been completed.
We presently have no employees apart from our management. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information required by this item.
Item 1B. Unresolved Staff Comments.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 2. PROPERTIES
The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Public Market for Common Stock
No established public trading market exists for the Company’s common stock as of this report.
3
Common Stock
Our Articles of Incorporation authorizes the issuance of up to 200,000,000 shares of common stock, par value $0.001 per share. The Common Stock is not listed or quoted on any stock exchange.
Preferred Stock
Our Articles of Incorporation authorizes the issuance of up to 500,000 shares of preferred stock, par value $0.01 per share. As of March 14, 2014, there were no shares of preferred stock issued and outstanding.
Holders
As of March 14, 2014, there were 146 stockholders of record holding an aggregate of 100,138,016 shares of the Company’s common stock. This does not reflect the number of persons or entities who held stock in nominee or street name through various brokerage firms.
Dividends
Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
We presently do not have any equity based or other long-term incentive programs. In the future, we may adopt and establish an equity-based or other long-term incentive plan if it is in the best interest of the Company and our stockholders to do so.
ITEM 6. SELECTED FINANCIAL DATA
Smaller reporting companies are not required to provide the information required by this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
Plan of Operations
Since we formally ceased operations, we have had no business or operations. Recently, our management determined that it was in the best interests of our shareholders to seek an operating company to acquire. On July 3, 2012, our majority shareholder entered into a Common Stock Purchase Agreement with International Dianliandian Shops Network Science & Technology Corporation, a New York Corporation, Mr. Fenglin Wang, Dr. Wenyi Yu, Mr. Wenyong Wang, Ms. Fang Wang, Mr. Jihuiai Bao and Mr. Fang Cheng for the sale of Seventy Five Million Nine Hundred Twenty Three Thousand Seven Hundred Thirty Three (75,923,733) shares of our Common Stock, representing approximately 75.92% of our issued and outstanding common shares (the “Change of Control”). Pursuant to the Change of Control, our officers and directors resigned and new officers and directors were appointed. The new management is working to acquire a company that focuses on exporting US made products to China via an online shopping service platform. As of the date of this filing, the acquisition of this company has not been completed.
4
Results of Operations
The Company has been in a state of reorganization and development over the past three years. We were unsuccessful in executing our business plan and therefore were forced to cease operating and enter into the Change of Control transaction.
We did not have any operating income since we re-entered the development stage on January 1, 2002. For the fiscal year ended December 31, 2013, we recognized a net loss of $128,470. Expenses for the fiscal year ended December 31, 2013 were primary comprised of in-kind contribution of $72,000, office and general of $10,383, and professional fees of $36,254.
Liquidity and Capital Resources
The Company has $569 of cash on hand as of December 31, 2013. We currently have very limited cash to continue operations for 12 months.
We intend to rely upon the issuance of common stock and loans and advances from shareholders to fund administrative expenses pending acquisition of an operating company. However, our shareholders are under no obligation to provide such funding, and there can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to the Company.
As discussed above, the Company had a net loss of $128,470 for the year ended December 31, 2013. The Company also had a stockholder's deficiency of $2,812 and a working capital deficiency of $5,366 as of December 31, 2013 and cash used in operations since re-entering the development stage of $382,201. As noted in report of independent registered public accountant firm, this raises substantial doubt about of the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern has been, and remains, dependent on advances from its stockholders and the Company's ability to raise additional capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Critical Accounting Policies
Our significant accounting policies are summarized in Note 1 of our financial statements included in this annual report on Form 10-K for the year ended December 31, 2013. Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
5
DLD GROUP, INC.
(Formerly known as EWRX Internet Systems, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders of:
DLD Group, Inc.
(Formerly known
as EWRX Internet Systems, Inc.)
(A Development Stage Company)
We have audited the accompanying balance sheets of DLD Group, Inc. (the “Company”) (a Development Stage Company) as of December 31, 2013 and 2012, and the related statements of operations, comprehensive loss, changes in stockholders’ deficiency, and cash flows for the two years then ended December 31, 2013 and 2012 and for the period from January 1, 2002 (re-entering the development stage) to December 31, 2013. 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 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, these financial statements referred to above present fairly in all material respects, the financial position of DLD Group, Inc. (a Development Stage Company) as of December 31, 2013 and 2012 and the results of its operations and its cash flows for the two years then ended December 31, 2013 and 2012 and for the period from January 1, 2002 (re-entering the development stage) to December 31, 2013 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 2 to the financial statements, the Company is in the development stage with no operations, a net loss of $128,470 for the year ended December 31, 2013, a stockholders' deficiency of $2,812 and a working capital deficiency of $5,366 as of December 31, 2013, and cash used in operations from January 1, 2002 (re-entering the development stage) to December 31, 2013 of $382,201, which raises substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
LIGGETT, VOGT & WEBB, P.A.
