Attached files
| file | filename |
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| EX-31.1 - CERTIFICATION - AFF Holding Group Inc. | domain_10k-ex3101.htm |
| EX-32.2 - CERTIFICATION - AFF Holding Group Inc. | domain_10k-ex3202.htm |
| EX-32.1 - CERTIFICATION - AFF Holding Group Inc. | domain_10k-ex3201.htm |
| EX-31.2 - CERTIFICATION - AFF Holding Group Inc. | domain_10k-ex3102.htm |
| EX-10.3 - SERVICE AGREEMENT - AFF Holding Group Inc. | domain_10k-ex1003.htm |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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, 2016
/_/ 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.) |
36, JALAN SERI UTARA 3/3C, KIPARK AVENUE
OFF JALAN IPOH, 68100 KUALA LUMPUR
WILAYAH PERSEKUTUAN, MALAYSIA
(Address of Principal Executive Offices)
+603 6241 2023 / +603 6242 1028
(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 ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☐ | 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 $8,797 as of June 30, 2016 (the registrant’s most recently completed second quarter), based upon total outstanding shares as of such date of 179,522,531, of which 87,966,037 shares were held by non-affiliates. As of June 30, 2016, the last transacted price of the registrant was US$0.0001 per share.
As of March 1, 2017, there were 179,522,531 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.
TABLE OF CONTENTS
| i |
Forward Looking Statements
The discussion contained in this Annual Report on Form 10-K under the Securities Exchange Act of 1934, as amended, contains forward-looking statements that involve risks and uncertainties. The registrant’s actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “the Company believes,” “management believes” and similar language, including those set forth in the discussions under “Risk Factors,” “Notes to Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as those discussed elsewhere in this Form 10-K. Statements contained in this Form 10-K that are not historical facts are forward-looking statements that are subject to the “safe harbor” created by the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this Annual Report speak only as of the date of filing with the SEC and might not occur in light of these risks, uncertainties, and assumptions. The registrant undertakes no obligation and disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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| ITEM 1. | BUSINESS |
Overview
We were incorporated in the State of Nevada in January 2006 and are a development stage company. Our business is to develop and operate Internet websites and applications on mobile platforms. We earn revenues through advertisements sold on these websites and applications. Our goal is to become a major network of consumer-based websites and applications targeting viewers in the Hong Kong and Greater China Basin with contents on travel, food, entertainment, activities and city life. As of the date of this Annual Report, we have launched the website www.drinkeat.com, which provides reviews of restaurants in Hong Kong.
We plan to develop additional websites and solicit advertisement for those websites through third-party agents. Presently, we own the following domain names: www.domainextremes.com and www.drinkeat.com.
We are a controlled corporation with the substantial majority of our shares held by Mi1 Global Limited (“Mi1”), a company registered in the Republic of Vanuatu. Mi1 acquired a 51% stake in our company in February 2016. As a result, there can be no assurance that our business and/or our strategy will not change over time as a result of Mi1’s interest.
Our Business
We are an active developer and operator of lifestyle-centered websites and mobile platform applications in the Hong Kong and Greater China Basin. We intend to build content centered on travel, food, city life and entertainment in the region.
Our content is delivered through internet-connected browser-based devices such as personal computers, laptops and mobile devices. As a result, our content is available globally and our distribution is potentially unlimited in breadth. Thus, while our primary market focus is Hong Kong and the Greater China Basin, we are able to reach those consumers and content providers around the world who have an interest in this region.
Our site www.drinkeat.com, also known as Hong Kong Restaurant Review, provides reviews on Hong Kong restaurants. We invite food critics to contribute review articles on restaurants in Hong Kong either for a small fee or by obtaining their consent to post a previously printed article without charge. Reviews are written in Chinese for the general public in Hong Kong and Chinese tourists who plan to visit Hong Kong. Contributors are paid a nominal fee on a per-article basis either in cash, if available, or through the issuance of shares in the Company. We rely on five active individual contributors to provide reviews, although we do not have formal agreements with any. There are several websites providing similar reviews on Hong Kong restaurants.
We will gradually develop other websites utilizing domain names we currently own or develop or acquire in the future. We plan to solicit advertisements through third party agents. Depending on the nature of the content of the websites, prospective advertisers include restaurants, hotels, travel agents, department stores and retail outlets. We also include pay-per-click advertisements in our websites. Our hope is that when our network of websites has increased to at least five, we will be able to attract and retain more traffic, redirecting users to other websites in our network.
We have contracted with programming firms in Hong Kong and China to develop websites for our network. Once a domain name and theme have been decided by our directors, we contact potential development firms for initial discussion regarding our proposal. Our directors maintain close contact with the programming firms during development of the website and conduct testing throughout the development process. Additionally, we intend to carry out enhancements on our websites from time to time based upon member feedback.
We will continue to develop lifestyle applications on iPhone and other mobile platforms.
| 1 |
Our Strategy
In order to develop our platform, we intend to:
| · | Promote our existing websites to increase readership, popularity and site-loyalty through on-line advertisements, principally through search advertising and banner advertisements; |
| · | Launch a public relations campaign, through print and other media, to promote our websites; |
| · | Develop banner exchange programs with other websites; |
| · | Recruit additional writers and contributors to enhance and update site content to maintain the relevance of the information, as well as free-lance writers to publicize sites in related forums; |
| · | Utilize consultants to optimize search engines in order to enhance and maintain website ranking; |
| · | Expand the network through the application of new domain names, as well as the acquisition of websites and forums targeting the same consumer base; |
| · | Develop additional lifestyle-related mobile phone applications for iPhone and, where appropriate, other mobile platforms, and promote them using online key word search advertisements; and |
| · | Generate revenue from user fees and online advertising income at space provided in mobile phone applications. |
| · | As noted above, we are a controlled corporation and there can be no assurance that our principal shareholder, Mi1 Global Limited, will not change our business or our strategy in the future. |
Competition
We face intense competition from other online content providers who also offer lifestyle information services. These providers are not necessarily based in the Hong Kong or Greater China Basin region, but may be based anywhere in the world given the availability of the internet. We also face competition from new technologies that could potentially make demand for our website services outdated or inconvenient.
Intellectual Property
We rely on a combination of trademarks, trade secrets and contract law rights in order to protect our brand, intellectual property assets and confidential or proprietary information (our “Proprietary Rights”). Our Proprietary Rights are among the most important assets we possess and we depend significantly on these Proprietary Rights in being able to effectively compete in our industry. We cannot be certain that the precautions we have taken to safeguard our Proprietary Rights will provide meaningful protection from the unauthorized use by others. If we must pursue litigation in the future to enforce or otherwise protect our Proprietary Rights, or to determine the validity and scope of the rights of others, we may not prevail and will likely have to make substantial expenditures and divert valuable resources in the process. Moreover, we may not have adequate remedies if our Proprietary Rights are appropriated or disclosed.
We hold Proprietary Rights to our domain names and, as we develop and acquire content for our sites, we intend to make trademark and copyright applications as appropriate to protect our intellectual property in Hong Kong and elsewhere as we deem appropriate. As we contract with other parties, including website and content developers and advertisers, we intend to ensure that our content and services do not infringe upon the intellectual property rights of others. As a general matter, to date we have acquired and not licensed rights to content for our websites.
