PINX:DOMK Annual Report 10-K Filing - 5/31/2012

Effective Date 5/31/2012

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended May 31, 2012 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 333-136247 DOMARK INTERNATIONAL, INC. (Name of small business issuer as specified in its charter) Nevada 20-4647578 (State of Incorporation) (IRS Employer Identification No.) 254 S Ronald Reagan Blvd, Ste 134 Longwood, FL 32750 (Address of principal executive offices) 321-250-4996 (Registrant's telephone number, including Area Code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 Act. Yes [ ] No [X] The aggregate market value of voting stock held by non-affiliates of the registrant on September 12, 2012 was $17,403,179. As of September 12, 2011, there were 29,005,298 shares of Common Stock, $0.001 par value per share, issued and outstanding and there were 50,000 shares of Preferred Stock, $0.001 par value per share, issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE None <PAGE> TABLE OF CONTENTS PART I ITEM 1. BUSINESS 3 ITEM 1A. RISK FACTORS 4 ITEM 1B. UNRESOLVED STAFF COMMENTS 4 ITEM 2. PROPERTIES 4 ITEM 3. LEGAL PROCEEDINGS 4 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 5 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 5 ITEM 6. SELECTED FINANCIAL DATA 6 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 9 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 9 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 32 ITEM 9A. CONTROLS AND PROCEDURES 32 ITEM 9B. OTHER INFORMATION 33 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. 33 ITEM 11. EXECUTIVE COMPENSATION 35 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 36 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 37 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 38 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 38 SIGNATURES 41 2 <PAGE> PART I ITEM 1. BUSINESS Except for historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, but are not limited to, statements regarding future events and the Company's plans and expectations. Actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Form 10-K or incorporated herein by reference, including those set forth in MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. HISTORY AND GENERAL OVERVIEW DOMARK INTERNATIONAL, INC. ("DoMark" or the "Company") was incorporated under the laws of the State of Nevada on March 30, 2006. In 2008, the Company embarked on a business plan that was intended to acquire profitable businesses that would create shareholder value in diverse industries. During 2008 and 2009, the company acquired several operating businesses, as set forth in various Current Reports on Form 8-K filed with the Securities and Exchange Commission. On May 21, 2009, the Company closed an acquisition pursuant to that certain Agreement for the Exchange of Common Stock (the "Victory Lane Agreement") with Victory Lane Financial Elite, LLC ("Victory Lane") with respect to a real estate lifestyle business known as Victory Lane (the "Victory Lane Business"). Shortly thereafter, a dispute arose between the Company and the principals of Victory Lane regarding the representations of the principals of Victory Lane and the Victory Lane Business and the Victory Lane Agreement. Litigation between the Company and various parties pertaining to the Victory Lane Business remains outstanding. (Refer to "Item 3, Legal Proceedings" below). During the last half of 2009, the Company sold two of its operating subsidiaries, Javaco, Inc. and ECFO Corporation and effected rescissions of acquisition transactions on the remainder of its operating businesses. Between October 2009 and May 2011, the Company had no material ongoing operations. The business of the Company during the period from October 2009 through May 2011 was to seek out new acquisitions and to conduct the litigation with Victory Lane. On May 31, 2011, the Company formed a wholly owned subsidiary, Armada Sports & Entertainment, Inc. Armada is a sports marketing and management company engaged in owning, developing, and conducting made-for-television sports and entertainment events. On March 5, 2012, the Company entered into an Asset Purchase Agreement with its then controlling shareholder, R. Thomas Kidd, for the sale of Armada, and certain assets related thereto. On February 29, 2012, the Company formed a new wholly owned subsidiary, SolarWerks, Inc. in the state of Nevada, for the purposes of entering the business of marketing specialized solar consumer electronics. On June 20, 2012, the Company formed a new wholly owned subsidiary, MuscleFoot Inc. in the state of Nevada for the purpose of distributing, marketing, and acting as sales agent for the patented foot care system, Barefoot Science. 