Registration of Securities (General Form) — Form 10 Filing Table of Contents
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2: EX-3.1 Articles of Incorporation HTML 40K
3: EX-3.2 Articles of Conversion HTML 8K
4: EX-3.3 Articles of Merger HTML 44K
5: EX-3.4 Bylaws HTML 58K
6: EX-23.1 Consent of Auditor HTML 6K
Securities
to be registered under Section 12(b) of the Exchange Act:
Title of class to be
so registered:
Name of each
exchange on which
each
class is to be registered:
None
None
Securities
to be registered under Section 12(g) of the Exchange Act:
Common
stock, $.000001 par value
(Title of
class)
TABLE
OF CONTENTS
PAGE
PART
I
Forward-Looking
Statements
1
Item 1.
Description of
Business
1
Item 2.
Management's
Discussion and Analysis or Plan of Operation
10
Item 3.
Description of
Property
11
Item 4.
Security Ownership
of Certain Beneficial Owners and Management
11
Item 5.
Directors and
Executive Officers, Promoters and Control Persons
12
Item 6.
Executive
Compensation
12
Item 7.
Certain
Relationships and Related Transactions And Director Independence
12
Item 8.
Description of
Securities
13
PART
II
Item 1.
Market Price of and
Dividends on the Company's Common Equity and Related
Stockholder Matters
14
Item 2.
Legal
Proceedings
15
Item 3.
Changes in and
Disagreements with Accountants
15
Item 4.
Recent Sale of
Unregistered Securities
16
Item 5.
Indemnification of
Directors and Officers
16
PART
III
Item 1.
Index to
Exhibits
19
Item 2.
Description of
Exhibits
20
FORWARD-LOOKING
STATEMENTS
Some of
the statements contained in this registration statement on Form 10 of Darwin
Resources Inc.
(hereinafter the "Company", "We" or "Darwin Resources") discuss future
expectations, contain projections
of our plan of operation or financial condition or state other forward-looking
information. In this registration
statement, forward-looking statements are generally identified by the words such
as "anticipate", "plan",
"believe", "expect", "estimate", and the like. Forward-looking statements
involve future risks and uncertainties,
there are factors that could cause actual results or plans to differ materially
from those expressed or
implied. These statements are subject to known and unknown risks, uncertainties,
and other factors that
could cause the actual results to differ materially from those contemplated by
the statements.
The
forward-looking information is based on various factors and is derived using
numerous assumptions. A reader
whether investing in the Company's securities or not, should not place undue
reliance on these forward-looking
statements, which apply only as of the date of this Registration Statement.
Important factors that
may cause actual results to differ from projections include, for example:
-
the
success or failure of management's efforts to implement the Company's plan
of operation;
-
the
ability of the Company to fund its operating
expenses;
-
the
ability of the Company to compete with other companies that have a similar
plan of operation;
-
the
effect of changing economic conditions impacting our plan of
operation;
-
the
ability of the Company to meet the other risks as may be described in
future filings with the SEC.
Readers
are cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak
only as of the date hereof. We believe the information contained in this Form
10-SB to be accurate as
of the date hereof. Changes may occur after that date. We will not update that
information except as
required by law in the normal course of its public disclosure practices. Additionally,
the following discussion regarding our financial condition and results of
operations should be read in conjunction with the financial statements and
related notes.
PART
I
ITEM 1. DESCRIPTION
OF BUSINESS
HISTORY
Darwin
Resources, Inc. (the "Company") was originally incorporated on June 24, 1993 in
the State of Florida as Vitech America, Inc. On September 28, 2007, Darwin
Resources, Inc., merged with Vitech America, Inc., so as to effect a redomicile
to Delaware and a name change. Darwin Resources, Inc., was incorporated in
Delaware for the purpose of merging with Vitech America, Inc.
The
Company was originally engaged as a manufacturer and distributor of computer
equipment and related markets in Brazil. The Company evolved into a
vertically integrated manufacturer and integrator of complete computer systems
and business network systems selling directly to end-users. A
diversified customer base widely distributed throughout Brazil was
developed. In September of 1996, the Company had over 8,000 customers
and established a clearly defined channel for marketing additional hardware
products, such as updated peripheral products, new computers, new network
products as well as services, such as internet access services. The
Company marketed its products throughout Brazil under the trademarks EasyNet,
MultiShow, and Vitech Vision.
1
On August17, 2001, the Company filed a voluntary Chapter 7 petition under the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of
Florida (case no. 01-18857). As a result of the filing, all of the Company's
properties were transferred to a United States Trustee and the Company
terminated all of its business operations. The Bankruptcy Trustee has disposed
of all of the assets. On March 14, 2007, the Chapter 7 bankruptcy was closed by
the U.S. Bankruptcy Court Southern District of Florida.
Since
August 2001, the Company has not engaged in any business operations, and has not
filed the reports required by the Securities and Exchange Commission. In
addition, on or about October 4, 2002, the Florida Secretary of State revoked
the Company's corporate charter. Accordingly, the Company had abandoned its
business.
On June21, 2007, pursuant to its Order Granting the "plaintiff’s motion for acceptance
of receiver’s report and release of receiver" (the "Order") and to close the
case, Brian Goldenberg as receiver of the Company pursuant to Florida Statue
607, the Eleventh Judicial Circuit, In and For Miami-Dade County, Florida was
released as receiver of the Company. The purpose of appointing
the receiver was to determine if the Company could be reactivated and operated
in such a manner so that the Company can be productive and
successful. Pursuant to Section 607.1432 of the Florida Statutes,
alternative remedies to dissolution and liquidation would be determined as to
whether the Company could be saved. The actions of the receivership
include:
-
To
settle the affairs, collect the outstanding debts, sell and convey the
property, real and personal
-
To
demand, sue for, collect, receive and take into his or their possession
all the goods and chattels, rights and credits, moneys and effects, lands
and tenements, books, papers, choses in action, bills, notes and property,
of every description of the
Company.
-
To
institute suits at law or in equity for the recovery of any estate,
property, damages or demands existing in favor of the
Company.
-
Provided
that the authority of the receivership is to continue the business of the
Company and not to liquidate its affairs or distribute its
assets
-
To
exercise the rights and authority of a Board of Directors and Officers in
accordance with state law, the articles and
bylaws
In
accordance with the Order, Mr. Goldenberg appointed Mark Rentschler as sole
interim Director and President.
In
September 2007, the Company changed its name to Darwin Resources, Inc. The
Company raised operating capital through the sale of equity securities, which
the Company used to recruit and organize management, and to finance the initial
costs associated with corporate strategic planning and development.
CHANGE OF
CONTROL
On May15, 2007, Mark Rentschler contributed an estimated $50,000 as paid in capital to
the Company. The Company is to use these funds to pay the costs and expenses
necessary to revive the registrant's business operations. Such expenses include,
without limitation, fees to reinstate the Company's corporate charter with the
State of Florida; payment of all past due franchise taxes; settling all past due
accounts with the registrant's transfer agent; accounting and legal fees; and
costs associated with bringing the registrant current with its filings with the
Securities and Exchange Commission, etc.
On June28, 2007, in consideration for the capital contribution by Mark Rentschler, the
Company issued Downing Street Corp., 5,000,000 shares of its newly created
Series B Preferred Stock, which represented approximately 19.58% of the total
ownership of the Company as of June 6, 2008 in accordance with the
Order. The preferred stock carried voting rights which effectively
made Downing Street Corp., the holder of approximately 99% of the voting rights
in the Company's outstanding common and preferred stock. The voting
rights also provided that in no event will the preferred stock voting rights
consist of less than 51% of the total voting rights in the Company's outstanding
common and preferred stock.
2
Downing
Street Corp., (“DSC”) is a business consulting firm, for the purpose of advising
the company as to potential business combinations. Mr. Rentschler is
the managing director of DSC.
Accordingly,
DSC is an affiliated entity.
On
September 28, 2007, Darwin Resources Inc. was incorporated in Delaware for the
purpose of merging with Vitech
America, Inc., a Florida Corporation, so as to effect a re-domicile to
Delaware. The Delaware Corporation is authorized to issue 500,000,000
shares of $0.000001 par value common stock and 8,000,000 shares of $0.000001 par
value preferred stock. On September 28, 2007, both Vitech America, the Florida
corporation and Darwin Resources, the Delaware corporation, signed and filed
Articles of Merger, with the respective states, pursuant to which the Delaware
corporation, Darwin Resources, was the surviving entity. The
shareholders of record of Vitech America, Inc. received 1 share of new common
stock for every 1 share of Vitech America common stock and 1 share of new
preferred stock for every 1 share of preferred stock they owned.
On
September 28, 2007, the Company changed its name to Darwin Resources Inc. The
name was not meant to be
indicative of the Company's business plan or purpose. As more fully described
herein under the heading
"Current Business Plan", Darwin Resources’s current business plan is to seek,
investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act registered
corporation.
As of
June 6, 2008, the Company is not in negotiations with, nor does it have any
agreements with any potential merger candidates.
CURRENT
BUSINESS PLAN
Darwin
Resources is a shell company in that it has no or nominal operations and either
no or nominal assets. At
this time, Darwin Resources’ purpose is to seek, investigate and, if such
investigation warrants, acquire an
interest in business opportunities presented to it by persons or firms who or
which desire to seek the perceived advantages of an Exchange Act registered
corporation. The Company will not restrict its search to any
specific business, industry, or geographical location and the Company may
participate in a business
venture of virtually any kind or nature. This discussion of the proposed
business is purposefully general and
is not meant to be restrictive of the Company's virtually unlimited discretion
to search for and enter into
potential business opportunities. Management anticipates that it may be able to
participate in only one potential business venture because the Company has
nominal assets and limited financial resources. This lack of
diversification should be considered a substantial risk to shareholders of the
Company because it will not
permit the Company to offset potential losses from one venture against gains
from another. Darwin
Resources’ common stock has been subject to quotation on the pink sheets. There
is not currently an active
trading market in the Company's shares nor do we believe that any active trading
market has existed for
the last two years. There can be no assurance that there will be an active
trading market for our securities
following the effective date of this Registration Statement. In the event that
an active trading market
commences, there can be no assurance as to the market price of our shares of
common stock, whether any
trading market will provide liquidity to investors, or whether any trading
market will be sustained.