Regulation
There are currently no restrictions in Hong Kong on the dissemination of information through the Internet, except as stipulated in the “Control of Obscene and Indecent Article Ordinance” (COIAO). The contents of our existing websites, and those in development, do not fall into the categories subject to censorship under the COIAO.
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The Hong Kong Government is reviewing the filtering of information on the Internet to protect the youth from accessing obscene material. We do not believe that, even if new laws or regulations are enacted in this regard, our business activities would be affected given our target audience and content. However, if new technical requirements, such as filtering software, are imposed, data transmission speed could adversely be affected.
We are not aware of any regulations in any of the jurisdictions in which we intend primarily offer our content or services that would require us to be licensed to distribute content over the public Internet.
Employees
As of December 31, 2016, we had one full-time employee and four part-time employees taking care of website content development, testing and administrative matters. We intend to add full and part-time employees, as well as consultants, as our network continues to expand.
We are not subject to any collective bargaining agreements and we believe our relationship with our employees is excellent.
Where You Can Find Us
Our principal executive office is located at 36, Jalan Seri Utara 3/3C, Kipark Avenue, Off Jalan Ipoh, 68100 Kuala Lumpur, Wilayah Persekutuan, Malaysia. Our telephone number is +603 6241 2023 and +603 6242 1028. Our website is www.domainextremes.com. The content of our website is not incorporated into, or otherwise considered a part of, this Annual Report.
| ITEM 1A. | RISK FACTORS |
This information is not required of smaller reporting companies.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
Not applicable.
| ITEM 2. | PROPERTIES |
We do not own any property. Our executive offices are located at 36, Jalan Seri Utara 3/3C, Kipark Avenue, Off Jalan Ipoh, 68100 Kuala Lumpur, Wilayah Persekutuan, Malaysia, which is office space that we share with certain other development stage companies. As we continue to grow our business, we may find it necessary to secure separate office space; however, for our current needs the present space is sufficient and cost-efficient.
| ITEM 3. | LEGAL PROCEEDINGS |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
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| ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Market Information
Our common stock is traded on the OTCQB. The last transacted price of our common stock was $0.016 when 200 shares were traded on November 12, 2012. The trading of our common stock is sporadic and we believe that there is no established trading market for our common stock.
Holders
As of December 31, 2016, we had 179,522,531 shares of our common stock issued and outstanding, and held by 764 persons.
In general, pursuant to Rule 144 adopted under the Securities Act of 1933, as amended, a shareholder who owns restricted shares of a company which files periodic reports with the Securities and Exchange Commission and who has a holding period of at least six months, is entitled to sell such shares in accordance with the provisions of Rule 144. In the event the shareholder is a non-affiliate of the issuer, he or she may make unlimited public resales of shares under Rule 144 provided that the current public information requirement is satisfied. A non-affiliate who has a holding period of more than one year, may make unlimited resales of shares without compliance with any other requirement of Rule 144. Persons who are affiliates of the issuer must comply with all requirements of Rule 144 in conjunction with resales of their shares including the current public information requirement, the volume limitations, the manner of sale requirements and the filing of a Form 144. Therefore, the possible sale of our currently outstanding shares pursuant to Rule 144 may, in the future, have a depressive effect on the price of our common stock in the over-the-counter market.
Dividends
We have never declared or paid a dividend on our common stock and, because we have very limited resources and a substantial accumulated deficit, we do not anticipate declaring or paying any dividends on our common stock in the foreseeable future. Rather, we intend to retain earnings, if any, for the continued operation and expansion of our business. It is unlikely, therefore, that the holders of our common stock will have an opportunity to profit from anything other than potential appreciation in the value of our common shares held by them. If you require dividend income, you should not rely on an investment in our common stock.
Equity Compensation Plans
| We do not currently have any equity compensation plans. |
Performance Graph
| This information is not required of smaller reporting companies. |
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
The Company did not issue any shares without registration in 2016.
In November 2015, we issued the following shares of common stock without registration under the Securities Act of 1933, as amended (the “Securities Act”), in lieu of compensation for services rendered:
|
Name |
Number of Shares |
Relationship |
| Francis Bok | 9,473,684 | President (Resigned on April 11, 2016) |
| Stephen Tang | 23,684,211 | Director (Resigned on April 11, 2016) |
| Angel Lai | 1,821,805 | Staff (Resigned on April 11, 2016) |
| 4 |
Such shares were issued to persons reasonably believed by us to be non-U.S. persons, as defined under Regulation S under the Securities Act. The shares issued to the individuals above were sold at a purchase price of approximately $0.0038 per share (an aggregate of $132,923).
Issuer Purchases of Equity Securities.
None.
| ITEM 6. | SELECTED FINANCIAL DATA |
This information is not required of smaller reporting companies.
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements, related notes, and other detailed information included elsewhere in this Annual Report on Form 10-K. Our financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), contemplate that we will continue as a going concern, and do not contain any adjustments that might result if we were unable to continue as a going concern, however, our independent registered public accounting firm has added explanatory paragraphs in Note 1 of each of our audited consolidated financial statements for the fiscal years ended December 31, 2016 and 2015, respectively, raising substantial doubt as to our ability to continue as a going concern. Certain information contained below and elsewhere in this Annual Report on Form 10-K, including information regarding our plans and strategy for our business, constitute forward-looking statements. See "Cautionary Statement Regarding Forward-Looking Statements.”
Overview
We are a development stage company organized under the laws of the State of Nevada in January 2006. Our business is to develop and operate Internet websites and mobile phone applications and we intend to earn revenues through advertisements sold on these websites and mobile platforms. Our goal is to become the largest network of consumer-based websites and iPhone applications and similar mobile platforms targeting viewers in the Hong Kong and Greater China Basin with contents on travel, food, entertainment, activities and city life. We plan to develop additional websites and mobile phone applications. We generate advertising revenues through banner and pay-per-click advertisements, as well as through application user fees.
Results of Operations
Two Years Ended December 31, 2016 and 2015
Net Sales
We generated revenues of $7,538 for the year ended December 31, 2016, compared to $8,292 for fiscal 2015. The decrease in revenue was mainly due to discounts offered to our advertisers. Our principal source of revenues is from advertising banners on our websites. We also intend to generate future revenues from advertising and user fees related to our mobile phone applications.
Net Income (Loss)
We have incurred a net loss of $79,929 in 2016 compared to a net loss of $74,008 in 2015, principally due to a substantial increase in our administrative expenses as discussed below.
We had other income of $11,077 in 2016 and $nil in 2015, attributable to the write-off of accrued director fees and secretary fees.
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We incurred general, administrative and operating expenses of $98,544 in 2016 and $82,300 in 2015. Of these amounts, $nil and $31,500 related to the value of director fees to our directors in each of 2016 and 2015, respectively, in lieu of cash compensation for services rendered. In addition, a substantial portion of our expenses for the year ended December 31, 2016 related to accounting service fees, legal service fees and professional service fees, and for the year ended December 31, 2015 related to accounting service fees and professional service fees.
Taxes
Due to our lack of revenues, we have not incurred any tax obligations since inception. However, we would anticipate that income tax obligations will arise as we begin to generate significant revenue in the future.