Certified Public
Accountants
Boynton Beach, Florida
March 14, 2014
F-1
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Balance Sheets
| December 31 | December 31 | |||||
| 2013 | 2012 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | $ | 569 | $ | - | ||
| Total Current Assets | 569 | - | ||||
| Furniture and equipment | 2,554 | 3,458 | ||||
| Total Assets | $ | 3,123 | $ | 3,458 | ||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||
| Current Liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 5,935 | $ | 6,667 | ||
| Total Liabilities | 5,935 | 6,667 | ||||
| Commitments and Contingencies | ||||||
| Stockholders' Deficiency | ||||||
| Preferred stock, $0.01 par value per share, 500,000 shares authorized, none and none issued and outstanding respectively |
- | - | ||||
| Common stock, $0.001 par value; 200,000,000 shares authorized, 100,138,016 and 100,000,000 shares issued and outstanding, as at December 31, 2013 and December 31, 2012 |
100,138 | 100,000 | ||||
| Additional paid - in capital | 8,199,358 | 8,070,629 | ||||
| Accumulative deficit | (8,496,144 | ) | (8,496,144 | ) | ||
| Earnings accumulated during the development stage | 193,836 | 322,306 | ||||
| Total Stockholders' Deficiency | (2,812 | ) | (3,209 | ) | ||
| Total Liabilities and Stockholders' Deficiency | $ | 3,123 | $ | 3,458 |
F-2
(See accompanying notes to financial statements)
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Statements of Operations and Comprehensive Loss
| For the Period | |||||||||
| January 1, 2002 | |||||||||
| (Re-entering the | |||||||||
| Development | |||||||||
| For the Years | Stage) | ||||||||
| Ended December 31 | to December 31 | ||||||||
| 2013 | 2012 | 2013 | |||||||
| Operating Expenses | |||||||||
| Amortization | $ | 904 | $ | 524 | $ | 1,428 | |||
| In kind contribution - services | 72,000 | 72,000 | 504,000 | ||||||
| Management fees | - | - | 15,000 | ||||||
| Office and General | 10,383 | 13,039 | 74,692 | ||||||
| Professional fees | 36,254 | 35,490 | 317,705 | ||||||
| Salary and Wages | - | - | 28,000 | ||||||
| Telephone | 4,669 | 2,596 | 9,896 | ||||||
| Travel and entertainment | 4,260 | 4,800 | 16,524 | ||||||
| Total Operating Expenses | 128,470 | 128,449 | 967,245 | ||||||
| Net Loss from operations | (128,470 | ) | (128,449 | ) | (967,245 | ) | |||
| Foreign exchange gain (loss) | - | (52 | ) | (8,036 | ) | ||||
| Interest expense | - | (1,375 | ) | (180,757 | ) | ||||
| Forgiveness of debt | - | 1,662 | 1,349,874 | ||||||
| Total Other (Expenses) Income | - | 235 | 1,161,081 | ||||||
| Net (loss) income before income taxes | (128,470 | ) | (128,214 | ) | 193,836 | ||||
| Provision for income taxes | - | - | - | ||||||
| Net (loss) income | $ | (128,470 | ) | $ | (128,214 | ) | $ | 193,836 | |
| Foreign Currency Translation | - | 893 | - | ||||||
| Comprehensive Loss | $ | (128,470 | ) | $ | (127,321 | ) | $ | 193,836 | |
| Net (loss) income per | |||||||||
| Share - Basic and Diluted | $ | - | $ | - | |||||
| Weighted Average Number of Common
Stock during the period - Basic and Diluted |
100,110,440 | 100,000,000 | |||||||
F-3
(See accompanying notes to financial statements)
DLD GROUP, INC.
(Formerly known as EWRX INTERNET
SYSTEMS INC.)
(A Development Stage Company)
Statement of Changes in Stockholders'
Deficiency
for the period (January 1, 2002) Re-entering the
Development
Stage Through to December 31, 2013
| Earnings | ||||||||||||||||||||||||
| Accumulated | Accumulated | |||||||||||||||||||||||
| Additional | During the | Other | Total | |||||||||||||||||||||
| Number of | Capital | Preferred | Paid-in | Accumulated | Development | Comprehensive | Stockholders' | |||||||||||||||||
| Shares | Stock | Stock | Capital | Deficit | Stage | Loss | Deficiency | |||||||||||||||||
| Balance, December 31, 2001 | 20,704,140 | $ | 20,704 | $ | - | $ | 6,967,848 | $ | (8,496,144 | ) | $ | - | $ | - | $ | (1,507,592 | ) | |||||||
| Stock issued on settlement of debt | 1,276,227 | 1,276 | - | 197,872 | - | - | - | 199,148 | ||||||||||||||||
| Stock issued on Flashback purchase | 3,700,000 | 3,700 | - | - | - | - | - | 3,700 | ||||||||||||||||
| Stock issued on private placement | 445,900 | 446 | - | 44,144 | - | - | - | 44,590 | ||||||||||||||||
| Finance fee | - | - | - | (9,590 | ) | - | - | - | (9,590 | ) | ||||||||||||||
| Net loss | - | - | - | - | - | (71,799 | ) | - | (71,799 | ) | ||||||||||||||