Management
has substantial flexibility in identifying and selecting a prospective new
business opportunity. Darwin
Resources would not be obligated nor does management intend to seek pre-approval
by our shareholders.
Darwin
Resources may seek a business opportunity with entities which have recently
commenced operations,
or which wish to utilize the public marketplace in order to raise additional
capital in order to expand into
new products or markets, to develop a new product or service, or for other
corporate purposes.
Darwin
Resources may acquire assets and establish wholly owned subsidiaries in various
businesses or acquire
existing businesses as subsidiaries.
3
Darwin
Resources intends to promote itself privately. The Company has not yet begun
such promotional activities.
The Company anticipates that the selection of a business opportunity in which to
participate will be complex
and risky. Due to general economic conditions, rapid technological advances
being made in some
industries and shortages of available capital, management believes that there
are numerous firms seeking the
perceived benefits of a publicly registered corporation. Such perceived benefits
may include facilitating
or improving the
terms on which additional equity financing may be sought, providing liquidity
for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes),
for all shareholders, and other factors. Potentially, available business
opportunities may occur in many
different industries and at various stages of development, all of which will
make the task of comparative
investigation and analysis of such business opportunities difficult and
complex.
Darwin
Resources has, and will continue to have, little or no capital with which to
provide the owners of business
opportunities with any significant cash or other assets. However, management
believes the Company will be able to offer owners
of acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering. The
owners of the business opportunities will, however, incur significant legal and
accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing Form 8K's, 10K's
or 10KSB's, agreements and related reports and documents. The Securities
Exchange Act of 1934 (the
"Exchange Act"), specifically requires that any merger or acquisition candidate
comply with all applicable
reporting requirements, which will likely include providing audited financial
statements of the acquisition candidate company for at least the two most
recently completed fiscal years, which are to be included within the
numerous filings relevant to complying with the Exchange Act. Nevertheless, the
officer and director of Darwin
Resources has not conducted market research and is not aware of statistical data
which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity. The analysis
of new business opportunities will be undertaken by, or under the supervision
of, the officer and director
of the Company with such outside assistance as he may deem appropriate.
Management intends to
concentrate on identifying preliminary prospective business opportunities, which
may be brought to its attention
through present associations of the Company's officer and director. In analyzing
prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for
the future; nature of present and expected competition; the quality and
experience of management
services which may be available and the depth of that management; the potential
for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated
to impact the proposed activities of the Company; the potential for growth or
expansion; the potential for
profit; the perceived public recognition of acceptance of products, services, or
trades; name identification;
and other relevant factors. Management of Standard Commerce expects to meet
personally with
management and key personnel of the business opportunity as part of the
investigation. To the extent possible, the
Company intends to utilize written reports and investigation to evaluate the
above factors. The Company will
not acquire or merge with any company for which audited financial statements are
not available.
The
foregoing criteria are not intended to be exhaustive and there may be other
criteria that management may deem
relevant. In connection with an evaluation of a prospective or potential
business opportunity, management
may be expected to conduct a due diligence review.
Management
of Darwin Resources has limited experience in managing companies similar to the
Company and shall
mainly rely upon his own efforts, in accomplishing the business purposes of the
Company. The Company may
from time to time utilize outside consultants or advisors to effectuate its
business purposes described
herein. No policies have been adopted regarding use of such consultants or
advisors, the criteria to be used in
selecting such consultants or advisors, the services to be provided, the term of
service, or regarding the
total amount of fees that may be paid. However, because of the limited resources
of the Company, it
is likely that any such fee the Company agrees to pay would be paid in stock and
not in cash. The Company
will not restrict its search for any specific kind of business, but may acquire
a venture which is in its
preliminary or development stage, which is already in operation, or in
essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business in
which the Company may become
engaged, in that such business may need to seek additional capital, may desire
to have its shares publicly
traded, or may seek other perceived advantages which the Company may offer.
However, Darwin Resources does not intend to obtain funds in one or more private
placements to finance the operation of any acquired
business opportunity until such time as the Company has successfully consummated
such a merger or acquisition.
The time
and costs required to pursue new business opportunities, which includes
negotiating and documenting
relevant agreements and preparing requisite documents for filing pursuant to
applicable securities
laws, can not be ascertained with any degree of certainty.
4
Management
intends to devote such time as it deems necessary to carry out the Company's
affairs. The exact length of
time required for the pursuit of any new potential business opportunities is
uncertain. No assurance can be made
that we will be successful in our efforts. We cannot project the amount of time
that our management
will actually devote to our plan of operation.
Darwin
Resources intends to conduct its activities so as to avoid being classified as
an "Investment Company"
under the Investment Company Act of 1940, and therefore avoid application of the
costly and restrictive
registration and other provisions of the Investment Company Act of 1940 and the
regulations promulgated
thereunder.
DARWIN
RESOURCES IS A BLANK CHECK COMPANY
At
present, Darwin Resources is a blank check company with no revenues and has no
specific business plan
or purpose. Darwin Resources’ business plan is to seek new business
opportunities or to engage in a
merger or acquisition with an unidentified company. As a result, Darwin
Resources is a blank check company
and any offerings of our securities needs to comply with Rule 419 under the Act.
Darwin Resources has no current plans to engage in any such offerings.
DARWIN
RESOURCES' COMMON STOCK IS CONSIDERED TO BE PENNY STOCK
Darwin
Resources‘ common stock is a "penny stock," as defined in Rule 3a51-1 under the
Exchange Act. The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the
rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and
the nature and level of risks in the penny stock market. The broker-dealer also
must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its sales
person in the transaction, and monthly account statements showing the market
value of each penny stock
held in the customer's account. In addition, the penny stock rules require that
the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure rules have
the effect of reducing the level of trading activity in the secondary market for
a stock that becomes
subject to the penny stock rules. So long as the common stock of Darwin
Resources is subject to the penny
stock rules, it may be more difficult to sell our common stock.
ACQUISITION
OF OPPORTUNITIES
Management
owns 5,000,000 of Series B Preferred shares of Darwin Resources (the “Preferred
Shares”). The Preferred Shares carry super-voting rights such that management
has control over the Company with approximately 99% of the outstanding votes. As
a result, management will have substantial flexibility in identifying
and selecting a prospective new business opportunity. In implementing a
structure for a particular
business acquisition, the Company may become a party to a merger, consolidation,
reorganization, joint venture, or licensing agreement with another corporation
or entity. It may also acquire stock or
assets of an existing business. On the consummation of a transaction, it is
probable that the present management
and shareholders of the Company will no longer be in control of the Company. In
addition, the Company's directors may, as part of the terms of the acquisition
transaction, resign and be replaced by new directors
without a vote of the Company's shareholders or may sell their stock in the
Company. Any and all such sales
will only be made in compliance with the securities laws of the United States
and any applicable state.
It is
anticipated that any securities issued in any such reorganization would be
issued in reliance upon an exemption
from registration under applicable federal and state securities laws. In some
circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. If such registration
occurs, of which there can be no assurance, it will be undertaken by the
surviving entity after the Company
has successfully consummated a merger or acquisition.
As part
of Darwin Resources’ investigation, the officer and director of the Company may
personally meet with
management and key personnel, may visit and inspect material facilities, obtain
analysis and verification
of certain information provided, check references of management and key
personnel, and take other
reasonable investigative measures, to the extent of the Company's limited
financial resources and management
expertise.
5
With
respect to any merger or acquisition, negotiations with target company
management are expected to focus on the
percentage of the Company which the target company shareholders would acquire in
exchange for all of
their shareholdings in the target company. Depending upon, among other things,
the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage
ownership interest in the Company following any merger or acquisition. The
percentage ownership may
be subject to significant reduction in the event the Company acquires a target
company with substantial
assets. Any merger or acquisition effected by the Company can be expected to
have a significant dilutive
effect on the percentage of shares held by the Company's then shareholders.
Darwin
Resources will participate in a business opportunity only after the negotiation
and execution of appropriate
written agreements. Although the terms of such agreements cannot be predicted,
generally such agreements
will require some specific representations and warranties by all of the parties
thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of
the parties prior to and after such closing, will outline the manner of bearing
costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include
miscellaneous other terms.
Darwin
Resources does not intend to provide its security holders with any complete
disclosure documents,
including audited financial statements, concerning an acquisition or merger
candidate and its business
prior to the consummation of any acquisition or merger transaction.
RISK
FACTORS
FORWARD-LOOKING
STATEMENTS
This
registration statement on Form 10 contains forward-looking statements that are
based on current expectations,
estimates, forecasts and projections about us, our future performance, the
market in which we operate, our
beliefs and our management's assumptions. In addition, other written or oral
statements that constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects", "anticipates",
"targets", "goals", "projects", "intends", "plans", "believes", "seeks",
"estimates", variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are
difficult to predict or assess. Therefore, actual outcomes and results may
differ materially from what is expressed
or forecast in such forward-looking statements.
DEPENDENCE
ON KEY PERSONNEL
Darwin
Resources is dependent upon the continued services of its sole officer and
director, Mark Rentschler. To the extent that his services become unavailable,
Darwin Resources will be required to obtain other
qualified personnel and there can be no assurance that it will be able to
recruit and hire qualified persons upon
acceptable terms.
LIMITED
RESOURCES; NO PRESENT SOURCE OF REVENUES.
At
present, our business activities are limited to seeking potential business
opportunities. Due to our limited financial and
personnel resources, there is only a limited basis upon which to evaluate our
prospects for achieving our
intended business objectives. We have only limited resources and have no
operating income, revenues or
cash flow from operations. Our management is providing us
with funding, on an as needed basis, necessary for us to continue our corporate
existence and our business
objective to seek new business opportunities, as well as funding the costs,
including professional
accounting fees, of registering its securities under the Exchange Act and
continuing to be a reporting
company under the Exchange Act. We have no written agreement with our management
to provide any
interim financing for any period. In addition, we will not generate any revenues
unless and until we enter into
a new business, of which there can be no assurance. As of December 31, 2007 and
through the date of this registration statement, we had no cash or cash
equivalents.