Liquidity and Capital Resources
At December 31, 2016, we had cash and cash equivalents of $7,833, compared to $39 at December 31, 2015, an increase of $7,794. This increase is principally due to the increase in cash provided in operation.
Currently, we have limited operating capital. We expect that our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and the revenues, if any, generated from our business operations alone may not be sufficient to fund our operations or planned growth. We will likely require additional capital to continue to operate our business, and to further expand our business.
We expect our cash flow needs over the next 12 months to be approximately $80,000. However, this amount may be materially increased if market conditions are favorable for a more rapid expansion of our business model or if we adjust our model to exploit strategic acquisition opportunities. In addition, we may require additional cash flow to support our public company reporting requirements in the United States. Although our average monthly expenditures to date have averaged less than $6,700, we expect this rate to increase exponentially as our business expands. To date, we have been financed principally by our directors; however, we expect to secure third party financing or bank loans as necessary until we secure sufficient revenues, principally from advertisers on our websites, to sustain our ongoing operations.
Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means. Our inability to raise additional funds when required may have a negative impact on our operations, business development and financial results.
Off-Balance Sheet Arrangements
As of December 31, 2016, we did not have any off-balance sheet arrangements.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. As the number of variables and assumptions affecting the probable future resolution of the uncertainties increase, these judgments become even more subjective and complex. We have identified the following accounting policies, described below, as the most critical to an understanding of our current financial condition and results of operations.
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.
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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.
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.
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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.
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.
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.
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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.
Recent Accounting Pronouncements
On January 5, 2016, the FASB issued ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This amendment requires all equity investments to be measured at fair value, with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Group does not expect this standard to have a material impact on its consolidated financial statements.
On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for public companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Group does not expect this standard to have a material impact on its consolidated financial statements.
On March 30, 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows; (d) accounting for forfeitures of share-based payments. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Group does not expect this standard to have a material impact on its consolidated financial statements.
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In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective transition method to each period presented. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment.” The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Group does not expect this standard to have a material impact on its consolidated financial statements.
Tabular Disclosure of Contractual Obligations
This information is not required of smaller reporting companies.
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
This information is not required of smaller reporting companies.
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
This information is not required of smaller reporting companies.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
On April 14, 2014, we appointed AWC (CPA) Limited (formerly known as Albert Wong & Co.) to be our principal accountant.
On April 30, 2016, AWC (CPA) Limited has merged with Dominic K.F. Chan & Co and formed Centurion ZD CPA Limited (formerly known as DCAW (CPA) Limited).
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| ITEM 9A. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
We have established disclosure controls and procedures to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Based upon their evaluation as of December 31, 2016, our Principal Executive and Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective at that reasonable assurance level.
Management's Report on Internal Control Over Financial Reporting
Under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial and Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under the criteria established in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2016.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit smaller reporting companies to provide only management’s report in this Annual Report.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during the most recently completed fiscal quarter.
| ITEM 9B. | OTHER INFORMATION |
On February 4, 2016, Mi1 Global Limited (“Mi1”) formerly known as: Abina Holding Incorporation purchased a total of 91,556,491 common shares of Domain Extremes Inc. (the “Company”) at US$0.00074 per share, representing 51% of the Company’s outstanding common shares. The shares were purchased for cash from the following persons:
| Name | Number of shares |
| Promula Trading Limited | 42,230,345 |
| HUANG Runpeng | 3,100,000 |
| Wai Yin Phoebe NG | 4,749,828 |
| Wai Leong TANG | 5,903,678 |
| Francis BOK | 9,710,864 |
| Stephen TANG | 23,921,391 |
| Shuk Har LAI | 1,940,385 |
Mi1 is a limited liability company registered in the Republic of Vanuatu. Mi1 is owned by its directors, Mr. LIM Kock Chiang (80%) and Mr. KOK Seng Yeap (20%). Mr. LIM Kock Chiang and Mr. KOK Seng Yeap provided the financing to Mi1 to purchase the Company’s shares. The financing is interest free and has no definite repayment schedule.
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There is no agreement between Mi1 and its owners and the former Company stockholders regarding election of directors or any other matters.
On April 11, 2016, Francis Bok, Stephen Tang, Huang Run Peng, and Wu Cai Xia resigned from the Board of Directors (the “Board”) and their respective executive positions of the Company as part of the Company’s management reorganization. The resignation by each of these individuals did not involve any disagreements with the Company or the management of the Company.
In connection with the departure of the aforementioned individuals the Company’s Board named the following individuals as current directors:
| · | Lim Kock Chiang (Chairman and Chief Executive Officer) |
| · | Kok Seng Yeap (Vice-Chairman) |
| · | Kok May EE (Director and Chief Financial Officer) |
| · | Tan Peng Kwan (Director and Chief Operating Officer) |
| · | Mustapha Bin Taib (Director and Chief Marketing Officer) |
| · | Chan Kwong Kean (Director) |
| · | Phang Fuk Tjhan (Director) |
| · | Wan Mohd Akmal Bin Wan Salleh (Director) |
On April 11, 2016, the Board of the Company approved an amendment to Section 1 of Article II of the By-laws of the Company to increase the maximum Board size from seven (7) to ten (10) and fixed the current number at eight (8).
The foregoing description of the By-laws does not purport to be complete and is qualified in its entirety by reference to the full text of the By-laws, a copy of which is filed as Exhibit 3.2 and incorporated by reference to the Quarterly Report on May 16, 2016.
Effective June 15, 2016, the Board of the Company increased the size of the Board from eight to ten directors and elected Mr. Dadeng Hidayat and Mr. Muhammad Yunus Yosfiah as associated directors to fill the newly created vacancy on the Board.
On November 4, 2016, the Company held its annual meeting of stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved an amendment (the “Amendment”) to the Company’s Articles of Incorporation to (a) change the name of the Company from “Domain Extremes Inc.” to “Mi1 Global TelCo., Inc.” and (b) increase the authorized shares of common stock from 200,000,000 shares to 1,200,000,000 shares. The Amendment had previously been approved by the Board of the Company on August 31, 2016, subject to the approval of the Company’s stockholders. The Amendment will become effective upon its filing with the Secretary of State of the State of Nevada, which the Company will do as soon as practicable.
At the Annual Meeting held at 9:00 a.m. local time on November 4, 2016, the Company’s stockholders voted on six proposals. The Company had 179,522,531 shares of common stock outstanding on September 9, 2016, the record date for the Annual Meeting, of which 162,355,905 shares of common stock were present in person or represented by proxy at the Annual Meeting. The matters voted on at the Annual Meeting are described in more detail in the Company’s definitive proxy statement on Schedule 14A, which the Company filed with the Securities and Exchange Commission on September 19, 2016 (the “Proxy Statement”).