| Balance, December 31, 2002 | 26,126,267 | 26,126 | - | 7,200,274 | (8,496,144 | ) | (71,799 | ) | - | (1,341,543 | ) | |||||||||||||
| Stock issued on | - | |||||||||||||||||||||||
| settlement of debt | 40,000,000 | 40,000 | - | - | - | - | - | 40,000 | ||||||||||||||||
| Net loss | - | - | - | - | - | (19,342 | ) | - | (19,342 | ) | ||||||||||||||
| Balance, December 31, 2003 | 66,126,267 | 66,126 | - | 7,200,274 | (8,496,144 | ) | (91,141 | ) | - | (1,320,885 | ) | |||||||||||||
| Stock issued on | - | |||||||||||||||||||||||
| settlement of debt | 33,873,733 | 33,874 | - | (12,558 | ) | - | - | - | 21,316 | |||||||||||||||
| Net income | - | - | - | - | - | 1,030,812 | - | 1,030,812 | ||||||||||||||||
| Balance, December 31, 2004 | 100,000,000 | 100,000 | - | 7,187,716 | (8,496,144 | ) | 939,671 | - | (268,757 | ) | ||||||||||||||
| Net loss | - | - | - | - | - | (19,163 | ) | - | (19,163 | ) | ||||||||||||||
| Balance, December 31, 2005 | 100,000,000 | 100,000 | - | 7,187,716 | (8,496,144 | ) | 920,508 | - | (287,920 | ) | ||||||||||||||
| Net income | - | - | - | - | - | 62,506 | - | 62,506 | ||||||||||||||||
| Balance, December 31, 2006 | 100,000,000 | 100,000 | - | 7,187,716 | (8,496,144 | ) | 983,014 | - | (225,414 | ) | ||||||||||||||
| In kind contribution - interest | - | - | - | 19,184 | - | - | - | 19,184 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Net loss | - | - | - | - | - | (112,224 | ) | - | (112,224 | ) | ||||||||||||||
| Balance, December 31, 2007 | 100,000,000 | 100,000 | - | 7,278,900 | (8,496,144 | ) | 870,790 | - | (246,454 | ) | ||||||||||||||
| In kind contribution - interest | - | - | - | 24,117 | - | - | - | 24,117 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Net loss | - | - | - | - | - | (131,538 | ) | - | (131,538 | ) | ||||||||||||||
| Balance, December 31, 2008 | 100,000,000 | 100,000 | - | 7,375,017 | (8,496,144 | ) | 739,252 | - | (281,875 | ) | ||||||||||||||
| Net loss | - | - | - | - | - | (126,511 | ) | - | (126,511 | ) | ||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | (893 | ) | (893 | ) | ||||||||||||||
| Total comprehensive loss | (127,404 | ) | ||||||||||||||||||||||
| In kind contribution - interest | - | - | - | 29,244 | - | - | - | 29,244 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Balance, December 31, 2009 | 100,000,000 | 100,000 | - | 7,476,261 | (8,496,144 | ) | 612,741 | (893 | ) | (308,035 | ) | |||||||||||||
| Net loss | (119,861 | ) | (119,861 | ) | ||||||||||||||||||||
| In kind contribution - interest | - | - | - | 33,725 | - | - | - | 33,725 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Balance, December 31, 2010 | 100,000,000 | 100,000 | - | 7,581,986 | (8,496,144 | ) | 492,880 | (893 | ) | (322,171 | ) | |||||||||||||
| Net loss | (42,360 | ) | (42,360 | ) | ||||||||||||||||||||
| In kind contribution - interest | - | - | - | 37,215 | - | - | - | 37,215 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Forgiveness of debt officer | - | - | - | 228,029 | - | - | - | 228,029 | ||||||||||||||||
| Balance, December 31, 2011 | 100,000,000 | 100,000 | - | 7,919,230 | (8,496,144 | ) | 450,520 | (893 | ) | (27,287 | ) | |||||||||||||
| Net loss | (128,214 | ) | (128,214 | ) | ||||||||||||||||||||
| In kind contribution - interest | - | - | - | 906 | - | - | - | 906 | ||||||||||||||||
| In kind contribution - services | - | - | - | 72,000 | - | - | - | 72,000 | ||||||||||||||||
| Forgiveness of debt officer | - | - | - | 8,828 | - | - | - | 8,828 | ||||||||||||||||
| Contributed capital by former officer | - | - | - | 37,042 | - | - | - | 37,042 | ||||||||||||||||
| Comprehensive income | - | - | - | - | - | 893 | 893 | |||||||||||||||||
| Contributed capital by director | - | - | - | 32,623 | - | - | - | 32,623 | ||||||||||||||||
| Balance, December 31, 2012 | 100,000,000 | 100,000 | - | 8,070,629 | (8,496,144 | ) | 322,306 | - | (3,209 | ) | ||||||||||||||
| Stock issued for DTC Depository | 138,016 | 138 | (138 | ) | - | |||||||||||||||||||
| Net loss | (128,470 | ) | (128,470 | ) | ||||||||||||||||||||
| In kind contribution - services | 72,000 | 72,000 | ||||||||||||||||||||||
| Contributed capital by former officer | 1,000 | 1,000 | ||||||||||||||||||||||
| Contributed capital by director | 55,867 | 55,867 | ||||||||||||||||||||||
| Balance, December 31, 2013 | 100,138,016 | $ | 100,138 | - | $ | 8,199,358 | $ | (8,496,144 | ) | $ | 193,836 | $ | - | $ | (2,812 | ) |
(See accompanying notes to financial statements)
F-4
DLD GROUP, INC.