6
CONFLICTS
OF INTEREST
Our
management is not required to commit his full time to our affairs. As a result,
pursuing new business opportunities
may require a greater period of time than if he would devote his full time to
our affairs. Management is
not precluded from serving as an officer or director of any other entity that is
engaged in business
activities similar to those of Darwin Resources, though management is not
currently serving in such a
position. Management has not identified and is not currently negotiating a new
business opportunity for us. In
the future, management may become associated or affiliated with entities engaged
in business activities
similar to those we intend to conduct. In such event, management may have
conflicts of interest in determining
to which entity a particular business opportunity should be presented. In
general, officers and directors of
a Delaware corporation are required to present certain business opportunities to
such corporation.
In the event that our management has multiple business affiliations, he may have
similar legal obligations
to present certain business opportunities to multiple entities. In the event
that a conflict of interest
shall arise, management will consider factors such as reporting status,
availability of audited financial
statements, current capitalization and the laws of jurisdictions. If several
business opportunities or operating
entities approach management with respect to a business combination, management
will consider the foregoing
factors as well as the preferences of the management of the operating company.
However, management
will act in what he believes will be in the best interests of the shareholders
of Darwin Resources and other respective public companies. Darwin Resources
shall not enter into a transaction with a target
business that is affiliated with management.
COMPETITION
Darwin
Resources will remain an insignificant participant among the firms which engage
in the acquisition
of business opportunities. There are many established venture capital and
financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Company. In
view of Darwin Resources’ combined extremely limited financial resources and
limited management
availability, the Company will continue to be at a significant competitive
disadvantage compared to
the Company's competitors
BROAD
DISCRETION OF MANAGEMENT
Any
person who invests in our securities will do so without an opportunity to
evaluate the specific merits or risks of any
potential new prospective business in which we may engage. As a result,
investors will be entirely
dependent on the broad discretion and judgment of management in connection with
the selection of a prospective
business. There can be no assurance that determinations made by our management
will permit us to achieve
our business objectives.
ABSENCE
OF SUBSTANTIVE DISCLOSURE RELATING TO PROSPECTIVE BUSINESS
As of the
date of this registration statement, we have not yet identified any prospective
business or industry in which we
may seek to become involved and at present we have no information concerning
any prospective
business. There can be no assurance that any prospective business opportunity
will benefit shareholders
or prove to be more favorable to shareholders than any other investment that may
be made by shareholders
and investors.
THERE IS
NO ACTIVE MARKET FOR OUR COMMON STOCK AND NONE MAY DEVELOP OR BE
SUSTAINED
There is
currently no active trading market in our shares. There can be no assurance that
there will be an active
trading market for our securities following commencement of a new business. In
the event that an active
trading market commences, there can be no assurance as to the market price of
our shares of common stock,
whether any trading market will provide liquidity to investors, or whether any
trading market will be sustained.
7
UNSPECIFIED
INDUSTRY FOR NEW PROSPECTIVE BUSINESS OPPORTUNITIES; UNASCERTAINABLE RISKS
There is
no basis for shareholders to evaluate the possible merits or risks of potential
new business opportunities
or the particular industry in which we may ultimately operate. To the extent
that we effect a business
combination with a financially unstable entity or an entity that is in its early
stage of development or growth,
including entities without established records of revenues or income, we will
become subject to numerous
risks inherent in the business and operations of that financially unstable
company. In addition, to the extent
that we effect a business combination with an entity in an industry
characterized by a high degree of risk, we
will become subject to the currently unascertainable risks of that industry. A
high level of risk frequently
characterizes certain industries that experience rapid growth. Although
management will endeavor to
evaluate the risks inherent in a particular new prospective business or
industry, there can be no assurance
that we will properly ascertain or assess all such risks or that subsequent
events may not alter the risks that we
perceive at the time of the consummation of any new business opportunity.
ADDITIONAL
FINANCING REQUIREMENTS
Darwin
Resources has no revenues and is dependent upon the willingness of management to
fund the costs associated
with the reporting obligations under the Exchange Act, and other administrative
costs associated with our
corporate existence. As of December 31, 2007, Darwin Resources has
incurred $103,538 for general and administrative expenses, including accounting
fees, reinstatment fees, and other professional fees related to the preparation
and filing of this registration statement under the Exchange Act. We
may not generate any revenues unless and until the commencement of new business
operations.
We believe that
management will continue to provide sufficient funds to pay accounting and
professional fees and other
expenses to fulfill our reporting obligations under the Exchange Act until we
commence business operations.
In the event that our available funds from our management and affiliates prove
to be insufficient, we will be
required to seek additional financing. Our failure to secure additional
financing could have a material
adverse affect on our ability to pay the accounting and other fees in order to
continue to fulfill our reporting
obligations and pursue our business plan. We do not have any arrangements with
any bank or financial
institution to secure additional financing and there can be no assurance that
any such arrangement would be
available on terms acceptable and in our best interests. We do not have any
written agreement with our
affiliates to provide funds for our operating expenses.
STATE
BLUE SKY REGISTRATION; POTENTIAL LIMITATIONS ON RESALE OF THE SECURITIES
The
holders of our shares of common stock and those persons who desire to purchase
our stock in any trading
market that might develop, should be aware that there may be state blue-sky law
restrictions upon the ability
of investors to resell our securities. Accordingly, investors should consider
the secondary market for Darwin
Resources’ securities to be a limited one. It is the
present intention of Darwin Resources’ management, after the commencement of new
business operations,
to seek coverage and publication of information regarding our Company in an
accepted publication
manual which permits a manual exemption. The manual exemption permits a security
to be distributed
in a particular state without being registered if the Company issuing the
security has a listing for that security
in a securities manual recognized by the state. However, it is not enough for
the security to be listed in a
recognized manual. The listing entry must contain (1) the names of issuer's
officers, and directors, (2) an
issuer's balance sheet, and (3) a profit and loss statement for either the
fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. Furthermore, the manual
exemption is a non-issuer
exemption restricted to secondary trading transactions, making it unavailable
for issuers selling newly issued
securities. Most of the
accepted manuals are those published in Standard and Poor's, Moody's Investor
Service, Fitch's Investment
Service, and Best's Insurance Reports, and many states expressly recognize these
manuals. A smaller
number of states declare that they "recognize securities manuals" but do not
specify the recognized manuals. The
following states do not have any provisions and therefore do not expressly
recognize the manual
exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South
Dakota, Tennessee, Vermont and
Wisconsin.
8
DIVIDENDS
UNLIKELY
We do not
expect to pay dividends for the foreseeable future because we have no revenues.
The payment of dividends
will be contingent upon our future revenues and earnings, if any, capital
requirements and overall financial
condition. The payment of any future dividends will be within the discretion of
our board of directors. It
is our expectation that after the commencement of new business operations that
future management
will determine to retain any earnings for use in business operations and
accordingly, we do not anticipate
declaring any dividends in the foreseeable future.
POSSIBLE
ISSUANCE OF ADDITIONAL SECURITIES
Our
Articles of Incorporation authorize the issuance of 500,000,000 shares of common
stock, par value
$0.000001 and 8,000,000 shares of preferred stock, par value $0.000001. As of
July 6, 2008, we have 20,534,655 shares of common stock and 5,000,000 shares of
Series B preferred stock issued and outstanding, respectively. We may be expected to
issue additional shares in connection with our pursuit of new business
opportunities and new business
operations. To the extent that additional shares of common stock are issued, our
shareholders would experience
dilution of their respective ownership interests. If we issue shares of common
stock in connection with our
intent to pursue new business opportunities, a change in control of our Company
may be expected to occur. The
issuance of additional shares of common stock may adversely affect the market
price of our common stock,
in the event that an active trading market commences.
COMPLIANCE
WITH PENNY STOCK RULES
Our
securities will be considered a "penny stock" as defined in the Exchange Act and
the rules thereunder, unless the
price of our shares of common stock is at least $5.00. We expect that our share
price will be less than $5.00.
Unless our common stock is otherwise excluded from the definition of "penny
stock", the penny stock rules
apply. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document that
provides information
about penny stocks and the nature and level of risks in the penny stock market.
The broker- dealer also
must provide the customer with current bid and offer quotations for the penny
stock, the compensation
of the broker-dealer and its sales person in the transaction, and monthly
account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require
that the broker-dealer, not otherwise exempt from such rules, must make a
special written determination
that the penny stock is suitable for the purchaser and receive the purchaser's
written agreement to
the transaction. These disclosure rules have the effect of reducing the level of
trading activity in the
secondary market for a stock that becomes subject to the penny stock rules. So
long as the common stock is
subject to the penny stock rules, it may become more difficult to sell such
securities. Such requirements
could limit the level of trading activity for our common stock and could make it
more difficult for investors
to sell our common stock.
GENERAL
ECONOMIC RISKS
Darwin
Resources’ current and future business plans are dependent, in large part, on
the state of the general
economy. Adverse changes in economic conditions may adversely affect our plan of
operation.
INABILITY
TO BORROW
The
Company's limited
resources and lack of recent operating history may make it difficult to borrow
funds or raise capital. Such
inability to borrow funds or raise funds through the issuance of restricted
common stock required to effect or
facilitate a business combination may have a material adverse effect on the
Company's financial condition and
future prospects, including the ability to complete a business combination. To
the extent that debt
financing ultimately proves to be available, any borrowing will subject the
Company to various risks traditionally
associated with indebtedness, including the risks of interest rate fluctuations
and insufficiency of cash flow
to pay principal and interest, including debt of an acquired business. The Company
currently has no plans to conduct any research and development or to purchase or
sell any significant
equipment.
9
GOING
CONCERN
Our
auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an ongoing business for the next
twelve months. As such, we may have to cease operations and you could lose your
investment.
ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The
following presentation of management's discussion and analysis of the Company's
financial condition and results
of operations should be read in conjunction with the Company's consolidated
financial statements,
the accompanying notes thereto and other financial information appearing
elsewhere in this report. This
section and other parts of this report contain forward-looking statements that
involve risks and uncertainties.
The Company's actual results may differ significantly from the results discussed
in the forward-looking
statements.
OVERVIEW
Our
current activities are related to seeking a new business opportunities. We will
use our limited personnel and financial
resources in connection with such activities. It may be expected that pursuing a
new business opportunity
will involve the issuance of restricted shares of common stock. At December 31,2007, we had no cash or
other assets. At December 31, 2007, the Company had current liabilities of
$53,648.
We have
had no revenues in either the year end December 31, 2007 or year end December31, 2006. In addition, we
had no operating expenses for the year end December 31, 2006. Our operating
expenses for the year end December 31, 2007 were $103,538 and were comprised of
approximately $ 50,000 in costs incurred to revive the company’s business
operations, legal fees of $11,081, and other miscellaneous expenses.
Accordingly, we had a net loss of $103,538 and $110 and a net loss per share of
$(0.01) and $(0.00) for the years end
December 31, 2007 and 2006, respectively.
CONTINUING
OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES
During
the fiscal year ended December 31, 2007, we received advances totaling $32,591
from entities affiliated with Mark Rentschler. While we are
dependent upon interim
funding provided by management to pay professional fees and expenses, we have no
written finance
agreement with management to provide any continued funding. Moreover, as of
December 31, 2007the Company
had a related party payable to entities affiliated with Mark Rentschler of
$32,701. Although we believe management will continue to fund
the Company on an
as needed basis, we do not have a written agreement requiring such funding. In
addition, future
management funding, will more than likely be in the form of loans, for which the
Company will be liable to pay
back.
The Board
of Directors of the Company has determined that, subject to stockholder
approval, the best course of action for
the Company is to complete a business combination with an existing business. The
Company has limited
liquidity or capital resources. As of the date of the filing of this
Registration Statement, the Company has
no cash or other assets under its control. In the event that the Company cannot
complete a merger or acquisition
and cannot obtain capital needs for ongoing expenses, including expenses related
to maintaining compliance
with the Securities laws and filing requirements of the Securities Exchange Act
of 1934, the Company could
be forced to cease operations. Darwin
Resources currently plans to satisfy its cash requirements for the next 12
months by borrowing from its
officer and director or companies affiliated with its officer and director and
believes it can satisfy its cash
requirements so long as it is able to obtain financing from these affiliated
entities. Darwin Resources currently expects that money borrowed will be used
during the next 12 months to satisfy the Company's
operating costs, professional fees, required periodic filings and for general
corporate purposes. The Company may explore alternative
financing sources, although it currently has not done so. Darwin
Resources will use its limited personnel and financial resources in connection
with seeking new business
opportunities, including seeking an acquisition or merger with an operating
company. It may be expected that
entering into a new business opportunity or business combination will involve
the issuance of a substantial
number of restricted shares of common stock. If such additional restricted
shares of common stock are
issued, the shareholders will experience a dilution in their ownership interest
in the Company. If a substantial
number of restricted shares are issued in connection with a business
combination, a change in control may
be expected to occur.
10
In
connection with the plan to seek new business opportunities and/or effecting a
business combination, the Company may
determine to seek to raise funds from the sale of restricted stock or debt
securities. The Company has
no agreements to issue any debt or equity securities and cannot predict whether
equity or debt financing
will become available at acceptable terms, if at all.
There are
no limitations in the Certificate of Incorporation on the Company's ability to
borrow funds or raise funds through
the issuance of restricted common stock to effect a business
combination.
The
Company currently has no plans to conduct any research and development or to
purchase or sell any significant
equipment.
The
Company does not expect to hire any employees during the next 12 months.
OFF
BALANCE SHEET ARRANGEMENTS
None.
ITEM 3. DESCRIPTION OF
PROPERTY
Darwin
Resources shares office space with its officer and director at 2202 N. West
Shore Blvd, Suite 200, Tampa, FL33607. The Company does not have a lease and
the Company pays no rent for the leased space.
The Company does not own any properties nor does it lease any other properties.
The Company does
not believe it will need to maintain an office at any time in the foreseeable
future in order to carry out its
plan of operations as described herein.
ITEM 4. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of July 15, 2008, the number and percentage of
outstanding shares of common stock
which, according to the information supplied to the Company, were beneficially
owned by (i) each
current director of the Company, (ii) each current executive officer of the
Company, (iii) all current directors and executive officers of the Company as a
group, and (iv) each person who, to the knowledge of
the Company, is the beneficial owner of more than 5% of the Company's
outstanding common stock.
Except as otherwise indicated, the persons named in the table below have sole
voting and dispositive
power with respect to all shares beneficially owned, subject to community
property laws (where applicable).
Owner
Preferred
Shares
Percentage(1)
Mark Rentschler(1)
5,000,000
19.58%
Officers and
directors as a
group (1 person)
5,000,000
19.58%
(1) Based on 20,534,655
shares of common stock and 5,000,000 shares of preferred stock outstanding as of
July 15, 2008.
There are
no arrangements known to management as of July 15, 2008 which may result in a
change in control of Darwin Resources.
11
ITEM 5. DIRECTORS AND
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
following table sets forth the name, age and position held with respect to our
present directors and executive
officers:
NAME
AGE
POSITION
Mark
Rentschler
51
Chief
Executive Officer, President, Secretary, Treasurer, Director since July16, 2007
Our
directors are elected to serve until the next annual meeting of shareholders and
until their respective successors
will have been elected and will have qualified. Officers are not elected for a
fixed term of office but hold
office until their successors have been elected.
Mr,
Rentschler, age 51, has been an officer and director of the Company since July16, 2007. Since 2002, Mr. Rentschler has been a consultant assisting
corporations with the implementation of internal procurement programs and
development of supplier diversity programs. Developing procurement
standards for purchased products and procedures for reviewing, approving and
implementing those standards. Mr. Rentschler attended Lehigh
University, Bethlehem PA. where he received a B.S. Fundamental Science (1979)
and Stanford University, Stanford CA, where he received a Ph.D. in Geology
(1989).
Mr.
Rentschler is also an officer and director of the following companies: Andorra
Capital Corp., Avenue Exchange Corp., Macau Capital Investments, Inc., Scandia
Inc., and Windsor Resources Corp.
ITEM 6. EXECUTIVE
COMPENSATION
No
executive compensation was paid during the years ended December 31, 2007 and
2006, respectively. Darwin Resources has no employment agreements in effect as
of July 15, 2008.
The
Company does not maintain a stock option plan and does not plan on adopting such
a plan in the foreseeable future.
COMPENSATION
OF DIRECTORS
The
Company's sole director is compensated $2,000 per month for services as a
director of the Company. However, all compensation of the director is
deferred until such time as the Company completes a transaction with a merger
candidate. Board compensation is expensed each month and is included in the
related party payable balance in the balance sheets.
ITEM 7. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
During
the last three years, to the knowledge of the Company, there was no person who
had or has a direct or indirect
material interest in any transaction or proposed transaction to which the
Company was or is a party.
Transactions in this context relate to any transaction which exceeds $120,000 or
one percent of the average of
the Company's total assets at year end for the last three completed fiscal
years.
Darwin
does not have any outside directors.
12
ITEM
8. DESCRIPTION OF
SECURITIES
The
Company's authorized capital stock consists of 500,000,000 shares of common
stock, $0.000001 par value, and 8,000,000
shares of preferred stock, $0.000001 par value. As of July 15, 2008 there were
20,534,655 shares of common
stock issued and outstanding and 5,000,000 shares of Preferred Stock, 3,000,000
of which have been designated as Series A Preferred Stock, $0.000001 par value,
and 5,000,000 of which have been designated as Series B Preferred Stock,
$0.000001 par value, issued and outstanding.
COMMON
STOCK
Each
holder of common stock are entitled to 1 vote for each share owned of record on
all matters voted upon by
shareholders, and a majority vote is required for all actions to be taken by
shareholders. In the event of a
liquidation, dissolution or winding-up of the Company, the holders of common
stock are entitled to share equally
and ratably in the assets of the Company, if any, remaining after the payment of
all debts and liabilities
of the Company. The common stock has no preemptive rights, no cumulative voting
rights and no redemption,
sinking fund or conversion provisions.
DIVIDENDS
Holders
of common stock are entitled to receive dividends if, as and when declared by
the Board of Directors out
of funds legally available therefore, subject to any dividend restrictions
imposed by the Company's
creditors. No dividend or other distribution (including redemptions or
repurchases of shares of capital
stock) may be made if, after giving effect to such distribution, the Company
would not be able to pay its debts
as they become due in the normal course of business, or the Company's total
assets would be less than the
minimum of its total liabilities.
PREFERRED
STOCK
Series A
Each
holder of Series A preferred stock is entitled to 1 vote for each share owned of
record on all matters voted upon by
shareholders, and a majority vote is required for all actions to be taken by
shareholders. The Board of Directors of the Company is authorized
(without any further action by the shareholders) to issue
Preferred Stock in one or more series and to fix the voting rights, liquidation
preferences, dividend rates,
conversion rights, redemption rights and terms, including sinking fund
provisions, and certain other rights and
preferences. Satisfaction of any dividend preferences of outstanding Preferred
Stock would reduce the amount of
funds available for the payment of dividends, if any, on the Common Stock. In
addition, holders of
the Preferred Stock would normally be entitled to receive a preference payment
in the event of any
liquidation, dissolution or winding up of the Company before any payment is made
to holders of Common Stock.
In addition, under certain circumstances, the issuance of Preferred Stock may
render more difficult or
tend to discourage a merger, tender offer or proxy contest, the assumption of
control by a holder of a large
block of the Company's securities, or the removal of incumbent management. The
Board of Directors of
the Company, without shareholder approval, may issue Preferred Stock with
dividend, liquidation,
redemption, voting and conversion rights which could adversely affect the
holders of Common Stock.