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The following proposals were voted upon at the Annual Meeting and the final voting results with respect to each proposal are set forth below:
Proposal 1: The Company’s stockholders elected ten members to the Board to hold office until the 2017 annual meeting of stockholders or until their successors are duly elected and qualified, or until their earlier death, resignation or removal from office. The voting results were as follows:
| Name | Votes For | Votes Withheld | Broker Non- Votes | |||||||||
| Lim Kock Chiang | 162,349,576 | 16 | 6,313 | |||||||||
| Kok Seng Yeap | 162,349,582 | 10 | 6,313 | |||||||||
| Kok May EE | 162,349,576 | 16 | 6,313 | |||||||||
| Tan Peng Kwan | 162,349,576 | 16 | 6,313 | |||||||||
| Mustapha Bin Taib | 162,349,576 | 16 | 6,313 | |||||||||
| Chan Kwong Kean | 162,349,576 | 16 | 6,313 | |||||||||
| Phang Fuk Tjhan | 162,349,582 | 10 | 6,313 | |||||||||
| Wan Mohd Akmal Bin Wan Salleh | 162,349,582 | 10 | 6,313 | |||||||||
| Dadeng Hidayat | 162,349,582 | 10 | 6,313 | |||||||||
| Muhammad Yunus Yosfiah | 162,349,581 | 11 | 6,313 | |||||||||
Proposal 2: The Company’s stockholders ratified the selection of DCAW (CPA) Limited (“DCAW”) as the Company’s independent registered public accounting firm for the year ending December 31, 2016. The voting results were as follows:
| Votes For | Votes Against | Votes Abstained | |||
| 162,355,722 | 0 | 183 |
Proposal 3: The Company’s stockholders approved the amendment to the Company’s Articles of Incorporation to change the name of the Company to “Mi1 Global TelCo., Inc.” The voting results were as follows:
| Votes For | Votes Against | Votes Abstained | |||
| 162,355,722 | 0 | 183 |
The amendment to the Company’s Articles of Incorporation will become effective upon its filing with the Secretary of State of the State of Nevada, which the Company will do as soon as practicable.
Proposal 4: The Company’s stockholders approved the amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 200,000,000 shares to 1,200,000,000 shares. The voting results were as follows:
| Votes For | Votes Against | Votes Abstained | |||
| 162,353,838 | 2,067 | 0 |
The amendment to the Company’s Articles of Incorporation will become effective upon its filing with the Secretary of State of the State of Nevada, which the Company will do as soon as practicable.
Proposal 5: The Company’s stockholders approved, on a non-binding advisory basis, the compensation of the Company’s named executive officers, as described in the Proxy Statement. The voting results were as follows:
| Votes For | Votes Against | Votes Abstained | Broker Non-Votes | |||
| 162,349,577 | 15 | 0 | 6,313 |
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Proposal 6: The Company’s stockholders approved, on a non-binding advisory basis, the frequency of future advisory votes on the compensation of the Company’s named executive officers every 3 years. The voting results were as follows:
| 3 Years | 2 Years | 1 Year | Votes Abstained | Broker Non-Votes | ||||
| 162,349,505 | 11 | 73 | 0 | 6,316 |
On February 14, 2017, Kok Seng Yeap, Kok May EE, Tan Peng Kwan, Chan Kwong Kean, Wan Mohd Akmal Bin Wan Salleh and Muhammad Yunus Yosfiah resigned from the Board and their respective executive positions of the Company as part of the Company’s management reorganization. The resignation by each of these individuals did not involve any disagreements with the Company or the management of the Company.
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| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
The following table sets forth information regarding our executive officers and directors as of December 31, 2016.
| Name | Age | Principal Position | Appointment/Resignation date |
| Francis Bok | 50 | Director, President (principal executive officer) | January 23,2006/April 11, 2016 |
| Stephen Tang | 64 | Director, Treasurer (principal financial officer) | January 23,2006/April 11, 2016 |
| Huang Run Peng | 54 | Director | February 7, 2012/April 11, 2016 |
| Wu Cai Xia | 50 | Director | February 7, 2012/April 11, 2016 |
| Lim Kock Chiang | 42 | Director, Chairman and Chief Executive Officer | April 11, 2016 |
| Kok Seng Yeap | 41 | Director and Vice Chairman | April 11, 2016/February 14, 2017 |
| Kok May EE | 26 | Director and Chief Financial Officer | April 11, 2016/February 14, 2017 |
| Tan Peng Kwan | 53 | Director and Chief Operating Officer | April 11, 2016/February 14, 2017 |
| Mustapha Bin Taib | 70 | Director and Chief Marketing Officer | April 11, 2016 |
| Chan Kwong Kean | 34 | Director | April 11, 2016/February 14, 2017 |
| Phang Fuk Tjhan | 47 | Director | April 11, 2016 |
| Wan Mohd Akmal Bin Wan Salleh | 29 | Director | April 11, 2016/February 14, 2017 |
| Dadeng Hidayat | 45 | Associated Director | June 15, 2016 |
| Muhammad Yunus Yosfiah | 72 | Associated Director | June 15, 2016/February 14, 2017 |
Francis Bok served as our President and Chairman of our board of directors from our inception in January 2006 to April 2016. In addition, since June 2005, Mr. Bok also serves as chief executive officer of Beyond IVR Limited, an information technology company providing tailor-made telecommunications solutions and telephone servicing, based in Hong Kong. During 2004, Mr. Bok served as assistant manager for Kactus Limited, a Hong Kong-based content and applications provider for mobile handsets. From 2002 until 2004, Mr. Bok was the manager, solutions services, for Continuous Technologies International Limited in Hong Kong, which provides CRM solutions, project management and system integration services. Mr. Bok received his B.Math in Mathematics in 1993 from the University of Waterloo, Canada, a Master of Science in 1997 from the University of Hong Kong, and an MBA in 2000 from the City University of Hong Kong.
Stephen Tang served as a Director and Treasurer of the Company from January 2006 to April 2016. Mr. Tang has served as the chairman of Mega Pacific Capital, Inc., a finance and investment consulting firm, serving Asian companies, since 2005. From 2003 to 2005, Mr. Tang was a director and chairman of Sancon Resources Recovery, Inc., an environmental service company specializing in the collection, processing and selling or reprocessed materials. From April 2008 through March 2009, Mr. Tang served as a director of The Hartcourt Companies. Mr. Tang received his Bachelor’s degree in Business Administration from Hong Kong Baptist University in 1974 and his MBA from the Asian Institute of Management in Manila, Philippines, in 1976.
Huang Run Peng served as a Director of the Company from February 2012 to April 2016. Mr. Huang has served as the president of the board of the Promula Trading Limited and the president of Tianjin Rongtian Equity Investment Fund Management Co., Ltd., a Chinese fund manager, since 2011. From 2005 to 2008, Mr. Huang was a factory director of Pengda Stainless Steel Products Factory.
Wu Cai Xia served as a Director of the Company from February 2012 to April 2016. Ms. Wu has served as general manager of the Promula Trading Limited and the general manager of Tianjin Rongtian Equity Investment Fund Management Co., Ltd. since 2010. From 2009 to 2010, Ms. Wu was a training business manager of China Telecom Company in Xinxiang. From 2005 to 2009, Ms. Wu was a senior director of operations of Ping An Insurance Company.
