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EXCEL - IDEA: XBRL DOCUMENT - China Domestica Bio-technology Holdings, Inc.Financial_Report.xls
EX-32.1 - EXHIBIT 32.1 - China Domestica Bio-technology Holdings, Inc.v303129_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - China Domestica Bio-technology Holdings, Inc.v303129_ex31-1.htm

 

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2011

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File No. 000-53364

 

CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC.

(Exact name of Registrant as Specified in its Charter)

 

Nevada   20-5432794

(State or other Jurisdiction of

Incorporation or Organization)

  (I.R.S. Employer Identification No.)

 

Room 2303, 2304 ShenFang Square, 3005 RenMing

Road South, LuFung District, Shenzhen, China 518001

(Address of Principal Executive Offices) (Zip Code)

 

(86) 13168096855

(Registrant’s Telephone Number, Including Area Code)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ¨ Accelerated Filer ¨
Non-Accelerated Filer ¨ Smaller reporting company x

 

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

 

As of February 13, 2012, the registrant had 49,899 shares of common stock outstanding.

 

 
 

 

 

 

CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC.

 

INDEX

 

    Page
     
PART I – FINANCIAL INFORMATION  
     
Item 1. Financial Statements.  
  Balance Sheets. 3
     
  Statements of Operations. 4
     
  Statement of Stockholders’ Equity (Deficit). 6
     
  Statement of Cash Flows. 5
     
  Notes to Financial Statements. 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 9
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 11
     
Item 4. Controls and Procedures. 11
     
PART II – OTHER INFORMATION  
     
Item 1. Legal Proceedings. 13
     
Item 1A. Risk Factors. 13
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 13
     
Item 3. Defaults Upon Senior Securities. 13
     
Item 5. Other Information. 13
     
Item 6. Exhibits. 13
     
  SIGNATURES 14

 

2
 

 

PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements

 

CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC

BALANCE SHEETS

 

   As of 
   Dec 31 2011   Mar 31 2011 
   (Unaudited)   (Audited) 
Current assets   215    215 
Cash and cash equivalents          
Total current assets   215    215 
           
Fixed assets          
Computer equipment          
Less: accumulated depreciation          
Net fixed assets          
Total fixed assets          
           
Total assets   215    215 
           
Liabilities          
Accounts payable and accrued liabilities   200    200 
Due to related parties   0    0 
Other payables   93,612    65,988 
Total liabilities   93,812    66,188 
           
Stockholders' equity(deficit)          
Common stock   51    51 
Additional paid-in capital   428,874    428,874 
Accumulated deficit during the development stage   (522,522)   (494,898)
Total stockholders' equity(deficit)   (93,597)   (65,973)
           
Total liabilities and stockholders' equity(deficit)   215    215 

 

See Notes to Financial Statements

 

3
 

 

CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC

STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three months ended Dec 31   Nine months ended Dec 31   From inception
(August 17, 2006)
to December 31, 
 
   2011   2010   2011   2010   2011 
Revenues                         
                          
Operating expenses                         
Officer salaries                       50,000 
Professional fees   11,528    1,675    27,124    9,831    129,713 
Professional fees related party                       306,700 
Depreciation expense                       2,936 
General&administrative expenses   500         500         36,470 
Total operating expenses   12,028    1,675    27,624    9,831    525,819 
                          
Loss from operation   (12,028)   (1,675)   (27,624)   (9,831)   (525,819)
                          
Other income(expense)                         
Interest income                       1,540 
Cancellation of Debt                  4,600    4,600 
Loss on disposal of fixed assets                       (1,516)
Impairment expense                       (1,327)
Total other income(expense)             -    4,600    3,297 
                          
Loss before income taxes   (12,028)   (1,675)   (27,624)   (5,231)   (522,522)
                          
Provision(benefit)for income Taxes                  -      
                          
Net loss   (12,028)   (1,675)   (27,624)   (5,231)   (522,522)
                          
Earnings(loss) per common share                         
Common shares outstanding   (0.24)   (0.03)   (0.55)   (0.10)     
Basic and fully diluted weighted average                         
                          
Common shares outstanding (after effect of 1 for 46 share reverse stock split occurring June 29, 2010)   49,896    49,896    49,896    49,896      

 

 

See Notes to Financial Statements

 

4
 

 

China Domestica Bio-technology Holdings, Inc.