3 <PAGE> As a result of the change in the Company's business model, the disclosures and financial results contained herein should be reviewed as they relate to the Company's historical operations but should be discounted as they relate to the Company's potential future results. EMPLOYEES As of fiscal year end May 31, 2012, the Company had one employee. The Company conducts its business through independent contractors at May 31, 2012. ITEM 1A. RISK FACTORS Not applicable to smaller reporting companies. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable to smaller reporting companies. ITEM 2. PROPERTIES The Company maintains its corporate executive office in Longwood, Florida. ECFO, a former subsidiary of the Company, has been providing the office space at no charge to the Company as a courtesy to the Company. The Company does not maintain, own or lease any other property. ITEM 3. LEGAL PROCEEDINGS On May 21, 2009, the Company entered into an Agreement for the Exchange of Common Stock (the "Victory Lane Agreement") with Victory Lane Financial Elite, LLC ("Victory Lane") with respect to a real estate lifestyle business known as Victory Lane (the "Victory Lane Business") pursuant to which the Company intended to purchase the Victory Lane Business. Shortly thereafter, a dispute arose between the Company and Victory Lane regarding alleged misrepresentations made by Victory Lane in connection with the Victory Lane Agreement. In August, 2009, Victory Lane Financial Elite, LLC, Legacy Development, LLC and Patrick Costello filed suit in the Superior Court of Tattnall County, Georgia (Civ. No. 2009-V-381-JW) against the Company, R. Thomas Kidd and various officers and directors of the Company, alleging that the Company was in breach of the Victory Lane Agreement and that the Company and certain of the individual defendants had committed various torts against the plaintiffs and that certain of the individual defendants had violated various fiduciary and other duties owed to the plaintiffs in connection with the Victory Lane Agreement and the handling of the Victory Lane Business (the "VLFE Case"). The plaintiffs sought a declaratory judgment to the effect that the Victory Lane Agreement had not been executed, as well as money damages from the Company and the individual defendants. The Company and Mr. Kidd have answered the Complaint, denying any liability for the plaintiff's claims and have asserted various counterclaims including fraud and other torts. In July 2010 the court dismissed all of the individual defendants, other than R. Thomas Kidd, in response to a motion to dismiss for lack of jurisdiction. The case has since been stayed. In December, 2009, AHIFO-21, LLC filed a lawsuit in the Superior Court of Tattnall County, Georgia (Civ. No. 2009-V-672-JS) against Victory Lane, LLC, 4 <PAGE> Patrick J. Costello and Stephen Brown (the "Victory Lane Defendants") alleging that the Victory Lane Defendants owe the plaintiff more than $7,740,000 in respect of one or more loans made by the plaintiff to certain Victory Lane Defendants in connection with the Victory Lane Business (the "AHIFO Case"). In February, 2010, the Victory Lane Defendants filed a Third Party Complaint against the Company and R. Thomas Kidd, claiming that the Company and Mr. Kidd should be liable for any amounts the Victor Lane Defendants are required to pay to the plaintiff in this case. The Company and Mr. Kidd have answered the Complaint, denying any liability for the plaintiff's claims and Mr. Kidd has asserted various counterclaims including fraud and other torts. The Company and Mr. Kidd filed a motion to dismiss the Third Party Complaint, but the entire case was subsequently stayed. Because each of the VLFE Case and the AHIFO Case have been stayed and because discovery in those cases is not complete, the Company has not reached a determination that any loss is other than remote and that the amount of any damages, if any were determined adverse to the Company, would be reasonably estimable. The Company believes that it has meritorious claims against the opposing parties with respect to the Victory Lane Agreement and that the claims asserted against it are not meritorious. The Company intends to defend itself vigorously. On January 24, 2012, the Company was made aware by the Chief Executive Officer of the Company, that a complaint had been filed against the Company for approximately $534,000 by the United States Trustee for the Middle District of Florida to claim against funds we owed to our Chief Executive Officer and his wife. On January 23, 2012, the Trustee's Motion for Approval and Notice of Compromise was filed to obtain the approval of the court of a settlement of the matters that were the subject of the complaint. On April 24, 2012, the Company was advised that the complaint, which was never served, was dismissed with prejudice by the US Trustee. ITEM 4. MINE SAFTY DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded in the over-the-counter market, and quoted in the National Association of Securities Dealers Inter-dealer Quotation System ("Electronic Bulletin Board) and can be accessed on the Internet at www.otcbb.com under the symbol "DOMK.OB". As of September 12, 2011, there were 29,005,298 shares of our common stock outstanding and there were approximately 87 shareholders of record of the Company's common stock. The following table sets forth for the periods indicated the high and low bid quotations for our common stock. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions. 5 <PAGE> FISCAL YEAR ENDED MAY 31, 2012 High Low ---- --- First Quarter (June - August, 2010) $ 0.23 $ 0.07 Second Quarter (September - November 2010) $ 0.30 $ 0.13 Third Quarter (December - February 2011) $ 0.20 $ 0.15 Fourth Quarter (March - May 2011) $ 4.88 $ 0.63 On September 12, 2011, the closing bid price of our common stock was $0.60. DIVIDENDS The Company has never paid dividends on any shares of its common stock, nor does the Company anticipate paying dividends at any time in the foreseeable future. Any profits received by the Company will be reinvested in its business. RECENT SALES OF UNREGISTERED SECURITIES Stock Issued Stock Issued for Cash Cash Received for Assets -------- ------------- ---------- Year Ended May 31, 2011 -- $ -- -- Year Ended May 31, 2012 -- $ -- -- ITEM 6. SELECTED FINANCIAL DATA Not applicable to smaller reporting companies. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following is management's discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the current plans of our management. This report includes forward-looking statements. Generally, the words "believes", "anticipates", "may", "will", "should", "expect", "intend", "estimate", "continue", and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements. The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K. 6 <PAGE> RECENT DEVELOPMENTS On February 29, 2012, the Company formed a new wholly owned subsidiary, SolarWerks, Inc. in the state of Nevada, for the purposes of entering the business of marketing specialized solar consumer electronics. On February 29, 2012, the Company entered into a Memorandum of Agreement with Xiamen Taiyang Neng Gongsi and Michael Franklin. For and in consideration of the payment of an initial license fee of $10,000, and for the future payment of royalties, Xiamen granted an exclusive worldwide license and joint patent rights to Domark International, Inc. for a solar charging case for IPAD, including IPAD 3. There is no prior business relationship with Xiamen, or any of its officers or directors. On March 5, 2012, the Company entered into an Asset Purchase Agreement with its controlling shareholder, R. Thomas Kidd, for the sale of its wholly owned subsidiary, Armada/The Golf Championships, and certain assets related thereto. On March 5, 2012, Michael Franklin purchased 50,000 shares of the Company's Series A Preferred Stock from R Thomas Kidd. Our Series A Preferred Stock is convertible into Common Stock at the rate of 1,000 shares of Common for each share of Preferred. In addition, our Preferred stock has voting rights equivalent to 1,000 votes per share. Upon the conclusion of the Armada transaction, Franklin became the controlling shareholder of Domark by virtue of his ownership of 50,000 shares of Preferred Stock with voting rights equivalent to 50,000,000 shares of our Common Stock. On March 5, 2012, the Company's Shareholders appointed Michael Franklin as sole Director, CEO and Corporate Secretary. Mr. Franklin will serve as a director until his successor has been elected at the next annual meeting of the Company's shareholders or until his earlier resignation, removal, or death. Mr. Franklin has not been appointed to any committees of the Board, as the Board does not presently have any committees. As of March 29, 2012, our prior CEO, Tom Kidd, returned to the Company and the Company has cancelled, 50,000 shares of its Series A Preferred Stock and 9,771,500 shares of its Common Stock. There are 50,000 issued and outstanding shares of the Company's Series A Preferred Stock, owned by the Company's CEO, Michael Franklin. Effective May 25, 2012, Michael Franklin, Chairman and CEO the Company, resigned from all positions held with the Company, including resigning from Board service. There was no disagreement between the Registrant and Mr. Franklin at the time of his resignation from the Board of Directors. Mr. Franklin will continue to serve as the President of SolaWerks Inc., a wholly owned subsidiary of the Company. On May 25, 2012, the Company's Shareholders appointed R. Brentwood Strasler as sole Director, President and Corporate Secretary. 