Series B
Each
holder of Series B preferred stock is entitled to 1,000 votes for each share
owned of record on all matters voted upon by
shareholders, and a majority vote is required for all actions to be taken by
shareholders. Additionally, the preferred stock, as a whole, have
been awarded voting rights such that the voting rights of the preferred
stockholders will always be equal to at least 51% of the voting rights in the
Company's securities, namely common stock and preferred stock. The
Board of Directors of the Company is authorized (without any further action by
the shareholders) to issue
Preferred Stock in one or more series and to fix the voting rights, liquidation
preferences, dividend rates,
conversion rights, redemption rights and terms, including sinking fund
provisions, and certain other rights and
preferences. Satisfaction of any dividend preferences of outstanding Preferred
Stock would reduce the amount of
funds available for the payment of dividends, if any, on the Common Stock. In
addition, holders of
the Preferred Stock would normally be entitled to receive a preference payment
in the event of any
liquidation, dissolution or winding up of the Company before any payment is made
to holders of Common Stock.
In addition, under certain circumstances, the issuance of Preferred Stock may
render more difficult or
tend to discourage a merger, tender offer or proxy contest, the assumption of
control by a holder of a large
block of the Company's securities, or the removal of incumbent management. The
Board of Directors of
the Company, without shareholder approval, may issue Preferred Stock with
dividend, liquidation,
redemption, voting and conversion rights which could adversely affect the
holders of Common Stock.
13
At
present, Darwin Resources has no intention to issue any new preferred shares nor
adopt any additional series, preferences
or other classification of its preferred shares.
OPTIONS
AND WARRANTS
None
TRANSFER
AGENT
The
transfer agent for the Company's common stock shares is American Stock Transfer
& Trust Company, 59 Maiden Lane, Plaza Level, New York, New York,
10038: Telephone 800-937-5449.
PART
II
ITEM 1. MARKET PRICE OF AND
DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS MARKET
INFORMATION
The
Company's common stock is traded on the "Pink Sheets" under the symbol
"DRWN.PK". Such trading of our common
stock is limited and sporadic. To the best knowledge of the Company, there has
been no active trading
activity for approximately the past two years.
The table
below sets forth the high and low bid quotations for the Company's Common Stock
for each quarter of
fiscal 2006 and fiscal 2007. The quotations below reflect inter-dealer prices,
without retail mark- up, mark-down
or commission and may not represent actual transactions:
At the
time of filing of this Registration Statement, there is no common stock that is
subject to outstanding options or warrants to purchase or securities convertible
into, common equity of the
Company.
14
It is the
position of the Securities and Exchange Commission, in a No Action Letter to OTC
Compliance at FINRA, dated
January 21, 2000, that Rule 144 is not available for resale transactions
involving securities sold by
promoters and affiliates of a blank check company, and their transferees, and
anyone else who has been issued
securities from a blank check company, and that securities issued by a blank
check company to promoters and
affiliates, and their transferees, can only be resold through registration under
the Act. Promoters and
affiliates of a blank check company will be considered underwriters under the
Securities Act when
reselling the securities of a blank check company. At present, the Company is a
blank check company with
no revenues and has no specific business plan or purpose. The Company's business
plan is to seek new
business opportunities or to engage in a merger or acquisition with an
unidentified company. As a result, the
Company is a blank check company.
The
ability of individual shareholders to trade their shares in a particular state
may be subject to various rules and
regulations of that state. A number of states require that an issuer's
securities be registered in their state or
appropriately exempted from registration before the securities are permitted to
trade in that state. Darwin
Resources is not and is not proposing to publicly offer any securities at this
time. From
time-to-time the Company may grant options or warrants, or promise registration
rights to certain shareholders.
The Company has no control over the number of shares of its common stock that
its shareholders
sell. The price of the Company's stock may be adversely affected if large
amounts are sold in a short
period. The Company's
shares most likely will be subject to the provisions of Section 15(g) and Rule
15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule.
Section 15(g) sets forth certain requirements for transactions in penny stocks
and Rule 15g-9(d)(1) incorporates the definition of
penny stock as that used in Rule 3a51-1 of the Exchange Act.
The SEC
generally defines penny stock to be any equity security that has a market price
less than $5.00 per share,
subject to certain exceptions. Rule 3a51-1 provides that any equity security is
considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set
by the SEC; authorized for quotation on The NASDAQ Stock Market; issued by a
registered investment
company; excluded from the definition on the basis of price (at least $5.00 per
share) or the issuer's net
tangible assets; or exempted from the definition by the SEC. Broker-dealers who
sell penny stocks to
persons other than established customers and accredited investors (generally
persons with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with their
spouse), are subject to
additional sales practice requirements.
For
transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of
such securities and must have received the purchaser's written consent to the
transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
rules require the delivery,
prior to the first transaction, of a risk disclosure document relating to the
penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative,
and current quotations for the securities. Finally, monthly statements must be
sent to clients disclosing
recent price information for the penny stocks held in the account and
information on the limited market in
penny stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a
market in our common stock and may affect the ability of shareholders to sell
their shares. As of July15, 2008, there were approximately 163 holders of record of our common stock.
This number does not
include an indeterminate number of shareholders whose shares are held by brokers
in street name.
ITEM
2. LEGAL
PROCEEDINGS
On June21, 2007, pursuant to its Order Granting the "plaintiff’s motion for acceptance
of receiver’s report and release of receiver" (the "Order") and to close the
case, Brian Goldenberg as receiver of Darwin Resources pursuant to Florida
Statue 607, the Eleventh Judicial Circuit, In and For Miami-Dade County, Florida
was released as receiver of the Company. The purpose of
appointing the receiver was to determine if the Company could be reactivated and
operated in such a manner so that the Company can be productive,
successful. Pursuant to Section 607.1432 of the Florida Statutes
alternative remedies to dissolution and liquidation would be determine as to
whether the Company could be saved.
The
Company's sole officer and director is not aware of any threatened or pending
litigation to which the Company
is a party or which any of its property is the subject and which would have any
material, adverse
effect on the Company.
ITEM 3. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS
In its
two most recent fiscal years or any later interim period, the Company has had no
disagreements with its
independent accountants.
15
ITEM 4. RECENT SALES OF
UNREGISTERED SECURITIES
The
following is a list of unregistered securities sold by the Company within the
last three years including the date
sold, the title of the securities, the amount sold, the identity of the person
who purchased the securities,
the price or other consideration paid for the securities, and the section of the
Securities Act of 1933 under
which the sale was exempt from registration as well as the factual basis for
claiming such exemption.
On June28, 2007, in accordance with the Order, the Company sold 5,000,000 shares of its
Series B preferred stock to DSC in exchange for $50,000. The Company believes
that the issuance and sale of
the restricted shares was exempt from registration pursuant to Section 4(2) of
the Act as privately
negotiated, isolated, non-recurring transactions not involving any public
solicitation. An appropriate
restrictive legend is affixed to the stock certificates issued in such
transactions.
ITEM 5. INDEMNIFICATION OF
DIRECTORS AND OFFICERS
Darwin
Resources Inc. is a Delaware corporation. Section 252 of the Delaware General
Corporation Law (DGCL)
provides that the articles of incorporation of a Delaware corporation may
contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
shareholders for monetary damages for
breach of fiduciary duty as a director, except that any such provision may not
eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) acts specified in Section
7-108-403 (concerning unlawful distributions), or (iv) any transaction from
which a director directly or indirectly
derived an improper personal benefit. The Company's articles of incorporation
contain a provision
eliminating the personal liability of directors to Darwin Resources or Darwin
Resources shareholders for monetary damages to the fullest extent provided by
the DGCL.
Section
242 of the DGCL provides that a Delaware corporation must indemnify a person who
was wholly successful,
on the merits or otherwise, in defense of any threatened, pending, or completed
action, suit, or proceeding,
whether civil, criminal, administrative, or investigative and whether formal or
informal (a "Proceeding"),
in which he or she was a party because the person is or was a director, against
reasonable expenses
incurred by him or her in connection with the Proceeding, unless such indemnity
is limited by the corporation's
articles of incorporation. The Company's articles of incorporation do not
contain any such limitation.
Section
242 of the DGCL provides that a Delaware corporation may indemnify a person made
a party to a Proceeding
because the person is or was a director against any obligation incurred with
respect to a Proceeding to
pay a judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee
benefit plan) or reasonable expenses incurred in the Proceeding if the person
conducted himself or herself in
good faith and the person reasonably believed, in the case of conduct in an
official capacity with the
corporation, that the person's conduct was in the corporation's best interests
and, in all other cases, his or her conduct
was at least not opposed to the corporation's best interests and, with respect
to any criminal proceedings,
the person had no reasonable cause to believe that his or her conduct was
unlawful. The Company's
articles of incorporation and bylaws allow for such indemnification. A
corporation may not indemnify a
director in connection with any Proceeding by or in the right of the corporation
in which the director was
adjudged liable to the corporation or, in connection with any other Proceeding
charging that the director
derived an improper personal benefit, whether or not involving actions in an
official capacity, in which
Proceeding the director was judged liable on the basis that he or she derived an
improper personal benefit. Any
indemnification permitted in connection with a Proceeding by or in the right of
the corporation is limited to
reasonable expenses incurred in connection with such Proceeding.
Under 242
of the DGCL, unless otherwise provided in the articles of incorporation, a
Delaware corporation may indemnify
an officer, employee, fiduciary, or agent of the corporation to the same extent
as a director and may
indemnify such a person who is not a director to a greater extent, if not
inconsistent with public policy and if
provided for by its bylaws, general or specific action of its board of directors
or shareholders, or contract.
The Company's articles of incorporation provide for indemnification of
directors, officers, employees,
fiduciaries and agents of WVR to the full extent permitted by Delaware law.
16
PART
F/S
The
Company's audited financial statements for the fiscal years ended December 31,2007 and 2006 are attached hereto as F-1 through F-10.