Lim Kock Chiang currently serves as the Company’s Chairman and Chief Executive Officer, and is the Founder of Mi1 Group of companies. In addition to his service with the Company, Dato’ Dr. Lim has served as Marketing Manager of My Mi One Telco Solution since 2011 and Smart Magic Belt from 2006 to 2010. In addition, Dato’ Dr. Lim has been involved in his family’s business of egg production since 1994, which penetrated 90% of ASEAN market. Dato’ Dr. Lim started an entrepreneurship in 2006 that has expanded rapidly and has established a strong footing in Malaysia and Indonesia. Dato’ Dr. Lim holds his Doctor of Philosophy of Entrepreneurship from Wisconsin International University. We believe Dato’ Dr. Lim’s extensive experience in the trading industry, together with his experience running several businesses, qualify him to serve as Chairman and Chief Executive Officer.
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Kok Seng Yeap served as Vice-Chairman of the Company from April 2016 to February 2017. In addition to his service with the Company, Dato’ Kok serves in various other capacities, including Chairman, Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer at Toga Capital Limited, positions held since August 2015, Chief Executive Officer, President and Chief Financial Officer at Gold Billion Group Holdings Limited, positions held since November 2014, and Associate Director of First Asia Holdings Limited, a position held since November 2013. Dato’ Kok is also the Owner of RichCorp Holdings Ltd and has previously served as Managing Director of NobleCorp Asset Management Ltd and as an advisor for Hengyep International Wealth Management (Hong Kong) and IVP Holding Co. Ltd (Singapore). Dato’ Kok has served as a director of Gold Billion Group Holdings Limited since November 2014 and Kingsburg Holdings Limited since 2012. Dato’ Kok has received qualifications from the Malaysia Insurance Institute and Rockwills Sdn Bhnd, Malaysia. We believe Dato’ Kok’s vast experience in the financial industry qualifies him to service as Vice-Chairman.
Kok May EE served as the Company’s Chief Financial Officer and as a Director from April 2016 to February 2017. In addition to her service with the Company, Ms. Kok is the Director of Finemetal Malaysia Sdn. Bhd, a Company dealing with Swiss precious metal traders, a position she had held since July 2014. Since 2012, Ms. Kok has served as CEO of a financial group company in Hong Kong. Ms. Kok received a finance degree from Middlesex University in London, where she graduated with first class honors. She also holds a MBA from the University of St. Mark & St. John. We believe Ms. Kok’s management and professional knowledge of financial analysis qualify her to serve as our Chief Financial Officer and as a Director.
Tan Peng Kwan served as the Company’s Chief Operating Officer and as a Director from April 2016 to February 2017. In addition to his service with the Company, Dr. Tan participates in the management of the Mi1 Group of companies. From 2012 until 2016, Dr. Tan worked as the contracted Chinese Physician of B4ItHappens, in Petaling Jaya, Selangor, Malaysia. Dr. Tan holds a degree in management and a certification in Traditional Chinese Medicine. We believe that Dr. Tan’s experience in administering, directing and coordinating business operations qualifies him to serve as our Chief Operating Officer and as a Director.
Mustapha Bin Taib currently serves as the Company’s Chief Marketing Officer and as a Director. Prior to joining the Company, Mr. Taib served as Special Officer in the Ministry of Higher Education, Ministry of Agriculture and Ministry of International Trade and Industries, a position he held from 2007 to 2014. In 2005, Mr. Taib was appointed Deputy Director General of Jasa Malaysia and in 2001 he was appointed to a think-tank panel for the Special Affairs Department of the Ministry of Information Malaysia. From 1974 to 1998, Mr. Taib worked as a Lecturer for Kelantan Islamic Foundation, Islam Academic of Malaya University and Yayasan Dakwah Islamiah. We believe that Mr. Taib’s vast network and experience working with governmental entities qualify him to serve as our Chief Marketing Officer and as a Director.
Chan Kwong Kean served as a Director of the Company from April 2016 to February 2017. In addition to his service with the Company, Mr. Chan serves as assistant General Manager and Director of Mi1 Group of companies, where he handles all operations. Over the past 14 years, Mr. Chan has worked at TNS Global Market Research Company and MPH Bookstores as a Senior Finance Executive. Mr. Chan has gained additional business experience by running his own franchise retail business, Cosway. Mr. Chan received a Functional Nutrition degree in 2010 from Nutrition Therapist and a Higher Diploma in Accounting in 2003. We believe that Mr. Chan’s vast experience in a wide variety of disciplines qualifies him to serve as a Director.
Phang Fuk Tjhan currently serves as a Director of the Company. In addition to his service with the Company, Mr. Tjhan serves as General Manager of Pt. Mi One Global Indonesia, a PMA company engaged in telecommunications a position he has held since November 2015. In 2014, Mr. Tjhan worked as an account and finance manager at City Bank in Jakarta. From 2002 to 2008, Mr. Tjhan worked at PT. Laras Cemerlang as a money changer. From 1996 to 2002, Mr. Tjhan worked in banking at Bank Tiara Asia and Citibank. Mr. Tjhan received a degree from STBA-Yapari Bandung in 1994. We believe that Mr. Tjhan’s vast experience in the banking world, together with his hard work and motivation, qualify him to serve as a Director.
Wan Mohd Akmal Bin Wan Salleh served as a Director of the Company from April 2016 to February 2017. During the past five years, Mr. Akmal has worked as a consultant in fund management, forex marketing and information technology services. Additionally, Mr. Akmal started his own telecommunications company. Mr. Akmal received a Bachelor’s degree in Electrical Power Engineering in 2010 and is currently working on his MBA. We believe that Mr. Akmal’s vast experience in telecommunications qualifies him to serve as a Director.
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Dadeng Hidayat currently serves as an Associated Director of the Company. In addition to his service with the Company, Mr. Hidayat has served as Coordinator of Corruption Investigation Forum, Secretary of the Foundation of Indonesia Bersatus, Chief of Red and White Center and as a delegate to Tabloid Media Corruption Court in Jakarta during the year 2015. From 2012 to 2015, Mr. Hidayat served as President Director of PT. Stars Duta Indonesia. He served as President Director of PT. Coin Investment Development from 2010 to 2012, President Director of PT. Coins Chem Tech from 2004 to 2009 and PT. Prabu Gentar Bumi from 2001 to 2004. Mr. Hidayat graduated from Universitas Borobudur in 2000 and has also had a career as a journalist. We believe that Mr. Hidayat’s vast experience in financial management and human resources qualifies him to serve as a Director.
Muhammad Yunus Yosfiah served as an Associated Director of the Company from June 2016 to February 2017. Prior to his role as Director, Lieutenant General (ret.) Muhammad Yunus’ served as Minister of Information under President Bacharuddin Jusuf Habibie. From 2004 to 2009, Mr. Yosfiah served as a member of Parliament and sat on the Comission XI. In 2002, Mr. Yosfiah became a member of the United Development Party. Prior to his involvement with the United Development Party, he was Information Minister in the Development Reform Cabinet from 1998-1998 and chairman of the ABRI faction in MPR Indonesia in 1997. We believe that Mr. Yosfiah’s vast experience in military and government qualifies him to serve as a Director.
Family Relationships
Kok Seng Yeap and Kok May EE are siblings. Other than the foregoing, there is no family relationship between any director, executive officer or director nominee.