(Formerly known as EWRX
Internet Systems, Inc.)
(A Development Stage Company)
Statements of Cash Flows
| Period from | |||||||||
| (Re-entering the | |||||||||
| Development | |||||||||
| For the Years | Stage) | ||||||||
| 2013 | 2012 | 2013 | |||||||
| Cash Flows from Operating Activities | |||||||||
| Net (loss) income | $ | (128,470 | ) | $ | (128,214 | ) | $ | 193,836 | |
| Adjustments to
reconcile net income/(loss) to net cash used in operations |
|||||||||
| Depreciation | 904 | 524 | 1,428 | ||||||
| Non-cash item - expenses recovered | - | - | (1,142,152 | ) | |||||
| Forgiveness of debt | - | (1,662 | ) | (98,956 | ) | ||||
| In kind contribution services | 72,000 | 72,000 | 504,000 | ||||||
| Imputed interest on loans | - | 906 | 144,391 | ||||||
| Changes in operating assets and liabilities | |||||||||
| Increase/(Decrease) in accounts payable and accrued liabilities | (732 | ) | (10,851 | ) | 15,252 | ||||
| Net Cash Used in Operating Activities | (56,298 | ) | (67,297 | ) | (382,201 | ) | |||
| Cash Flows for Investing Activities | |||||||||
| Acquisition of capital assets | - | (3,982 | ) | (3,982 | ) | ||||
| Net cash used in Investing Activities | - | (3,982 | ) | (3,982 | ) | ||||
| Cash Flows from Financing Activities | |||||||||
| Settlement of debt by director | - | - | 19,113 | ||||||
| Proceeds from issuance of common stock | - | - | 38,700 | ||||||
| Loans from related parties | - | - | 68,718 | ||||||
| Repayment of loans from directors | - | - | (1,623 | ) | |||||
| Repayment of loans from related parties | - | - | (60,092 | ) | |||||
| Contributed capital | 56,867 | 70,558 | 321,734 | ||||||
| Net Cash Provided by Financing Activities | 56,867 | 70,558 | 386,550 | ||||||
| Effect of exchange rate changes on cash and | |||||||||
| cash equivalents | - | 290 | 202 | ||||||
| Net increase (decrease) in cash | 569 | (431 | ) | 569 | |||||
| Cash, beginning of period/year | - | 431 | - | ||||||
| Cash, end of period/year | $ | 569 | $ | - | $ | 569 | |||
| Supplemental Information: | |||||||||
| Cash paid for interest | $ | - | $ | - | $ | 36,476 | |||
| Cash paid for taxes | $ | - | $ | - | $ | - | |||
F-5
(See accompanying notes to financial statements)
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
As of December 31,
2013 and 2012
| 1. | Summary of Significant Accounting Policies and Organization |
|
| (A) | Basis of Presentation and Organization |
|
DLD Group, Inc. (Formerly known as EWRX Internet Systems, Inc.) (the Company) was incorporated on June 25, 1997 in the State of Nevada. The Company re-entered the development stage on January 1, 2002. The Company is working to acquire a company that focuses on exporting US made products to China via an online shopping service platform. |
||
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for financial information. |
||
Activities since re-entering the development stage have been comprised mainly of administrative matters. |
||
| (B) | Furniture and Equipment |
|
Furniture and equipment assets are stated at cost. Amortization is provided on the declining balance method as follow: |
||
| Furniture | 20% |
| Computer | 30% |
| (C) | Cash and Cash Equivalents |
|
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. |
||
As of December 31, 2013 and December 31, 2012, the Company had no cash equivalent. |
||
| (D) | Use of Estimates |
|
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reported period. Significant estimates include the valuation of deferred taxes and the valuation of in kind contribution of services and interest. Actual results could differ from those estimates. |
||
| (E) | Revenue Recognition |
|
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is assured. The company had no revenue for the years ended December 31, 2013 and 2012. |
F-6
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
As of December 31,
2013 and 2012
| 1. | Summary of Significant Accounting Policies and Organization (continued) |
|
| (F) | Fair Value of Financial Instruments |
|
The carrying amounts of the Company's financial instruments including accounts payable and accrued liabilities approximate their fair value due to the relatively short period to maturity for these instruments. |
||
| (G) | Income/(Loss) Per Share |
|
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, Earnings per Share. As of December 31, 2013 and 2012, respectively, there were no common share equivalents outstanding. |
||
| (H) | Income Taxes |
|
The Company accounts for income taxes under the FASB Accounting Standards Codification Topic 740, Income taxes. Under Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB Accounting Standards Codification Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Internal Revenue Code Section 382 ("Section 382") imposes limitations on the availability of a company's net operating losses after certain ownership changes occur. The Section 382 limitation is based upon certain conclusions pertaining to the dates of ownership changes and the value of the Company on the dates of the ownership changes. It was determined that an ownership change occurred in July 2012. The amount of the Company's net operating losses incurred prior to the ownership change is limited based on the value of the Company on the date of the ownership change. Management has not determined the amount of net operating losses generated prior to the ownership change available to offset taxable income subsequent to the ownership change. |
||
| (I) | Business Segments |
|
The Company operates in one segment and therefore segment information is not presented. |
||
| (J) | Recent Accounting Pronouncements |
|
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, did not, or are not believed by the management to have a material impact on the Company's present or future financial statements. |
||
F-7
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
As of December 31,
2013 and 2012