7 <PAGE> MANAGEMENT'S DISCUSSION & ANALYSIS OF RESULTS OF OPERATIONS FISCAL YEAR ENDED MAY 31, 2012 COMPARED TO FISCAL YEAR ENDED MAY 31, 2011 The Company had $32,253 in revenues for the fiscal year ended May 31, 2012 and earned no revenues for the fiscal year ended May 31, 2011. Revenues earned for the period were related to the sale of Solacases through the Company's wholly owned subsidiary, Solawerks, Inc. General and administrative expenses for fiscal 2012 increased to $4,603,192 as compared to $35,161 in fiscal 2011. The increase is primarily related to salaries and expenses during the period the Company was developing its made for TV sports events through Armada/The Golf Championships. In addition, the Company incurred significant expense in stock compensation and advertising relating to the development of Solawerks, Inc. and MuscleFoot, Inc., the Company's wholly owned subsidiaries formed during the period. Interest expense for the twelve months ending May 31, 2012 was $46,060 as compared to $0 for the period ending May 31, 2011. The Company's operations during fiscal 2012 were funded through interest free, demand notes from shareholders and short term loans financed through Infinite Funding. As of May 31, 2012, the Company is indebted to a shareholder in the amount of $1,000 and to Infinite Funding in the aggregate of $545,645 plus interest. The operating loss for fiscal 2012 increased to $4,718,987 as compared to $125,480 for fiscal 2011. Our loss from discontinued operations for the period ending May 31, 2012 was $0.00 as compared to $0 for the period ending May 31, 2011. The following table sets forth the assets and liabilities sold pursuant to an Asset Purchase Agreement entered into on March 5, 2012: Prepaid Services $397,675 Inventory - Production 16,926 Equipment 3,867 (net of depreciation) Website 1,167 (net of amortization) VPAR License 24,432 (net of amortization) Accounts Payable 19,257 Payroll & related liabilities 249,631 Shareholder Loans $929,736 The Company relied upon ASC 860-20-25, and ASC 860-20-40 to record the sale. Fair value of the transaction is measured at fair value of the assets less any liabilities sold. The net value recorded for this transaction was $(754,558). No tax benefit was recorded for fiscal 2012 or fiscal 2011 as required by ASC Standard 740-25, Accounting for Income Taxes. The Company has provided for a 100% allowance of its deferred tax assets, as it is uncertain that there will be sufficient net profits in the future to fully realize the tax benefit of its net operating loss carry-forwards. LIQUIDITY AND CAPITAL RESOURCES Our operating requirements have been funded primarily through financing facilities, sales of our common stock, and loans from shareholders. Currently 8 <PAGE> the Company's cash flows do not adequately support the operating expenses of the Company. We received $0 in fiscal years 2012 and 2011 from the sale of our common stock. The Company will continue to require financing from loans and notes payable until such time our business has generated income sufficient to carry our operating costs. Cash used by operating activities for the fiscal year 2012 was ($627,814) compared to $(33,446) for the fiscal year 2011. Depreciation and amortization expense for fiscal year 2012 was $8,465 as compared to $1,715 for fiscal 2011. Cash (used in) provided in investing activities was ($14,000) for the fiscal year 2012, compared to $(3,500) for the fiscal year 2011. Cash provided by financing activities was $689,495 for fiscal year 2012 as compared to $41,336 for fiscal 2011. Financing activities consisted of cash received from shareholders and notes payable. OTHER CONSIDERATIONS There are numerous factors that affect the Company's business and the results of its operations. Sources of these factors include general economic and business conditions, federal and state regulation of business activities, the level of demand for services, the level and intensity of competition in the, and our ability to continue to improve our infrastructure, including personnel and systems, to keep pace with our anticipated rapid growth in the development of our business. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable to smaller reporting companies. ITEM 8. FINANCIAL STATEMENTS DOMARK INTERNATIONAL, INC. TABLE OF CONTENTS Page ---- INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 10 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets at May 31, 2012 and 2011 11 Consolidated Statements of Operations for the years ended May 31, 2012 and 2011 and inception (October 29, 2009) - May 31, 2012 13 Consolidated Statements of Stockholders' Deficit for the years ended May 31, 2012 and 2011 and inception (October 29, 2009) - May 31, 2012 14 Consolidated Statements of Cash Flows for the years ended May 31, 2012 and 2011 and inception (October 29, 2009) - May 31, 2012 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16 9 <PAGE> [LETTERHEAD OF DE JOYA GRIFFITH & COMPANY, LLC] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders Domark International, Inc. [INSERT AUDITOR'S REPORT] 10 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS ASSETS As of As of May 31, 2012 May 31, 2011 ------------ ------------ (Audited) (Audited) CURRENT ASSETS Cash $ 52,269 $ 4,587 Prepaid expenses 4,897 -- -------- -------- TOTAL CURRENT ASSETS 57,166 4,587 -------- -------- FIXED ASSETS Property & equipment, net -- 399 -------- -------- TOTAL FIXED ASSETS -- 399 -------- -------- OTHER ASSETS Website development costs 2,250 6,417 Deferred financing 24,799 -- License 9,635 -- -------- -------- TOTAL OTHER ASSETS 36,684 6,417 -------- -------- TOTAL ASSETS $ 93,850 $ 11,403 ======== ======== The accompanying notes are an integral part of these financial statements. 