Legal Proceedings
During the past ten years, none of our directors, executive officers or control persons have been involved in any of the following events:
| • | any bankruptcy petition filed by or against any business of which such person was an executive officer either at the time of the bankruptcy or within two years prior to that time; |
| • | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| • | being 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; |
| • | being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| • | any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity; |
| • | any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions (other than settlements of civil proceedings among private parties); and |
| • | any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization. |
Code of Ethics
We have adopted a written Code of Ethics that applies to all of our officers, directors and employees, including our principal executive officer and principal financial officer, or persons performing similar functions. Our Code of Ethics is also published on our website www.domainextremes.com. We will make a copy of our Code of Ethics available to anyone upon written request.
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Board Nominations
There have been no material changes to the Company’s procedures by which stockholders may recommend nominees to the Board of Directors.
Audit Committee Matters
The Company does not have a formal Audit Committee. All matters are handled by the Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on copies of such forms received or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended December 31, 2016, all filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with.
| ITEM 11. | EXECUTIVE COMPENSATION |
From November 8, 2011 to September 30, 2015, we pay directors’ fees to Mr. Francis Bok and Mr. Stephen Tang of $1,000 per month and $2,500 per month, respectively.
Executive Officers
None of the Company’s Named Executive Officers have received compensation in the form of cash for their management services to the Company since our inception; however, each has received cash or share-based compensation in lieu of cash for services as directors as set forth in the Summary Compensation Table below. Future compensation of officers will be determined by the Board of Directors based upon our financial condition and performance, our financial requirements, and individual performance of each officer.
We do not have an employment agreement with the Company’s Named Executive Officers. Further, we have no compensatory plans or arrangements, including payments to be received from the Company, with respect to either Executive Officer or any other of our employees, which would in any way result in payments to any such person because of resignation, retirement or other termination of such person's employment with us, or any change in control of the Company, or a change in the person's responsibilities following such a change in control.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our executive officers and employees.
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Directors
Pursuant to our bylaws, our directors are eligible to be reimbursed for their actual out-of-pocket expenses incurred in attending board meetings and other director functions, as well as fixed fees and other compensation to be determined by our board of directors. The fixed fee is determined by the Board of Directors from time to time. In 2015 and 2016, we paid cash compensation to our directors for services as directors as set forth in the Summary Compensation Table below. In 2016, Mr. Stephen Tang’s and Mr. Kok Seng Yeap’s reimbursed expenses were $7,458 and $46,600, respectively.
| Summary Compensation Table(1) | |||
| Name and Principal Position | Director Fees |
All other compensation |
Total |
| ($) | ($) | ($) | |
| Francis Bok [President (principal executive officer) and Director] | |||
| 2015 | 9,000.00 | – | 9,000.00 |
| 2016 | – | – | – |
| Stephen Tang [Treasurer (principal financial officer) and Director] | |||
| 2015 | 22,500.00 | – | 22,500.00 |
| 2016 | – | – | – |
(1) Mr. Bok and Mr. Tang did not receive any salary, bonus, stock awards, option awards, non-equity incentive compensation earnings, or nonqualified deferred compensation earnings in 2015 or 2016. Amounts received as “Directors' Fees” reflect the dollar value of cash received in 2015 and 2016. Mr. Bok and Mr. Tang resigned from the board of directors in April 2016.
Compensation Committee Interlocks and Insider Participation; Compensation Committee Report
This information is not required of smaller reporting companies.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2016. The information in this table provides the ownership information for:
| • | each person known by us to be the beneficial owner of more than 5% of our common stock; |
| • | each of our directors and executive officers; and |
| • | all of our directors and executive officers as a group. |
| 19 |
Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock and those rights to acquire additional shares within sixty days. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares of common stock indicated as beneficially owned by them, except to the extent such power may be shared with a spouse. Common stock beneficially owned and percentage ownership are based on 179,522,531 shares of common stock currently outstanding and no additional shares potentially acquired within sixty days.
Name and Address of Beneficial Owner(1) | Sole Voting Investment | Shared Voting Investment | Total Beneficially Owned | Percentage of Outstanding Beneficially Owned | ||||||||||||
Stephen Tang(2) 602 Nan Fung Tower, Suite 6/F | – | – | – | – | ||||||||||||
Francis Bok(2) 602 Nan Fung Tower, Suite 6/F | – | – | – | – | ||||||||||||
| Lim Kock Chiang(3) | – | 73,245,193 | 73,245,193 | 40.8% | ||||||||||||
| Kok Seng Yeap(4) | – | 18,311,298 | 18,311,298 | 10.2% | ||||||||||||
Mi1 Global Limited (fka Abina Holding Incorporation) | 91,556,491 | 91,556,491 | 51.0% | |||||||||||||
| Kok May EE | – | – | – | – | ||||||||||||
| Tan Peng Kwan | – | – | – | – | ||||||||||||
| Mustapha Bin Taib | – | – | – | – | ||||||||||||
| Chan Kwong Kean | – | – | – | – | ||||||||||||
| Phang Fuk Tjhan | – | – | – | – | ||||||||||||
| Wan Mohd Akmal Bin Wan Salleh | – | – | – | – | ||||||||||||
| Dadeng Hidayat | – | – | – | – | ||||||||||||
| Muhammad Yunus Yosfiah | – | – | – | – | ||||||||||||
| All directors and executive officers as a group (10 persons) | – | 91,556,491 | 91,556,491 | 51.0% | ||||||||||||
| (1) | Unless otherwise indicated, the address of such beneficial owner is the Company’s principal executive office, which is located at 36, Jalan Seri Utara 3/3C, Kipark Avenue, Off Jalan Ipoh, 68100 Kuala Lumpur, Wilayah Persekutuan, Malaysia. |
| (2) | Resigned in April 2016. |
| (3) | Shares of common stock held by Mi1 Global Limited, which Mr. Lim may be deemed to own beneficially. |
| (4) | Shares of common stock held by Mi1 Global Limited, which Mr. Kok may be deemed to own beneficially. |
Change of Control Arrangements
None.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
| 20 |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
Our directors have advanced funds on an interest-free basis, with no maturity date, from inception for working. Amounts advanced totaled $98,306 in 2016 and $38,761 in 2015. In 2015, Mr. Bok and Mr. Tang advanced amounts for cash, director fee, professional service fees and transfer agent fees. In 2016, Mr. Kok Seng Yeap advanced amounts for cash and professional service fees.
As of the date of this Annual Report, we have no standing committees and our entire board of directors serves as our audit and compensation committees. We have determined that none of our directors are independent based on an analysis of the standards for independence set forth in Section 121A of the American Stock Exchange Company Guide. If we undertake to qualify our common stock for quotation in the over-the-counter market, we may need to ensure we meet any eligibility requirements with respect to independent directors.
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Audit Fees
During the year ended December 31, 2016, we paid our principal accountants $4,679 in connection with our annual audit for the year ended December 31, 2014 and December 31, 2015 and the review of our Quarterly Reports on Form 10-Q. The fee for the audit of the financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2016 is $2,308. The aggregate of such fees is $6,987.
Audit-Related Fees
We did not receive audit-related services that are not reported as Audit Fees for the year ended December 31, 2016.
Tax Fees
During fiscal 2016, our principal accountant did not render services to us for tax compliance, tax advice and tax planning.