| 2. | Going Concern |
As reflected in the accompanying financial statements, the Company is in the development stage with no operations, a net loss of $128,470 for the year ended December 31, 2013, a stockholder's deficiency of $2,812 and a working capital deficiency of $5,366 as of December 31, 2013, and cash used in operations from re-entering the development stage of $382,201. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern has been, and remains, dependent on advances from its stockholders and the Company's ability to raise additional capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
|
| 3. | Furniture and Equipment |
| 2013 | 2012 | ||||||||||||
| Accumulated | Net Cost | Net Cost | |||||||||||
| Cost | Depreciation | Value | Value | ||||||||||
| $ | $ | $ | $ | ||||||||||
| Furniture | 1,476 | 413 | 1,063 | 1,328 | |||||||||
| Computer | 2,506 | 1,015 | 1,491 | 2,130 | |||||||||
| 3,982 | 1,428 | 2,554 | 3,458 |
Depreciation expense for December 31, 2013, 2012, and for the period from January 1, 2002 (re-entering the development stage) to December 31, 2013 was $904, $524 and $1,428, respectively. |
|
| 4. | Related Party Transactions |
As of December 31, 2012, Navitex Technology, Inc., a company which is controlled by one of the former stockholders of the Company forgave $8,828 of loan. This amount was recorded as additional paid in capital in 2012 (See Note 5(d)). These loans have no fixed terms of repayment, are unsecured, and bear no interest. During the year ended December 31, 2013 and 2012, the Company imputed interest on these loans of $Nil and $906, respectively. |
|
On the above transaction, the Company imputed interest at a rate of 16.67% which is comparable to past borrowings. |
|
On June 30, 2012 the former officer and director forgave $6,726 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2012. (See Note 5(d)) |
|
On July 26, 2012, the former officer and director paid off $31,209 of liabilities. The amount paid off was recorded as additional paid in capital in 2012. (See Note 5(d)) |
F-8
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
As of December 31,
2013 and 2012
| 4. | Related Party Transactions (continued) |
During the year ended December 31, 2012, the director paid $32,623 of expenses on behalf of the Company. The amount paid was recorded as additional paid in capital in 2012. (See Note 5(d)) |
|
During the year ended December 31, 2013, the President contributed $1,000 of cash to the Company. The amount contributed was recorded as additional paid in capital in 2013. (See Note 5(d)) |
|
During the year ended December 31, 2013, a related party paid $55,867 of expenses on behalf of the Company. The amount paid was recorded as additional paid in capital in 2013. (See Note 5(d)) |
|
| 5. | Stockholders' Deficiency |
| (A) | Common Stock Issued for Purchase of Software |
|
During 2002, the Company issued 3,700,000 shares of common stock in association with the purchase of computer software. In association with the purchase of the software, the Company has agreed to pay the seller a royalty fee of 7% of gross sales. As of December 31, 2013, the Company has not made any sales of the software that would result in the payment of a royalty fee. |
||
| (B) | Common Stock Issued for Debt |
|
During 2002, the Company issued 1,276,227 shares of common stock in order to settle debt amounting to $199,148. ($0.1560 per share) |
||
During 2003, the Company issued 40,000,000 shares of common stock in order to settle debt amounting to $40,000. ($0.0010 per share) |
||
During 2004, the Company issued 33,873,733 shares of common stock in order to settle debt amounting to $21,316. ($0.0006 per share) |
||
| (C) | Common Stock Issued for Cash |
|
During 2002, the company issued 445,900 shares of common stock for $44,590 in conjunction with a private placement offer less a finance fee of $9,590 for a net cash value of $35,000. ($0.0785 per share) |
||
During 2013, the Company issued 138,016 common shares to the Depository Trust Company due to a discrepancy as to how many shares were deposited with the Depository Trust Company. The dispute arose from the reconciliation of the company's ledger pursuant to the unauthorized issuance of shares by the former management of the Company in April 2006. The 138,016 shares were issued to reconcile the books and records of the Deposit Trust Company. The transaction was recorded at par value with a corresponding debit to additional paid in capital since it was treated as a capital transaction. |
F-9
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
As of December 31,
2013 and 2012
| 5. | Stockholders' Deficiency (continued) |
|
| (D) | In-kind Contribution |
|
During 2007, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president. |
||
During 2007, the Company recorded additional paid-in capital of $19,184 for the imputed interest on loans. |
||
During 2008, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president. |
||
During 2008, the Company recorded additional paid-in capital of $24,117 for the imputed interest on loans. |
||
During 2009, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president. |
||
During 2009, the Company recorded additional paid-in capital of $29,244 for the imputed interest on loans from related party. (see Note 4) |
||
During 2010, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president. |
||
During 2010, the Company recorded additional paid-in capital of $33,725 for the imputed interest on loans from related parties. (see Note 4) |
||
During 2011, the Company recorded additional paid-in capital of $72,000 for fair value of services provided by the Company by its president. |
||
During 2011, the Company recorded additional paid-in capital of $37,215 for the imputed interest on loans from related parties. (see Note 4) |
||
In December 2011, the officer and director forgave $228,029 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2011. |