(A Development Stage Company)

Statement of Cash Flows

From Inception (August 17, 2006) to December 31, 2011

 

           From Inception 
   For three months ended   For nine months ended   (August 17, 2006) 
   Dec 31   Dec 31   to December 31, 
   2011   2010   2011   2010   2011 
Cash Flows Provided By (Used In) Operating Activities                         
Net income (loss)   (12,028)   (1,675)   (27,624)   (5,231)   -522,522 
                        0 
Adjustments to reconcile net income (loss) to net cash provided from (used by) operating activities:                       0 
Common stock issued for services                       257,000 
Cancellation of Debt                  (4,600)   -4,600 
Depreciation and amortization                       2,936 
Impairment of fixed assets                       1,327 
Loss on disposal of fixed assets                       1,516 
Changes in operating assets and liabilities:                       0 
Prepaid officer's salaries                       0 
Increase (decrease) in accounts payable   12,028    1,675    27,624    9,831    66,188 
Net cash provided by (used in) operating activities   0    0    0    0    -198,155 
                          
Cash Flows Provided By (Used In) Investing Activities                         
Purchase of fixed assets                       -7,179 
Sale of fixed assets                       1400 
Net cash provided by (used in) investing activities   0    0    0    0    -5,779 
                          
Cash Flows Provided By (Used In) Financing Activities                         
Proceeds from loan by related party                       9,100 
Common stock purchased and retired                       -7,000 
Issuance of common stock for cash                       174,425 
Net cash provided by (used in) financing activities   0    0    0    0    176,525 
                          
Net increase (decrease) in cash and cash equivalents                       0 
Cash and cash equivalents, beginning of period   215    215    215    215    215 
Cash and cash equivalents, end of period   215    215    215    215    215 
                          
Supplemental disclosure of Cash Flow Information                         
Interest paid                         
Income taxes paid                         
                          
Schedule of Non Cash investing and financing activities                         
Common stock issued for services                       257,000 
Cancellation of Debt                  4,600    4,600 
Impairment of fixed assets                       1,327 
Loss on disposal of fixed assets                       1,516 
Forgiveness of debt from related party                       4,500 

 

See Notes to Financial Statements

 

5
 

 

China Domestica Bio-technology Holdings, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity (Deficit)

From Inception (August 17, 2006) to December 31, 2011

 

   Common
Share
   Stock
Amount
   Additional
Paid-in
Capital
   Deficit
Accumulated
during
Development
Stage
   Total 
Balance, August 17, 2006                         
Common shares issued for cash, $0.46 per share between August 2006 and March 2007   156,522    157    71,843         72,000 
Net loss for the period from inception on August 17, 2006 through March 31, 2007                  -2,640    -2,640 
Balance, March 31, 2007   156,522    157    71,843    -2,640    69,360 
Net loss for the year ended March 31, 2008                  -20,744    -20,744 
Balance, March 31, 2008   156,522    157    71,843    -23,384    48,616 
Common shares issued for services, $4.6 per share on June 12, 2008   1,522    2    6,998         7,000 
Common shares issued for cash, $4.6 per share on June 30, 2008   22,266    22    102,403         102,425 
Common shares issued for services at $11.5 per share on January 1, 2009   21,739    22    249,978         250,000 
Common shares repurchased and retired at $0.046 per share on March 11, 2009   -152,174    -152    -6,848         -7,000 
Additional shares issued in the 1 for 46 share reverse stock split due to rounding up of fractional shares   21                   0 
Net loss for the year ended March 31, 2009                  -349,607    -349,607 
Balance, March 31, 2009 (Restated)   49,896    51    424,374    -372,991    51,434 
Forgiveness of debt from related party             4,500         4,500 
Net loss for the period ended March 31, 2010                  -60,519    -60,519 
Ending Balance,  March 31, 2010   49,896    51    428,874    -433,510    -4,585 
Net loss for the period ended March 31, 2011                  -61,388    -61,388 
Ending Balance,  March 31, 2011   49,896    51    428,874    -494,898    -65,973 
Net loss for the period ended June 30, 2011                  -297    -297 
Ending Balance,  June 30, 2011   49,896    51    428,874    -495,195    -66,270 
Net loss for the period ended September 30,2011                  -15,299    -15,299 
Ending Balance, September 30, 2011   49,896    51    428,874    -510,494    -81,569 
Net loss for the period ended December 31,2011                  -12,028    -12,028 
Ending Balance, December 31, 2011   49,896    51    428,874    -522,522    -93,597 