17
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors of Darwin Resources, Inc.
We have
audited the accompanying balance sheets of Darwin Resources, Inc. (a development
stage company) (the “Company”) as of December 31, 2007 and 2006, and the related
statements of operations, changes in stockholders’ deficit and cash flows for
the years ended December 31, 2007 and 2006. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based upon our audits.
We
conducted our audits in accordance with the standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits 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 Darwin Resources, Inc., (a
development stage company), as of December 31, 2007 and 2006, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 3 to the financial statements,
the Company has no present revenue. The Capitalization of the Company’s business
plan is also dependent upon the amount of additional funds the Company is able
to raise in the near future and the time and expenses the Company incurs as it
searches for a merger candidate. The Company’s capital resources as of December31, 2007 are not sufficient to sustain operations or complete its planned
activities for the upcoming year unless the Company raises additional funds.
These conditions raise substantial doubt about the Company’s ability to continue
as a going concern. Management’s plans regarding these matters are described in
Note 3 to the financial statements. The financial statements do not include any
adjustments that might result from the outcome of the uncertainty.
Darwin
Resources, Inc. (the "Company") was originally incorporated on June 24, 1993 in
the State of Florida as Vitech America, Inc. On September 28, 2007,
the Company re-incorporated in the State of Delaware, with the Delaware
Corporation being the surviving entity.
The
Company was originally engaged as a manufacturer and distributor of computer
equipment and related markets in Brazil. The Company evolved into a
vertically integrated manufacturer and integrator of complete computer systems
and business network systems selling directly to end-users. A
diversified customer base widely distributed throughout Brazil was
developed. In September of 1996, the company had over 8,000 customers
and established a clearly defined channel for marketing additional hardware
products, such as updated peripheral products, new computers, new network
products as well as services, such as internet access services. The
company marketed its products throughout Brazil under the tradenames EasyNet,
MultiShow, and Vitech Vision.
On August17, 2001, the Company filed a voluntary Chapter 7 petition under the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of
Florida (case no. 01-18857). As a result of the filing, all of the Company's
properties were transferred to a United States Trustee and the Company
terminated all of its business operations. The Bankruptcy Trustee has disposed
of all of the assets. On March 14, 2007 the Chapter 7 bankruptcy was closed by
the U.S. Bankruptcy Court Southern District of Florida.
Since
August 2001, the Company has not engaged in any business operations, and has not
filed the reports required by the Securities and Exchange Commission. In
addition, on or about October 4, 2002, the Florida Secretary of State revoked
the Company's corporate charter. Accordingly, the Company had abandoned its
business.
On June21, 2007, pursuant to its Order Granting the "plaintiff’s motion for acceptance
of receiver’s report and release of receiver" (the "Order") and to close the
case, Brian Goldenberg as receiver of Darwin Resources pursuant to Florida
Statue 607, the Eleventh Judicial Circuit, In and For Miami-Dade County, Florida
was released as receiver of the Company. The purpose of
appointing the receiver was to determine if the company could be reactivated and
operated in such a manner so that the Company can be productive,
successful. Pursuant to Section 607.1432 of the Florida Statutes
alternative remedies to dissolution and liquidation would be determine as to
whether the Company could be saved. The actions of the receivership
include:
- To
settle the affairs, collect the outstanding debts, sell and convey the property,
real and personal
- To
demand, sue for, collect, receive and take into his or their possession all the
goods and chattels, rights and credits, moneys and effects, lands and tenements,
books, papers, choses in action, bills, notes and property, of every description
of the corporation
- To
institute suits at law or in equity for the recovery of any estate, property,
damages or demands existing in favor of the corporation
F-5
-
Provided that the authority of the receivership is to continue the business of
the corporation and not to liquidate its affairs or distribute its
assets
- To
exercise the rights and authority of a Board of Directors and Officers in
accordance with state law, the articles and bylaws
In
accordance with the Order, Mr. Goldenberg appointed Mark Rentschler as sole
interim Director and President. In September 2007, the Company changed its name
to Darwin Resources, Inc. The Company raised operating capital through the sale
of equity securities, which the Company used to recruit and organize management,
and to finance the initial costs associated with corporate strategic planning
and development.
CHANGE
OF CONTROL
On May15, 2007,Mark Rentschler contributed an estimated $50,000 as paid in
capital to the Company. The Company is to use these funds to pay the costs and
expenses necessary to revive the registrant's business operations. Such expenses
include, without limitation, fees to reinstate the Company's corporate charter
with the state of Florida; payment of all past due franchise taxes; settling all
past due accounts with the registrant's transfer agent; accounting and legal
fees; and costs associated with bringing the registrant current with its filings
with the Securities and Exchange Commission, etc.
On June28, 2007, in accordance with the order and in lieu of repayment of Mark
Rentschler’s capital contribution, the Company issued DSC 5,000,000 shares of
its newly created Series B Preferred Stock, which represented approximately
19.58% of the total ownership of the Company as of June 6, 2008 in accordance
with the order. The preferred stock carried voting rights which effectively made
DCS the holder of approximately 99% of the voting rights in the Company's
outstanding common and preferred stock. The voting rights also
provided that in no event will the preferred stock voting rights consist of less
than 51% of the total voting rights in the Company's outstanding common and
preferred stock.
On
September 28, 2007, Darwin Resources Inc. was incorporated in Delaware for the
purpose of merging with Vitech
America, Inc., a Florida Corporation, so as to effect a re-domicile to
Delaware. The Delaware Corporation is authorized to issue 500,000,000
shares of $0.000001 par value common stock and 8,000,000 shares of $0.000001 par
value preferred stock. On September 28, 2007, both Vitech America, the Florida
corporation and Darwin Resources, the Delaware corporation, signed and filed
Articles of Merger, with the respective states, pursuant to which the Delaware
corporation, Darwin Resources, was the surviving entity. The
shareholders of record of Vitech America, Inc. received 1 share of new common
stock for every 1 share of Vitech America common stock and 1 share for every 1
share of preferred stock they owned.
On
September 28, 2007, the Company changed its name to Darwin Resources Inc. The
name was not meant to be
indicative of the Company's business plan or purpose. As more fully described
herein under the heading
"Current Business Plan", Darwin Resources’s current business plan is to seek,
investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act registered
corporation.
On June21, 2007 , the a majority of the stockholders of record of the Company approved
a plan of quasi-reorganization which called for restatement of accounts to
eliminate the accumulated deficit and related capital accounts on the Company's
balance sheet. The quasi-reorganization was effective June 21, 2007.
Since June 21, 2007, the Company has been in the development stage, and has not
commenced principal operations.
F-6
Darwin
Resources, Inc is a development stage company as described by Statements of the
Financial Accounting Standards Board No. 7 (“SFAS 7.”) SFAS states that a
business is considered to be in the development stage if it is devoting
substantially all of its efforts to establishing a new business and either of
the following conditions exists:
1. Planned principal operations have not
commenced.
The
Company’s management believes the Company is a development stage entity as it is
in the process of attempting to acquire assets, namely that of a potential
albeit currently unidentified merger candidate, and is also exploring various
forms of financing and capital structures in order to facilitate a possible
merger with a merger candidate. The Company has considered SFAS 7, paragraph 11,
footnote 7, and has determined that the Company qualifies as a dormant entity
which has been reactivated to undertake development stage operations, and as
such, has determined June 21, 2007 to be the inception date of the development
stage.
The
Company anticipates that after an exhaustive search, the Company’s management
will have identified and entered into a letter of intent to merge with another
company by the end of 2008, if not sooner. As of December 31, 2007, the company
had a total deficit of $103,538 from operations in pursuit of this
objective.
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company has a deficit
accumulated during the development stage of $103,538 as of December 31,2007.
The
Company is exploring sources to obtain equity or debt financing. The Company
intends to participate in one or more as yet unidentified business ventures,
which management may select after reviewing the business opportunities for its
profit or growth potential.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Statement
The SEC
has issued Financial Reporting Release No. 60, “Cautionary Advice Regarding
Disclosure About Critical Accounting Policies,” (“FRR 60”), suggesting that
companies provide additional disclosure and commentary on their most critical
accounting policies. In FRR 60, the SEC defined the most critical accounting
policies as the ones that are most important to the portrayal of a company's
financial condition and operating results, and require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. The methods, estimates and
judgments the Company uses in applying these most critical accounting policies
have a significant impact on the results the Company reports in its financial
statements. The Company believes that the critical accounting policies and
procedures listed below, among others, affect its more significant judgments and
estimates used in the preparation of the Company's consolidated financial
statements.
Cash
and Cash Equivalents
For
purposes of reporting cash flows, the Company considers all highly liquid debt
instruments purchased with maturity of three months or less to be cash
equivalents .
F-7
Use
of Estimates
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 and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Estimates and assumptions are periodically reviewed and the effects
of revisions are reflected in the consolidated financial statements in the
period in which they are determined to be necessary.
Fair
Value of Financial Instruments
Statement
of Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments," requires disclosure of the fair value of certain
financial instruments. The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and short-term borrowings, as reflected in the
balance sheets, approximate fair value because of the short-term maturity of
these instruments.
Concentrations
of Credit Risk
Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash, cash equivalents and
related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit. The Company periodically reviews its
trade receivables in determining its allowance for doubtful
accounts.
Income
Taxes
The
Company follows Statement of Financial Standards (SFAS) No. 109, “Accounting for
Income Taxes” (SFAS No. 109) and FASB Interpretation No. 48, ”Accounting for
Uncertainty in Income Taxes — an interpretation of FASB Statement No.
109” (“FIN No. 48”). Under SFAS No. 109, which establishes financial accounting
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. It establishes financial accounting assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Such amounts were
not material during the years ended December 31, 2007 and 2006,
respectively.
FIN No.