||
During 2012, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president. |
||
During 2012, the Company recorded additional paid-in capital of $906 for the imputed interest on the advances from a director and note payable - related party. |
||
On June 30, 2012, the former officer and director forgave $6,726 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2012. |
||
On July 26, 2012, the former officer and director paid off $31,209 of liabilities. The amount paid off was recorded as additional paid in capital in 2012. |
||
During 2012, the director paid $32,623 of expenses on behalf of the Company. The amount paid was recorded as additional paid in capital in 2012. |
||
F-10
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 2013
and 2012
| 5. | Stockholders' Deficiency (continued) |
|
| (D) | In-kind Contribution (continued) |
|
During the year ended December 31, 2013, a related party paid $55,867 of expenses on behalf of the Company. The amount paid was recorded as additional paid in capital in 2013. (See Note 4) |
||
During the year ended December 31, 2013, the President contributed $1,000 of cash to the Company. The amount contributed was recorded as additional paid in capital in 2013. (See Note 4) |
||
During 2013, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its officer. |
||
| (E) | Amendment to Articles of Incorporation |
|
During 1999, the Company amended its Articles of Incorporation to change the name of the corporation and provide for an increase in its authorized share capital. The name of the Company was changed from Europa Resources, Inc. to EWRX Internet Systems, Inc. The authorized capital stock increased to 100,000,000 common shares at a par value of $0.001 per share. |
||
During 2009, the Company amended its Articles of Incorporation to increase the authorized capital stock to 200,000,000 common shares at a par value of $0.001 per share. |
||
During 2012, the company amended its Articles of Incorporation to change the name of the corporation. The name was changed from EWRX Internet Systems, Inc. to DLD Group, Inc. |
||
F-11
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 2013
and 2012
| 6. | Income Taxes |
The Company accounts for income taxes under the FASB Accounting Standards Codification Topic 740, Income taxes. Under Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB Accounting Standards Codification Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
|
The provision for income taxes has been computed as follows: |
| 2013 | 2012 | ||||||
| $ | $ | ||||||
| Expected income tax recovery (expense) at the statutory rate of 34% | 43,680 | 43,592 | |||||
| Tax effect of expenses that are not deductible for income
tax purpose (net of other amounts deductible for tax purposes) |
(24,680 | ) | (24,365 | ) | |||
| Change in valuation allowance | (19,000 | ) | (19,227 | ) | |||
| Provision for income taxes | - | - |
The components of deferred income taxes are as follows:
| 2013 | 2012 | ||||||
| $ | $ | ||||||
| Deferred income tax asset: | |||||||
| Net operating loss carryforwards | 2,436,803 | 2,417,803 | |||||
| Valuation allowance | (2,436,803 | ) | (2,417,803 | ) | |||
| Deferred income taxes | - | - |
The Company has tax losses available to be applied against future taxable income through 2033 and 2032, respectively. The net change in the valuation allowance for the years ended December 31, 2013 and 2012 was an increase of $19,000 and $19,227 respectively. Due to the losses incurred in the current year and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carryforward will not be realized through the reduction of future income tax payments. Accordingly, a 100% valuation allowance has been recorded for the deferred income tax asset.
The Organization's income tax returns for years 2010 - 2013 are currently open for review by statute by the Internal Revenue Service. However, there are no examinations currently in progresses and the Company is not aware of any pending audits. The Company has filed all income tax returns.
F-12
DLD GROUP, INC.
(Formerly known as EWRX Internet
Systems, Inc.)
(A Development Stage Company)
Notes to Financial Statements
December 31, 2013
and 2012
| 7. | Forgiveness of Debt |
The Company has certain accounts payables which have been outstanding since 2005 when the Company became dormant. The company policy has been to write off these debts as they become unenforceable, generally after the six year statute of limitations has been reached. |
|
On June 30, 2012, the company has written off $1,662 in accounts payable and recorded them as Forgiveness of Debt in other expenses. |
|
| 8. | Subsequent Events |
Subsequent to December 31, 2013, a related party paid expenses amounted to $2,500 on behalf of the Company. |
|
| On January 10, 2014, the Company's Board of Directors approved a 1,000-for-1 reverse stock split of the outstanding common stock. The reverse stock split is subject to stockholder and FINRA approval. As of March 14, 2014, the reverse stock split has not been reflected in the financial statements and footnotes. |
F-13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer (the Company's principal executive officer and interim principal accounting officer), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company's Chief Executive Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company's management and board regarding the preparation and fair presentation of published financial statements, but 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 assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2013. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of December 31, 2013, the Company's internal control over financial reporting was effective for the purposes for which it is intended.
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 the Company to provide only management's report in this annual report.