 

See Notes to Financial Statements

 

6
 

  

Note 1.  Interim Unaudited Financial Statements

 

The consolidated balance sheet of CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC. (the “Company”) as of December 31, 2011, and the statements of operations and cash flows for the nine -months period ended December 31, 2011, have not been audited.  However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of December 31, 2011, and the results of operations for the three-months ended December 31, 2011.

 

Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading.  Interim period results are not necessarily indicative of the results to be achieved for an entire year.  These financial statements should be read in conjunction with the financial  statements and notes to financial statements included in the Company’s financial statements as filed on Form 10-K for the fiscal year ended March 31, 2011.

 

Note 2.Going-concern

 

We incurred a net loss of approximately $ 27,624 and $61,388 for the 9-months ended December 31, 2011 and for the fiscal year ended March 31, 2011, respectively and a cumulative net loss of approximately $522,522 since inception (August 17, 2006) through December 31, 2011, and there is substantial doubt about our ability to continue as a going concern. As of December 31, 2011, we had approximately $215 in cash and cash equivalents. In order to continue to operate, we need to develop additional sources of capital and to ultimately achieve profitable operations. We do not have sufficient resources to fund our operations for the next twelve months.

 

We estimate that we will require minimum funding in fiscal year 2011 of approximately $30,000 in order to fund our operations.  Although we are actively seeking new sources of equity and reduce our expenses while seeking a suitable merger candidate,  there can be no assurances that we will be able to raise additional capital on terms that are acceptable to us or at all.  Additionally, there can be no assurance that we will be able to find a suitable merger candidate.

 

Note 3. Summary of Significant Accounting Policies

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgments. Actual results may vary from these estimates. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

 

Development Stage Company

 

The Company is a development stage company as defined by ASC 915-10-05,"Development Stage Entity". The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated, since inception, have been considered as part of the Company's development stage activities.

 

Revenue Recognition

 

Presently, the Company is in the development stage and as such, has no revenues.  Upon emerging from the development stage the Company will adopt a policy of recognizing revenue when a definitive agreement with a determinable price exists, product delivery and/or invoicing (in each case where there is reasonable assurance of meeting customer-specified criteria) has occurred, and the collectability of the invoice is reasonably assured.

 

7
 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Recent Accounting Pronouncements

 

The Company’s management has evaluated recently issued accounting standards through the filing date of these financial statements and believes that the recently issued accounting standards will not have a material impact on the Company’s financial position, operations, or cash flows.

 

Note 4. Commitments and Contingencies

 

There is no commitment or contingencies to disclose during the nine-months ended December 31, 2011.

 

Note 5. Subsequent Events

 

Management has evaluated subsequent events and the impact on the reported results and disclosures and determined that there have not been any events that would be required to be reflected in the financial statements or the notes.

 

8
 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

The following should be read in conjunction with the financial statements of the Company included elsewhere herein.

 

FORWARD-LOOKING STATEMENTS

 

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “intend,” “plans”, and similar expressions are intended to identify forward-looking statements regarding events, conditions and financial trends which may affect our future plans of operations, business strategy, operating results and financial position. Forward looking statements in this report include without limitation statements relating to trends affecting our financial condition or results of operations, our business and growth strategies and our financing plans.

 

Such statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors include statements other than historical information or statements of current conditions and may relate to our future plans, operations and objectives and results, among other things, our plans to consider possible acquisitions, statements with respect to our expectations or beliefs with respect to future competition and statements concerning our need for and ability to attract additional capital, and other risks and factors set forth from time to time in our filings with the Securities and Exchange Commission.