48 clarifies the accounting for uncertainty in income taxes recognized in an
entity’s financial statements in accordance with SFAS No. 109 and prescribes a
recognition threshold and measurement attributes for financial statement
disclosure of tax positions taken or expected to be taken on a tax return. Under
FIN No. 48, the impact of an uncertain income tax position(s) on the income tax
return must be recognized at the largest amount that is more-likely-than-not to
be sustained upon audit by the relevant taxing authority. An uncertain income
tax position will not be recognized if it has less than a 50% likelihood of
being sustained. Additionally, FIN No. 48 provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. Such amounts required to be recorded under Fin 48
were not material during the years ended December 31, 2007 and 2006,
respectively.
Revenue
Recognition
Revenues
are recognized in the period that services are provided. For revenue from
product sales, the Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, Revenue Recognition
("SAB104"), which supersedes Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements ("SAB101"). SAB 101 requires that four basic criteria must be
met before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectability is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectability of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period that the related sales are recorded. The Company defers any revenue for
which the product has not been delivered or is subject to refund until such time
that the Company and the customer jointly determine that the product has been
delivered or no refund will be required. Payments received in advance are
deferred until the trusses are built and shipped to customers.
F-8
SAB 104
incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"), Multiple-Deliverable Revenue
Arrangements. EITF 00-21 addresses accounting for arrangements that may
involve the delivery or performance of multiple products, services and/or rights
to use assets. The effect of implementing EITF 00-21 on the Company's
consolidated financial position and results of operations was not
significant.
Related
Party Transactions
Related
party transactions are fully disclosed within Darwin Resources, Inc.’s financial
statements for the years ended December 31, 2007 and 2006,
respectively.
The
Company utilizes SFAS No. 128, “Earnings per Share” to calculate earnings/loss
per share. Basic earnings/loss per share is computed by dividing the
earnings/loss available to common stockholders (as the numerator) by the
weighted-average number of common shares outstanding (as the denominator).
Diluted earnings/loss per share is computed similar to basic earnings/loss per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if all potential
common stock (including common stock equivalents) had all been issued, and if
such additional common shares were dilutive. Under SFAS No. 128, if the
additional common shares are dilutive, they are not added to the denominator in
the calculation. Where there is a loss, the inclusion of additional common
shares is anti-dilutive (since the increased number of shares reduces the per
share loss available to common stock holders).
Stock-Based
Compensation
In
December 2004, FASB issued Statement No. 123(R), Share-Based Payment, which
establishes accounting standards for transactions in which an entity receives
employee services in exchange for (a) equity instruments of the entity or
(b) liabilities that are based on the fair value of the entity’s equity
instruments or that may be settled by the issuance of equity instruments.
Effective July 1, 2000, the Company adopted SFAS 123(R), which requires the
Company to recognize the grant-date fair value of stock options and equity based
compensation issued to employees in the statement of operations. The statement
also requires that such transactions be accounted for by using the
fair-value-based method, thereby eliminating use of the intrinsic method of
accounting in APB No. 25, Accounting for Stock Issued to
Employees, which was permitted under Statement No. 123, as originally
issued.
Stock
based compensation for the years ended December 31, 2007 and 2006 was $0 and $0,
respectively.
Foreign
currency translation
The
reporting currency of the Company is the US dollar. The Company’s principal
operating subsidiary established in Brazil utilizes the local currency, the
"real," as the functional currency. Results of operations and cash flows are
translated at average exchange rates during the period, and assets and
liabilities are translated at the unified exchange rate as quoted by the Wall
Street Journal at the end of the period. Translation adjustments resulting from
this process are included in accumulated other comprehensive income in
stockholders’ equity on the balance sheets. Transaction gains and losses that
arise from exchange rate fluctuations on transactions denominated in a currency
other than the functional currency are included in the results of operations as
incurred.
Reclassifications
Certain
reclassifications have been made to the 2006 financial statements to conform to
classifications used in the 2007 financial statements.
Recently
Issued Accounting Pronouncements
In
June 2006, the FASB issued FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes-an interpretation of FASB Statement No.
109 ("FIN 48”), which clarifies the accounting for uncertainty in
income tax positions. This Interpretation requires that the Company recognize in
the financial statements the impact of a tax position that is more likely than
not to be sustained upon examination based on the technical merits of the
position. The provisions of FIN 48 were implemented in fiscal year 2007 and did
not impact the financial statements.
F-9
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
No. 157”). SFAS No. 157 establishes a framework for measuring fair value and
expands disclosures about fair value measurements. The changes to current
practice resulting from the application of this statement relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. We adopted the provisions of
SFAS No. 157 at the date of our inception. The adoption of SFAS No. 157 did not
have a material impact on our financial position, results of operations or cash
flows, however, this pronouncement may have an effect in the
future.
In
September 2006, the Securities and Exchange Commission (“SEC”) released Staff
Accounting Bulletin No. 108, Considering the Effects of Prior Misstatements in
Current Year Financial Statements (”SAB 108”). SAB 108 provides guidance on how
the effects of the carry over or reversal of prior year financial statement
misstatements should be considered in quantifying a current year misstatement.
Prior practice allowed the evaluation of materiality on the basis of (i) the
error quantified as the amount by which the current year income statement was
misstated (rollover method) or (ii) the cumulative error quantified as the
cumulative amount by which the current year balance sheet was misstated (iron
curtain method). Reliance on either method in prior years could have resulted in
misstatement of the financial statements. The guidance provided in SAB 108
requires both methods to be used in evaluating materiality. Immaterial prior
year errors may be corrected with the filing of prior year financial statements
after adoption. The cumulative effect of the correction would be reflected in
the opening balance sheet with appropriate disclosure of the cause of the error
and that error had been deemed to be immaterial in the past. The adoption of
this pronouncement did not have any material effects on our financial position,
results of operation, or cash flows.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities — Including an Amendment of
FASB Statement No. 115, “(SFAS No. 159”), which is effective for fiscal years
beginning after November 15, 2007. SFAS No. 159 permits an entity to choose to
measure many financial instruments and certain other items at fair value at
specified election dates. Subsequent unrealized gains and losses on items for
which the fair value option has been elected will be reported in earnings The
adoption of this pronouncement did not have any material effects on our
financial position, results of operation, or cash flows, however, this
pronouncement may have an effect in the future.
In June
2007, the EITF reached a consensus on EITF Issue No. 06-11, “Accounting for
Income Tax Benefits on Dividends on Share-Based Payment Awards” (“EITF 06-11”).
EITF 06-11 addresses share-based payment arrangements with dividend protection
features that entitle employees to receive (a) dividends on equity-classified
non-vested shares, (b) dividend equivalents on equity-classified non-vested
share units, or (c) payments equal to the dividends paid on the underlying
shares while an equity-classified share option is outstanding, when those
dividends or dividend equivalents are charged to retained earnings under SFAS
123R and result in an income tax deduction for the employer. A realized income
tax benefit from dividends or dividend equivalents that are charged to retained
earnings are paid to employees for equity-classified non-vested shares,
non-vested equity share units, and outstanding equity share options should be
recognized as an increase in additional paid in capital. The amount recognized
in additional paid-in capital for the realized income tax benefit from dividends
on those awards should be included in the pool of excess tax benefits available
to absorb potential future tax deficiencies on share-based payments. We do not
expect the adoption of this pronouncement to have a material impact on our
financial position or results of operations.
NOTE
3 - GOING CONCERN
The
Company’s financial statements have been prepared on a going concern basis,
which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the normal course of business. The Company had
cumulative losses of $103,538 as of December 31, 2007. The Company continues to
incur expenses as a result of being a public company and also during its search
for a merger candidate. The ability of the Company to operate as a going concern
depends upon its ability to obtain outside sources of working capital and/or
generate positive cash flow from operations. Management is aware of these
requirements and is undertaking specific measures to address these liquidity
concerns. Specifically, the Company has refocused its efforts on suitable merger
candidates. The Company believes its outlook is promising and in particular that
internal cashflows will improve and sources of external financing will continue
to be available upon demand. Notwithstanding the foregoing, there can be no
assurance that the Company will be successful in obtaining such financing, that
it will have sufficient funds to execute its business plan or that it will
generate positive operating results. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
F-10
NOTE 4
- RELATED PARTY PAYABLE
The table
below details transactions for the related party payable to entities affiliated
with the Company's President during the years ended December 31, 2007 and 2006
respectively:
The FASB
has issued Statement of Financial Accounting Standards No. 109 (“SFAS 109”),
“Accounting for Income Taxes”, which requires the asset and liability method of
accounting for income taxes. Under the asset and liability method, deferred
income taxes are recognized for the tax consequences of “temporary differences”
by applying enacted statutory tax rates applicable to future years to
differences between the financial statement carrying amounts and the tax basis
of existing assets and liabilities.
The
following is a reconciliation of the provision for income taxes at the United
States federal income tax rate to the income taxes reflected in the Statement of
Operations:
The
Company utilizes SFAS No. 128, "Earnings per Share" to calculate gain/loss per
share. Basic earnings/loss per share is computed by dividing the earnings/loss
available to common stockholders (as the numerator) by the weighted-average
number of common shares outstanding (as the denominator). Diluted earnings/loss
per share is computed similar to basic earning/loss per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if all potential common stock (including common
stock equivalents) had all been issued, and if such additional common shares
were dilutive.
Basic Earning Per Share Computation
2007
2006
Net
(Loss) Income
$
(103,538
)
$
(110
)
(Loss)
Income available to common stockholders
$
(103,538
)
$
(110
)
Basic
(Loss) Income per common share
$
(0.01
)
$
(0.00
)
Weighted-average
shares used to compute:
22
Basic
(Loss) Income per share
20,534,655
20,534,655
F-12
Diluted Earning Per Share Computation
2007
2006
Net
(Loss) Income
$
(103,538
)
$
(110
))
(Loss)
Income available to common stockholders
$
(103,538
)
$
(110
))
Diluted
(Loss) Income per common share
$
(0.01
)
$
(0.00
)
Weighted-average
shares used to compute:
Diluted
(Loss) Income per share
20,534,655
20,534,655
Under
SFAS No. 128, where there is a loss, the inclusion of additional common shares
is anti-dilutive (since the increased number of shares reduces the per share
loss available to common stock holders), and if the additional common shares are
anti-dilutive, they are not added to the denominator in the
calculation.