6
Changes in Internal Control over Financial Reporting
No changes were made to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following chart lists all of the Officers of the Company and their respective ages, position and term of service.
| Name | Age | Position |
| Fenglin Wang | 58 | Chairman and President |
| Wenyi Yu | 50 | Director |
| Wenyong Wang | 32 | Director |
| Fang Wang | 27 | Director |
| Keren Zhao | 47 | Chief Executive Officer |
Mr. Fenglin Wang, 58, Chairperson of the Board of Directors, Director and President. In 2008, Mr. Wang founded and is Chairman of Dianliandian (DLD) Discount Shopping Service Network, a leading online, discount shopping service, based in Zhengzhou City, China. Working with some of the China’s leading corporations, including China Mobile Corporation, Agriculture Bank of China and others, DLD has expanded to 200 branches, employs approximately 1,600 people throughout China and is a leading discount shopping platform in China. DLD is now expanding into the United States.
Dr. Wenyi Yu, 50, Director, received a Doctorate Degree in Economics from the Management School, Fudan University, Shanghai, China in 1993 with a concentration in Finance, Business Administration and Strategic Planning. From 1993 -1997, Dr. Yu was a lecturer in business administration at Tsinghua University, Beijing and also visiting scholar at The University of Hong Kong. From 1997 – 2004, Dr. Yu served as General Manager of Xinghuo Investment Corporation, Ministry of Geography & Mineral Resources of the People’s Republic of China, Director and shareholder of UFSOFT Management Institute, UFSOFT Group Corporation, a top financial software company located in China, Vice director of Department of Capital Operation of China National Petroleum Corporation and Post-doctorate of Fudan University, Shanghai, respectively; from 2004 to the present, Dr. Yu has served as Senior Research Professor, Cultural Industries Institute, Peking University, Beijing, China and consultant for both central government and business banks of China. Since September 2011, Dr. Yu has been a visiting scholar at Buffalo State College, State University of New York. Dr. Yu is currently a representative of International Dianliandian ShopsNetwork Science & Technology Corporation, NYS.
Mr. Wenyong Wang, 32, Director, and son of Mr. Fenglin Wang, Chairperson of the Board of Directors, Director and President, received a Master Degree in Computer Science, in 2007, from Henan Financial College. Since 2006, Mr. Wenyong Wang has held the position of General Manager, Net Power Science & Technology Corporation. Since 2008, Mr. Wang has been Vice President of Zhengzhou Sanxinweiye Science & Technology Corporation and since January 2012 has served as Director of International Dianliandian ShopsNetwork Science & Technology Corporation, NYS and provides technological support of the DLD service software platform.
7
Ms. Fang Wang, 27, Director, is the daughter of Mr. Fenglin Wang, Chairperson of the Board of Directors, Director and President of the Registrant. Ms. Wang received a Bachelor of International Business from Tianjin Foreign Trade Training College in 2009 with a concentration in Financial Management. Since, July 2009, Ms. Wang has been a Director, owner and the Financial Manager of Dianliandian Science & Technology Corporation and since January 2012 has served as Director of International Dianliandian ShopsNetwork Science & Technology Corporation, NYS.
Ms. Keren Zhao, 47, Chief Executive Officer, wife of Dr. Wenyi Yu. In 1997, Ms. Zhao received a Master Degree in Management Engineering from Tsinghua University Beijing, China with a concentration in Business Administration and Marketing. Between 2008 and 2009, Ms. Zhao was a consultant to the research project of Development Strategy Research on Beijing Jingdu Culture Investment Corporation, Beiing, a state-owned corporation charged with preserving the culture, heritage and rehabitation of Old Beijing -- South Beijing. During 2009, Ms. Zhao also was a consultant to the Humanitarian Beijing and Finance Plan Research Report, Beijing Finance Bureau, Beijing Municipal Government, PRC. From January 2010 – present, Ms. Zhao has served as President and Director of Beijing Hehetianyi Culture Development LLC; from March 2011 to the present, Ms. Zhao has served as Vice President of Zhongmingxin Investment Corporation, a company developing a large industrial park near Beijing, China; and from May 2012, Ms. Zhao has been the Chief Executive Officer of International Dianliandian ShopsNetwork Science & Technology Corporation, NYS.
Employment Agreements
We currently do not have employment agreements with our officers and directors.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
Mr. Fenglin Wang is father of Mr. Wenyong Wan and Ms. Fang Wang. Dr. Wenyi Yu is spouse of Ms. Keren Zhao.
Involvement in Certain Legal Proceedings
To our knowledge, during the past ten (10) years, none of our directors, executive officers, promoters, control persons, or nominees has been:
- the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
- convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
- subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
- found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
8
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership with the SEC. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during its most recent fiscal year, each person who, at the time during the most recent fiscal year, was a director, executive officer and beneficial owners of more than 10% of the common stock of the Company, has complied with all Section 16(a) filing requirements with respect to the fiscal year ended December 31, 2013, other than as set forth below.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.