All Other Fees
During fiscal 2016, there were no fees billed for products and services provided by the principal accountant other than those set forth above.
Audit Committee Approval
We do not have a formal audit committee. Our Board of Directors pre-approved all of the foregoing services.
| 21 |
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
(a) The following Exhibits are filed as part of this report.
| Exhibit No. | Description | |
| 3.1 | Articles of Incorporation, as amended as of May 4, 2009* | |
| 3.2 | By-laws, as currently in effect* | |
| 10.1 | Financial Consulting Services Agreement, dated as of January 1, 2007, by and among Mega Pacific Capital Inc. and Domain Extremes Inc.* | |
| 10.2 | Project Agreement, dated January 11, 2008, between Domain Extremes Inc. and Guangzhou Sunnasia Digital Technology Co. Ltd.* | |
| 10.3 | Service Agreement, dated February 17, 2016, between Domain Extremes Inc. and Fintel (USA) Ltd. | |
| 14.1 | Code of Business Conduct and Ethics* | |
| 31.1 | Certification of Chairman | |
| 31.2 | Certification of Chief Marketing Officer | |
| 32.1 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS** | XBRL Instance Document | |
| 101.SCH** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | Incorporated by reference to the Registrant’s Registration Statement on Form 10, dated August 3, 2009, SEC File No. 000-53749. | |
| ** | To be filed by amendment. |
| 22 |
DOMAIN EXTREMES INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
AND INDEPENDENT AUDITORS’ REPORT
(Stated in US Dollars)
| F-1 |
 |
中正達會計師事務所有限公司 Centurion ZD CPA Limited Certified Public Accountants (Practising) |
|
HK office: 7th Floor, Nan Dao Commercial Building, 359-361 Queen’s Road Central, Hong Kong 香港 皇后大道中三五九至三六一號 南島商業大廈七樓 Tel : (852) 2851 7954 Fax: (852) 2545 4086 Kowloon office: Room 2105-06, 21/F., Office Tower, Langham Place, 8 Argyle Street, Mongkok, Kowloon, Hong Kong 九龍 旺角 亞皆老街八號 朗豪坊辦公大樓2105-06室 Tel: (852) 2780 0607 Fax: (852) 2780 0013 | |
To: the Board of Directors and Shareholders of
Domain Extremes Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheets of Domain Extremes Inc. (“the Company”) as of December 31, 2016 and 2015 the related statements of operations, stockholders’ equity and cash flows for each of the years in the period ended December 31, 2016 and 2015. 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 audit.
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. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2016 and 2015 and the results of its operations and its cash flows for each of the years in the period ended December 31, 2016 and 2015 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Centurion ZD CPA Limited
Certified Public Accountants (Practising)
(Formerly known as DCAW (CPA) Limited)
Hong Kong
Dated: March 30, 2017
| F-2 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
(Stated in US Dollars)
| At December 31, | ||||||||||
| Notes | 2016 | 2015 | ||||||||
| $ | $ | |||||||||
| ASSETS | ||||||||||
| Current Asset: | ||||||||||
| Cash and cash equivalents | 7,833 | 39 | ||||||||
| Total Current Asset | 7,833 | 39 | ||||||||
| Non-Current Asset : | ||||||||||
| Plant and equipment | – | – | ||||||||
| Total Non-Current Assets | – | – | ||||||||
| TOTAL ASSETS | 7,833 | 39 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||
| LIABILITIES | ||||||||||
| Current Liabilities: | ||||||||||
| Accrued expenses and other payables | 7 | 31,460 | 28,460 | |||||||
| Advance from related parties | 8 | 294,381 | 209,658 | |||||||
| Total Current Liabilities | 325,841 | 238,118 | ||||||||
| TOTAL LIABILITIES | 325,841 | 238,118 | ||||||||
| STOCKHOLDERS’ (DEFICIT)/EQUITY | ||||||||||
| Common stock | ||||||||||
| Par value: US$0.001 | ||||||||||
| Authorized: 2016 – 200,000,000 shares (2015 – 200,000,000 shares) | ||||||||||
| Issued and outstanding: 2016 – 179,522,531 shares (2015 – 179,522,531 shares) | 6 | 179,522 | 179,522 | |||||||
| Additional paid-in-capital | 165,850 | 165,850 | ||||||||
| Deficit accumulated during the development stage | (663,380 | ) | (583,451 | ) | ||||||
| TOTAL STOCKHOLDERS’ DEFICIT | (318,008 | ) | (238,079 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 7,833 | 39 | ||||||||
See accompanying notes to financial statements
| F-3 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
(Stated in US Dollars)
| For the year ended December 31, 2016 | For the year ended December 31, 2015 | For the period January 23, 2006 (inception) through December 31, 2016 | ||||||||||||
| Notes | $ | $ | $ | |||||||||||
| Net sales | 7,538 | 8,292 | 97,983 | |||||||||||
| Cost of sales | – | – | – | |||||||||||
| Gross Profit | 7,538 | 8,292 | 97,983 | |||||||||||
| Impairment loss of long-term investment | – | – | (10,000 | ) | ||||||||||
| Impairment loss of intangible assets | – | – | (3,910 | ) | ||||||||||
| Other operating income | 4 | 11,077 | – | 36,333 | ||||||||||
| Administrative and other operating expenses, including share based compensation | (98,544 | ) | (82,300 | ) | (783,786 | ) | ||||||||
| Operating loss before income taxes | (79,929 | ) | (74,008 | ) | (663,380 | ) | ||||||||
| Income taxes | 5 | – | – | – | ||||||||||
| Net loss and comprehensive loss | (79,929 | ) | (74,008 | ) | (663,380 | ) | ||||||||
| Loss per share of common stock | ||||||||||||||
| - Basic and diluted | (0.00 | ) | (0.00 | ) | ||||||||||
| Weighted average shares of common stock | ||||||||||||||
| - Basic and diluted | 179,522,531 | 148,951,232 | ||||||||||||
See accompanying notes to financial statements
| F-4 |
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, December 31, 2014 | 144,542,831 | 144,543 | 67,907 | (509,443 | ) | (296,993 | ) | |||||||||||||
| Issuance of common stock | 34,979,700 | 34,979 | 97,943 | – | 132,922 | |||||||||||||||
| Net loss and comprehensive loss | – | – | – | (74,008 | ) | (74,008 | ) | |||||||||||||
| Balance, December 31, 2015 | 179,522,531 | 179,522 | 165,850 | (583,451 | ) | (238,079 | ) | |||||||||||||
| Net loss and comprehensive loss | – | – | – | (79,929 | ) | (79,929 | ) | |||||||||||||
| Balance, December 31, 2016 | 179,522,531 | 179,522 | 165,850 | (663,380 | ) | (318,008 | ) | |||||||||||||
See accompanying notes to financial statements
| F-5 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
(Stated in US Dollars)
| For the year ended December 31, 2016 | For the year ended December 31, 2015 | For the period January 23, 2006 (inception) through December 31, 2016 | ||||||||||
| $ | $ | $ | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss and comprehensive loss | (79,929 | ) | (74,008 | ) | (663,380 | ) | ||||||
| Depreciation | – | – | 1,603 | |||||||||
| Share based compensation | – | – | 71,430 | |||||||||
| Changes in current assets and liabilities | ||||||||||||
| Prepaid expenses and other receivables | – | 10,430 | – | |||||||||
| Amount due to related parties | 84,723 | (69,445 | ) | 294,381 | ||||||||
| Accrued expenses and other payables | 3,000 | (3 | ) | 31,460 | ||||||||
| Net cash provided by / (used in) operating activities | 7,794 | (133,026 | ) | (264,506 | ) | |||||||
| Cash flows from financing activity: | ||||||||||||
| Issuance of share capital | – | 132,922 | 273,942 | |||||||||
| Net cash provided by financing activity | – | 132,922 | 273,942 | |||||||||
| Cash flows from investing activity: | ||||||||||||
| Purchase of property, plant and equipment | – | – | (1,603 | ) | ||||||||
| Net cash used in investing activity | – | – | (1,603 | ) | ||||||||
| Net increase / (decrease) in cash and cash equivalents | 7,794 | (104 | ) | 7,833 | ||||||||
| Cash and cash equivalents at beginning of the year | 39 | 143 | – | |||||||||
| Cash and cash equivalents at end of the year | 7,833 | 39 | 7,833 | |||||||||
| Supplementary disclosures of cash flow information: | ||||||||||||
| Interest paid | – | – | – | |||||||||
| Income taxes paid | – | – | – | |||||||||
See accompanying notes to financial statements
| F-6 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
(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 $97,983 and has incurred an accumulated deficit of $663,380.