 

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

 

Overview and Recent History

 

China Domestica Bio-technology Holdings, Inc. was incorporated in the State of Nevada on August 17, 2006 under the name “Cienega Creek Holdings, Inc.” The Company was previously engaged in the computer software business. On March 16, 2010, the Company entered into a material definitive agreement (the “Belmont Stock Purchase Agreement”) with Michael Klinicki and Belmont Partners, LLC (“Belmont”) whereby Belmont purchased a controlling interest of the Company’s common stock (the “Belmont Purchase Transaction”) from Michael Klinicki on March 18, 2010. Pursuant to the Belmont Stock Purchase Agreement, Joseph Meuse, a managing member of Belmont, was appointed as a member of the Company’s Board of Directors and to the office of President and all other Directors and officers of the Company resigned. Concurrent with this change of management, the Company moved its principal executive offices to 360 Main Street, Washington, VA 22747. Contemporaneously with the Belmont Purchase Transaction, the Company changed its plan of business from the development and marketing of computer software to seeking to acquire or merge with a revenue-producing company.

 

On April 26, 2010, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) by and among China Sheng Yong Bio-Pharmaceutical Holding Company Limited, or the “Buyer,” Belmont, or the Seller, and the Company. Pursuant to the terms of the Purchase Agreement, on April 26, 2010, the Buyer acquired from the Seller a controlling interest in the Company’s common stock. Pursuant to the terms of the Purchase Agreement, the Company agreed to issue to the Seller shares of its common stock such that the Seller will own 5% of the issued and outstanding capital stock of the Company after the closing of a merger transaction with an as of yet unidentified target corporation contemplated by the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, Joseph J. Meuse resigned on the Closing Date and Qingyu Meng was named President and Director of the Company and Yung Kong Chin was named Secretary and Director of the Company. Such resignation and appointments were effective as of the Closing Date with respect to the officers of the Company. The resignation of Joseph J. Meuse as a director and the naming of Messrs. Meng and Chin as directors took effect on May 22, 2010. Concurrent with this change of management, the Company moved its principal executive offices to Room 2303, 2304 ShenFang Square, 3005 RenMing Road South, LuFung District, Shenzhen, China. The Company’s telephone number is (86) 13168096855. The Company’s fiscal year end is March 31.

 

9
 

 

On June 29, 2010, the Company amended its articles of incorporation to change its name to “China Domestica Bio-technology Holdings, Inc.,” to authorize the issuance of up to 10,000,000 shares of “blank check” preferred stock and to effect a 46-for-1 reverse stock split of its outstanding shares of common stock. The reverse stock split reduced the number of issued and outstanding shares of our Common Stock from 2,294,250 shares outstanding prior to the split to 49,896 shares outstanding after the split. The reverse stock split became effective on June 29, 2010.

 

Plan of Operations

 

We are a start-up, exploration-stage corporation and have not yet generated or realized any revenues from our business operations.

 

Whereas sales and marketing activities were our focus during fiscal 2009, we were unable to realize any revenues as a result of these activities. As a result of our lack of revenues and inability to secure additional funding to allow business operations to continue, our Board of Directors determined that it was necessary to terminate the execution of our prior business plan, and that a change in business focus was needed and in the best interests of the Company and its shareholders. The goal of the new business plan is to merge with or acquire a revenue-producing business or a development stage business with a high potential for growth.

 

We will need additional capital in fiscal 2012. As of December 31, 2011, we had $215in cash and cash equivalents. During recent fiscal years, we made certain cost reductions. We have no remaining employees. Our former CEO Michael Klinicki agreed to terminate his employment agreement effective as of January 1, 2010. In addition, during the quarter ended September 30, 2010, Mr. Klinicki agreed to the cancellation of $4,600 in debts payable to him by the Company.

 

Although we continue to look for ways to raise additional capital, we recognize that it is not likely this will be successful. As an alternative strategy, we have decided to focus on identifying suitable candidates to merge with or acquire. We believe that our ability to continue to operate depends on finding a suitable merger target with the ability to raise additional needed capital. Notwithstanding the elimination of most of our remaining expenses, we may need additional cash during the next twelve months. As a result of our current limited cash availability we do not anticipate hiring any employees for the foreseeable future.

 

Results of Operations

 

Comparison of Three Months Ended December 31, 2011 and December 31, 2010 (Unaudited)

 

We did not earn any revenues during the three-month periods ending December 31, 2011 and 2010. During the three-month period ended December 31, 2011, we incurred operating expenses in the amount of $12,028, compared to operating expenses of $1,675 incurred during the same period in 2010. These operating expenses were comprised primarily of professional fees.