NOTE 8 – STOCKHOLDERS
DEFICIT
As of
December 31, 2007, the Company had 500,000,000 shares of common stock, par value
$0.000001, and 8,000,000 shares of preferred stock, $0.000001 par value,
authorized to be issued.
On
September 28, 2007, the Company re-incorporated in the State of Delaware with
the Delaware Corporation being the surviving entity. Upon the
re-incorporation and through the date of this report, the rights and preferences
of the Company’s common stock and preferred stock are identified
below:
Common
stock:
1.
Authorized
shares are 500,000,000
2.
Voting
rights are equal to one vote per share of
stock
3.
Par
value of $0.000001
Series A
Preferred Stock:
1.
Authorized
shares are 3,000,000
2.
Voting
rights are equal to one vote per share of
stock
3.
Par
value of $0.000001
Series B
Preferred Stock:
1.
Authorized
shares are 5,000,000
2.
Voting
rights are equal to the larger of 1,000 votes per share of stock or 51% of
the total voting rights of the Company’s stockholders when considering all
classes of stock.
3.
Par
value of $0.000001
4.
The
right to the majority of the seats on the Company’s board of
directors
On June28, 2007, the company’s sole officer and director, Mark Rentschler, purchased
5,000,000 shares of the company’s Series B Preferred Stock, issued to DSC, by
court order dated June 21, 2007 in lieu of repayment of approximately $50,000 in
debts Mark Rentschler had incurred during the process of managing the affairs of
the company during 2007 and 2006, respectively.
Adjustments
to reconcile net loss to net cash used in operating
activities:
Changes
in assets and liabilities
Accrued
expenses
19,950
-
40,897-
NET
CASH USED IN OPERATING ACTIVITIES
(15,750
)
-
(98,341
)
CASH
FLOWS FROM FINANCING ACTIVITIES
19,782
Proceeds
from sale of stock
-
-
50,000
Proceeds
from related party payable
15,750
-
48,341
NET
CASH PROVIDED BY FINANCING ACTIVITIES
15,750
-
98,341
EFFECT
OF EXCHANGE RATE CHANGES ON CASH
-
-
-
DECREASE
IN CASH
-
-
-
CASH
- BEGINNING OF PERIOD
$
-
$
-
$
-
CASH
- END OF PERIOD
$
-
$
-
$
-
Supplemental
disclosure:
Cash
paid for interest
$
-
$
-
$
-
Cash
paid for income taxes
$
-
$
-
$
-
NONCASH
INVESTING AND FINANCING ACTIVITIES
Other
$
-
$
-
$
-
The
accompanying notes are an integral part of these financial
statements.
F-16
DARWIN RESOURCES,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1 – NATURE OF OPERATIONS
Darwin
Resources, Inc. (the "Company") was originally incorporated on June 24, 1993 in
the State of Florida as Vitech America, Inc. On September 28, 2007,
the Company re-incorporated in the State of Delaware, with the Delaware
Corporation being the surviving entity.
NOTE
2 - BASIS OF PRESENTATION
On June21, 2007, the a majority of the stockholders of record of the Company approved a
plan of quasi-reorganization which called for restatement of accounts to
eliminate the accumulated deficit and related capital accounts on the Company's
balance sheet.. The quasi-reorganization was effective June 21,2007. Since June 21, 2007, the Company has been in the development
stage, and has not commenced principal operations.
Darwin
Resources, Inc is a development stage company as described by Statements of the
Financial Accounting Standards Board No. 7 (“SFAS 7.”) SFAS states that a
business is considered to be in the development stage if it is devoting
substantially all of its efforts to establishing a new business and either of
the following conditions exists:
1. Planned principal operations have not
commenced.
2. Planned operations have commenced, but
there has been no significant revenue therefrom.
The
Company’s management believes the Company is a development stage entity as it is
in the process of attempting to acquire assets, namely that of a potential
albeit currently unidentified merger candidate, and is also exploring various
forms of financing and capital structures in order to facilitate a possible
merger with a merger candidate. The Company has considered SFAS 7, paragraph 11,
footnote 7, and has determined that the Company qualifies as a dormant entity
which has been reactivated to undertake development stage operations, and as
such, has determined June 21, 2007 to be the inception date of the development
stage.
The
Company anticipates that after an exhaustive search, the Company’s management
will have identified and entered into a letter of intent to merge with another
company by the end of 2008, if not sooner. As of June 30, 2008, the company had
a total deficit of $139,238 from operations in pursuit of this
objective.
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company has a deficit
accumulated during the development stage of $139,238 as of June 30,2008.
The
Company is exploring sources to obtain equity or debt financing. The Company
intends to participate in one or more as yet unidentified business ventures,
which management may select after reviewing the business opportunities for its
profit or growth potential.
These
condensed interim consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of
America (“US GAAP”).
F-17
The
interim results of operations are not necessarily indicative of the results to
be expected for the fiscal year ending December 31, 2008. The Company’s
financial statements contained herein are unaudited and, in the opinion of
management, contain all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of financial position, results of
operations and cash flows for the period presented. The Company’s accounting
policies and certain other disclosures are set forth in the notes to the
consolidated financial statements contained in the Company’s Form 10 for the
years ended December 31, 2007 and 2006, respectively, enclosed herewith. These
financial statements should be read in conjunction with the Company’s audited
consolidated financial statements and notes thereto. The preparation of
financial statements in conformity with US GAAP 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.
NOTE
3 - GOING CONCERN
The
Company’s financial statements have been prepared on a going concern basis,
which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the normal course of business. The Company had
cumulative losses of $139,238 as of June 30, 2008. The Company continues to
incur expenses as a result of being a public company and also during its search
for a merger candidate. The ability of the Company to operate as a going concern
depends upon its ability to obtain outside sources of working capital and/or
generate positive cash flow from operations. Management is aware of these
requirements and is undertaking specific measures to address these liquidity
concerns. Specifically, the Company has refocused its efforts on suitable merger
candidates. The Company believes its outlook is promising and in particular that
internal cashflows will improve and sources of external financing will continue
to be available upon demand. Notwithstanding the foregoing, there can be no
assurance that the Company will be successful in obtaining such financing, that
it will have sufficient funds to execute its business plan or that it will
generate positive operating results. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
NOTE 4
- RELATED PARTY PAYABLE
The table
below details transactions for the related party payable to entities affiliated
with the Company's President during the six months ended June 30,2008:
The FASB
has issued Statement of Financial Accounting Standards No. 109 (“SFAS 109”),
“Accounting for Income Taxes”, which requires the asset and liability method of
accounting for income taxes. Under the asset and liability method, deferred
income taxes are recognized for the tax consequences of “temporary differences”
by applying enacted statutory tax rates applicable to future years to
differences between the financial statement carrying amounts and the tax basis
of existing assets and liabilities.
The
following is a reconciliation of the provision for income taxes at the United
States federal income tax rate to the income taxes reflected in the Statement of
Operations:
As of the
date of this report, the Company was not aware of any threatened or pending
legal proceedings against it.
F-19
NOTE 7
- LOSS PER SHARE
The
Company utilizes SFAS No. 128, "Earnings per Share" to calculate gain/loss per
share. Basic earnings/loss per share is computed by dividing the earnings/loss
available to common stockholders (as the numerator) by the weighted-average
number of common shares outstanding (as the denominator). Diluted earnings/loss
per share is computed similar to basic earning/loss per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if all potential common stock (including common
stock equivalents) had all been issued, and if such additional common shares
were dilutive.
Basic Earning Per Share Computation
2008
2007
Net
(Loss) Income
$
(35,700
)
$
-
(Loss)
Income available to common stockholders
$
(35,700
)
$
-
Basic
(Loss) Income per common share
$
(0.00
)
$
(0.00
)
Weighted-average
shares used to compute:
Basic
(Loss) Income per share
20,534,655
20,534,655
Diluted Earning Per Share Computation
2008
2007
Net
(Loss) Income
$
(35,700
)
$
-
(Loss)
Income available to common stockholders
$
(35,700
)
$
-
Diluted
(Loss) Income per common share
$
(0.00
)
$
(0.00
)
Weighted-average
shares used to compute:
2
Diluted
(Loss) Income per share
20,534,655
20,534,655
Under
SFAS No. 128, where there is a loss, the inclusion of additional common shares
is anti-dilutive (since the increased number of shares reduces the per share
loss available to common stock holders), and if the additional common shares are
anti-dilutive, they are not added to the denominator in the
calculation.
NOTE 8 – STOCKHOLDERS
DEFICIT
As of
December 31, 2007, the Company had 500,000,000 shares of common stock, par value
$0.000001, and 8,000,000 shares of preferred stock, $0.000001 par value,
authorized to be issued.
F-20
On
September 28, 2007, the Company re-incorporated in the State of Delaware with
the Delaware Corporation being the surviving entity. Upon the
re-incorporation and through the date of this report, the rights and preferences
of the Company’s common stock and preferred stock are identified
below:
Common
stock:
4.
Authorized
shares are 500,000,000
5.
Voting
rights are equal to one vote per share of
stock
6.
Par
value of $0.000001
Series A
Preferred Stock:
4.
Authorized
shares are 3,000,000
5.
Voting
rights are equal to one vote per share of
stock
6.
Par
value of $0.000001
Series B
Preferred Stock:
5.
Authorized
shares are 5,000,000
6.
Voting
rights are equal to the larger of 1,000 votes per share of stock or 51% of
the total voting rights of the Company’s stockholders when considering all
classes of stock.
7.
Par
value of $0.000001
8.
The
right to the majority of the seats on the Company’s board of
directors
On June28, 2007, the company’s sole officer and director, Mark Rentschler, purchased
5,000,000 shares of the company’s series B Preferred Stock by court order dated
June 21, 2007 in lieu of repayment of approximately $50,000 in debts Mark
Rentschler had incurred during the process of managing the affairs of the
company during 2007 and 2006, respectively.
In
accordance with Section 13 or 15(d) of the Exchange Act, the Company has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