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 |
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.
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.
| F-7 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 2. | Summary of principal accounting policies (Continued) |
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.
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.
| F-8 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 2. | Summary of principal accounting policies (Continued) |
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.
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.
| F-9 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 2. | Summary of principal accounting policies (continued) |
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.
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.
| F-10 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 2. | Summary of principal accounting policies (continued) |
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.
| F-11 |
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
On January 5, 2016, the FASB issued ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This amendment requires all equity investments to be measured at fair value, with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Group does not expect this standard to have a material impact on its consolidated financial statements.
On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for public companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Group does not expect this standard to have a material impact on its consolidated financial statements.
On March 30, 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows; (d) accounting for forfeitures of share-based payments. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Group does not expect this standard to have a material impact on its consolidated financial statements.
| F-12 |
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 pronouncement (Continued)
In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective transition method to each period presented. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Group does not expect this standard to have a material impact on its consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment.” The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Group does not expect this standard to have a material impact on its consolidated financial statements.
| F-13 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 3. | Going Concern |
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 incurred a net loss of $79,929 (from operations) for the year ended December 31, 2016 and an accumulated deficit of $663,380. It also sustained operating losses in prior years as well. These factors raise substantial doubt as to its ability to remain a going concern and obtain debt and/or equity financing and achieve profitable operations.
The Company intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may be required to curtail its operations.
| 4. | Other income |
For the year ended December 31, 2016 | For the year ended December 31, 2015 | For the period January 23, 2006 (inception) through December 31, 2016 | ||||||||||
| $ | $ | $ | ||||||||||
| Bank interest income | – | – | 26 | |||||||||
| Gain on exchange | – | – | 383 | |||||||||
| Sundry income | 11,077 | – | 35,924 | |||||||||
| Total | 11,077 | – | 36,333 | |||||||||
| 5. | Income taxes |
The Company is incorporated in the United 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, 2016 and 2015.
The Company’s operations are carried out in Hong Kong, the PRC, and is subject to Hong Kong profit tax at 16.5% in 2016 (2015: 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.
| F-14 |
DOMAIN EXTREMES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Stated in US Dollars)
| 5. | Income taxes (Continued) |
The cumulative net operating loss carry forward is approximately $663,380 and $583,451 as at December 31, 2016 and 2015 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, | ||||||||
| 2016 | 2015 | |||||||
| $ | $ | |||||||
| Deferred tax asset attributable to Net operating loss carryover | 225,549 | 198,373 | ||||||
| Valuation allowance | (225,549 | ) | (198,373 | ) | ||||
| Net deferred tax assets | – | – | ||||||
| 6. | 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, 2016 and 2015 are 179,522,531 and 179,522,531 respectively.
Equity transactions
Following is the equity transactions during the year ended December 31, 2015.
On November 16, 2015, we issued 34,979,700 shares of our common stock to Francis Bok, Stephen Tang and Angel Lai valued at US$132,923 in lieu of cash compensation for director and secretary service from October 1, 2012 to September 30, 2015.
There is no changes in equity transactions during the year ended December 31, 2016.
| F-15 |
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, 2016 and 2015 are summarized as follows:
| Year ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| $ | $ | |||||||
| Accrued audit fee | 2,308 | 1,923 | ||||||
| Other payables | 29,152 | 26,537 | ||||||
| Total | 31,460 | 28,460 | ||||||
| 8. | Advance from related parties |
The amounts due to related parties as of December 31, 2016 and 2015 represent advanced payment due to the Company’s directors and shareholder. The amounts due to directors and shareholder are interest free without collateral and maturity date, and repayable upon demand.
| 9. | Commitments and contingencies |
There has been no legal proceedings in which the Company is a party during the years ended December 31, 2016 and 2015.
| 10. | Current vulnerability due to certain concentrations |
The Company's operations are carried out in Hong Kong, Special Administration Region of 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, and 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.
| 11. | Subsequent Events |
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, 2016.
| F-16 |
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 31st day of March, 2017.
| DOMAIN EXTREMES INC. | |
| Date: March 31, 2017 | By: /s/ Lim Kock Chiang |
| Lim Kock Chiang | |
| Chairman and Director | |
| (Chief 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/ Lim Kock Chiang Lim Kock Chiang |
Chairman; Director (Chief Executive Officer) |
March 31, 2017 |
|
/s/ Mustapha Bin Taib Mustapha Bin Taib |
Director (Chief Marketing Officer) |
March 31, 2017 |
|
/s/ Phang Fuk Tjhan Phang Fuk Tjhan |
Director |
March 31, 2017 |
|
/s/ Dadeng Hidayat Dadeng Hidayat |
Associated Director
|
March 31, 2017 |
| Exhibit No. | Description |
| 3.1 | Articles of Incorporation, as amended as of May 4, 2009* |
| 3.2 | By-laws, as currently in effect* |
| 10.1 | Financial Consulting Services Agreement, dated as of January 1, 2007, by and among Mega Pacific Capital Inc. and Domain Extremes Inc.* |
| 10.2 | Project Agreement, dated January 11, 2008, between Domain Extremes Inc. and Guangzhou Sunnasia Digital Technology Co. Ltd.* |
| 10.3 | Service Agreement, dated February 17, 2016, between Domain Extremes Inc. and Fintel (USA) Ltd. |
| 14.1 | Code of Business Conduct and Ethics* |
| 31.1 | Certification of Chairman |
| 31.2 | Certification of Chief Marketing Officer |
| 32.1 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS** | XBRL Instance Document |
| 101.SCH** | XBRL Taxonomy Extension Schema Document |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
*Incorporated by reference to the Registrant’s Registration Statement on Form 10, dated August 3, 2009, SEC File No. 000-53749.
| ** | To be filed by amendment. |