 

Comparison of Nine Months Ended December 31, 2011 and December 31, 2010 (Unaudited)

 

We did not earn any revenues during the nine-month periods ending December 31, 2011 and 2010. During the nine-month period ended December 31, 2011, we incurred operating expenses in the amount of $27,624, which was approximately $17,793, or 181%, more than the Company’s operating expenses of $9,831 incurred during the same period in 2010. These operating expenses were comprised primarily of professional fees.

 

Liquidity and Capital Resources

 

At its current level of operations, the Company will need to begin profitable operations and/or raise additional capital during the next fiscal year. As of December 31, 2011, the Company had not generated any revenue and had $215 in cash and cash equivalents and owed accounts payable and accrued liabilities of $200 and other payables of $93,812. Despite the reductions in expenses mentioned above, we will not have enough capital resources available to continue operating through the end of our next fiscal year. We estimate that we will require minimum additional funding in fiscal year 2012 of approximately $30,000 to fund our operations. Our ability to continue operating depends on our ability to locate and merge with a business generating revenues. If the Company is successful in finding a suitable merger target, it may result in significant dilution to existing shareholders.

 

10
 

 

Going Concern

 

We incurred a net loss of approximately $12,028 for the three months ended December 31, 2011, and a cumulative net loss of approximately $522,522 since inception (August 17, 2006) through December 31, 2011, and there is substantial doubt about our ability to continue as a going concern. As of December 31, 2011, we had approximately $215 in cash and cash equivalents. In order to continue to operate we need to develop additional sources of capital and to ultimately achieve profitable operations. We do not have sufficient resources to fund our operations for the next twelve months.

 

We estimate that we will require minimum funding in fiscal year 2012 of approximately $30,000 in order to fund our operations. Although we are actively seeking new sources of equity and reduce our expenses while seeking a suitable merger candidate, there can be no assurances that we will be able to raise additional capital on terms that are acceptable to us or at all. Additionally, there can be no assurance that we will be able to find a suitable merger candidate.

 

Off-Balance Sheet Arrangements

 

At December 31, 2011, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

 

Critical Accounting Policies

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies.

 

Revenue Recognition

 

Presently, the Company is in the development stage and as such, has no revenues. Upon emerging from the development stage the Company will adopt a policy of recognizing revenue when a definitive agreement with a determinable price exists, product delivery and/or invoicing (in each case where there is reasonable assurance of meeting customer-specified criteria) has occurred, and the collectability of the invoice is reasonably assured.

 

Recent Accounting Pronouncements

 

The Company’s management has evaluated recently issued accounting standards through the filing date of these financial statements and believes that the recently issued accounting standards will not have a material impact on the Company’s financial position, operations, or cash flows.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

(a) Evaluation of Disclosure Controls and Procedures.

 

11
 

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As of December 31, 2011, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. During this evaluation, several material weaknesses were identified. As a result of the material weaknesses, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

 

A material weakness is a deficiency, or combination of deficiencies, in disclosure controls and procedures, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on management’s assessment over financial reporting, management believes as of December 31, 2011, the Company’s disclosure controls and procedures were not effective due to the following material weaknesses:

 

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

 

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

 

Lack of Audit Committee and Outside Directors on the Company’s Board of Directors: We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

 

Insufficient Written Policies: We have insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

 

(b) Changes in Internal Control Over Financial Reporting.

 

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 or Rule 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not currently involved in any material pending legal proceeding.

 

Item 1A. Risk Factors.

 

As a smaller reporting company, we are not required to provide risk factors.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibits:

 

31.1* Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.

 

32.1* Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002.

 

101.INS* XBRL Instance Document
   
101.SCH* XBRL Taxonomy Extension Schema
   
101.CAL* XBRL Taxonomy Extension Calculation Linkbase
   
101.DEF* XBRL Taxonomy Extension Definition Linkbase
   
101.LAB* XBRL Taxonomy Extension Label Linkbase
   
101.PRE* XBRL Taxonomy Extension Presentation Linkbase

 

*Filed herewith.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: February 21, 2012

  CHINA DOMESTICA BIO-TECHNOLOGY HOLDINGS, INC.
     
  By: /s/ Yung Kong Chin
    Qingyu Meng
    President and Secretary
    (Principal Executive Officer and Principal Financial and Accounting Officer)

 

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