Board Committees
Our Board of Directors has no separate committees and our Board of Directors acts as the audit committee and the compensation committee. We do not have an audit committee financial expert serving on our Board of Directors. Potential Conflicts of Interest
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the fiscal years ended December 31, 2013 and 2012 in all capacities for the accounts of our executives:
Summary Compensation Table
| Non-Qualified | |||||||||
| Non-Equity | Deferred | All Other | |||||||
| Name and | Stock | Option | Incentive Plan | Compensation | Compensation | Totals | |||
| Principal | Salary | Bonus | Awards | Awards | Compensation | Earnings | |||
| Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Fenling Wang, President and Chairman |
2013 2012 |
$ 0 $ 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
$ 0 $ 0 |
| Keren Zhao, Chief Executive Officer |
2013 2012 |
$ 0 $ 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
$ 0 $ 0 |
| Jessica Q. Wang,(1) Former President and Chief Executive Officer |
2013 2012 |
$ 0 $ 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
$ 0 $ 0 |
(1) Jessica Q. Wang resigned as President and Chief Executive Officer on July 19, 2012.
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No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees. We had no options outstanding as of December 31, 2013.
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
Employment Agreements
We do not have any employment agreements with our officers or directors currently.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Beneficial ownership is determined in accordance with the rules of the SEC. Generally, a person is considered to beneficially own securities: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, and (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). For purposes of computing the percentage of outstanding shares held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of March 14, 2014 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise indicated below, the address of each person listed in the table below is c/o 25 Fordham Drive, Buffalo, New York 14216.
| Amount and Nature of | ||||||
| Beneficial Ownership | ||||||
| Common Stock (1) | ||||||
| No. of | ||||||
| Name and Address of Beneficial Owner | Shares | % of Class | ||||
| Directors and Officers | ||||||
| Fenglin Wang, Chairman and President | 65,923,733 | (2) | 65.84% | |||
| Keren Zhao, Chief Executive Officer | 0 | 0.00% | ||||
| Wenyi Yu, Director | 3,000,000 | 3.00% | ||||
| Wenyong Wang, Director | 3,000,000 | 3.00% | ||||
| Fang Wang, Director | 2,500,000 | 2.50% | ||||
| All officers and directors as a group (5 persons) | 74,423,733 | 74.34% | ||||
| 5% Security Holders | ||||||
| Fenglin Wang, Chairman and President | 65,923,733 | 65.84% | ||||
| (1) |
Based on 100,138,016 shares of common stock issued and outstanding as of March 14, 2014. |
| (2) |
Includes (i) 923,733 shares of common stock held by Dianliandian Shops Network Science & Technology Corporation, of which Mr. Fenglin Wang is the President, Chief Executive Officer, Chairman and owner and thus has voting and dispositive control over securities held by it. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Except as disclosed below, there have been no transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year end for the last two completed fiscal years:
During the year ended December 31, 2013, Mr. Fenglin Wang, our President contributed $1,000 of cash to the Company. The amount contributed was recorded as additional paid in capital in 2013.
During the year ended December 31, 2013, a related party paid $55,867 of expenses on behalf of the Company. The amount paid was recorded as additional paid in capital in 2013.
Subsequent to December 31, 2013, a related party paid expenses amounted to $2,500 on behalf of the Company.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
For the Company's fiscal years ended December 31, 2013 and December 31, 2012, we were billed approximately $12,350 and $17,200 for professional services rendered for the audit and reviews of our financial statements.
Audit Related Fees
The Company did not incur any audit related fees, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended December 31, 2013 and December 31, 2012.
Tax Fees
For the Company's fiscal years ended December 31, 2013 and December 31, 2012, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.
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All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2013 and December 31, 2012.
Pursuant to the requirements of 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.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
- approved by our audit committee; or
- entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and pre-approved by the entire board of directors before the respective services were rendered.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
a) Documents filed as part of this Annual Report
| 1. |
Financial Statements |
| 2. |
Financial Statement Schedules |
| 3. |
Exhibits |
| Exhibit | Title of Document |
| No. | |
| 3.1 |
Certificate of Amendment to Articles of Incorporation as accepted by the Secretary of State for the State of Nevada on October 9, 2012, incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on November 6, 2012. |
| 10.1 |
Common Stock Purchase Agreement dated July 3, 2012, incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 23, 2012. |
| 31.1 | |
| 32.1 | |
| 101.INS |
XBRL Instance Document |
| 101.SCH |
XBRL Taxonomy Extension Schema Document |
| 101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB |
XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document. |
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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.
DLD GROUP, INC.
By:/s/ Keren
Zhao
Keren Zhao
Chief Executive Officer
(Duly Authorized Officer,
and Principal Executive Officer and interim Principal Financial Officer)
Dated: March 14, 2014
Pursuant to the requirements of 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/ Fenglin Wang | President and Chairman | March 14, 2014 | |
| FenglinWang | |||
| /s/ Wenyi Yu | Director | March 14, 2014 | |
| WenyiYu | |||
| /s/ Wenyong Wang | Director | March 14, 2014 | |
| WenyongWang | |||
| /s/ Fang Wang | Director | March 14, 2014 | |
| FangWang | |||
| /s/ Keren Zhao | Chief Executive Officer | March 14, 2014 | |
| KerenZhao | (Principal Executive Officer and | ||
| interim | |||
| Principal Financial Officer) |
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