11 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' DEFICIT As of As of May 31, 2012 May 31, 2011 ------------ ------------ (Audited) (Audited) <S> <C> <C> CURRENT LIABILITIES Accounts payable and accrued expenses $ 104,530 $ 44,987 Note payable 545,645 75,000 ------------ ------------ TOTAL CURRENT LIABILITIES 650,175 119,987 ------------ ------------ LONG-TERM LIABILITIES Due to affiliate and shareholder 1,000 696,171 ------------ ------------ TOTAL LONG-TERM LIABILITIES 1,000 696,171 ------------ ------------ TOTAL LIABILITIES 651,175 816,158 ------------ ------------ STOCKHOLDERS' DEFICIT Convertible preferred stock series A, $0.001 par value, authorized: 2,000,000 issued: 50,000 and 100,000, respectively 50 100 Common stock, $0.001 par value, authorized: 200,000,000 issued: 29,005,298 and 36,460,835, respectively 29,005 36,461 Additional paid in capital 31,499,029 26,448,172 Accumulated deficit (26,850,830) (26,850,830) Accumulated deficit during development stage (5,234,579) (438,656) ------------ ------------ TOTAL STOCKHOLDERS' DEFICIENCY (557,325) (804,755) ------------ ------------ TOTAL LIABILITIES AND EQUITY $ 93,850 $ 11,403 ============ ============ The accompanying notes are an integral part of these financial statements. 12 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STATE COMPANY) STATEMENTS OF OPERATIONS For the For the October 21, 2009 year ended year ended (Development stage) to May 31, 2012 May 31, 2011 May 31, 2012 ------------ ------------ ------------ (Audited) (Audited) (Unaudited) <S> <C> <C> <C> INCOME $ 32,253 $ -- $ 32,253 COST OF SALES 54,763 -- 54,763 ------------ ------------ ------------ GROSS LOSS (22,510) -- (22,510) GENERAL AND ADMINISTRATIVE EXPENSES 4,725,732 35,161 5,073,955 RESEARCH AND DEVELOPMENT 51,681 -- 51,681 BAD DEBT EXPENSE 456 100,000 100,456 FORGIVENESS OF DEBT 4,000 -- 4,000 IMPAIRMENT OF GOODWILL -- -- 10,000 IMPAIRMENT OF ASSET 456 (10,000) (10,000) ------------ ------------ ------------ OPERATING LOSS (4,796,379) (125,161) (5,264,602) OTHER INCOME -- 19,681 30,023 ------------ ------------ ------------ NET LOSS $ (4,795,923) $ (125,480) $ (5,234,579) ============ ============ ============ Net loss per share, basic and diluted $ (0.17) $ (0.00) ============ ============ Weighted average common shares outstanding 27,483,383 36,460,835 ============ ============ The accompanying notes are an integral part of these financial statements. 13 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS' DEFICIT As of May 31, 2012 Accumulated Additional During the Total Preferred Stock Common Stock Paid-in Development Stockholders' Amount Shares Shares Amount Capital Stage Deficit ------ ------ ------ ------ ------- ----- ------- <S> <C> <C> <C> <C> <C> <C> <C> Balance, May 31, 2010 100,000 $ 100 36,460,835 $ 36,461 $ 26,448,172 $(27,164,009) $ (679,275) Net Income (loss) -- -- -- -- -- (125,480) (125,480) ------- ------- ------------ -------- ------------ ------------ ------------ Balance, May 31, 2011 100,000 100 36,460,835 36,461 26,448,172 (27,289,488) (804,755) ------- ------- ------------ -------- ------------ ------------ ------------ Net Income (loss) -- -- -- -- -- (3,428,193) (3,428,193) ------- ------- ------------ -------- ------------ ------------ ------------ Common stock issued for Prepaid expenses on June 20, 2011 -- -- 550,660 551 124,449 -- 125,000 Common stock issued for Prepaid expenses on September 1, 2011 -- -- 79,545 80 124,920 -- 125,000 Common stock issued for Prepaid expenses on December 15, 2011 -- -- 75,758 75 124,925 -- 125,000 Common stock issued for Compensation on January 9, 2012 -- -- 300,000 300 494,700 -- 495,000 Common stock issued for Compensation on March 1, 2012 -- -- 100,000 100 139,900 -- 140,000 Common stock returned to Treasury for sale of assets On March 5, 2012 -- -- 9,771,500 (9,772) 764,380 -- 754,609 Preferred stock returned to Treasury for sale of assets On March 5, 2012 (50,000) (50) -- -- -- -- (50) Common stock issued for Compensation on April 1, 2012 -- -- 160,000 160 244,640 -- 244,800 Common stock issued for Compensation on May 9, 2012 -- -- 100,000 100 274,900 -- 275,000 Common stock issued for Compensation on May 24, 2012 -- -- 150,000 150 229,350 -- 229,500 Common stock issued for Compensation on May 29, 2012 -- -- 800,000 800 2,319,200 -- 2,320,000 Vested employee stock comp -- -- -- -- 155,000 -- 155,000 Net Loss -- -- -- -- -- (4,718,987) (4,718,987) ------- ------- ------------ -------- ------------ ------------ ------------ Balance, May 31, 2012 50,000 $ 50 $ 29,005,298 $ 29,005 $ 31,444,534 $(32,008,473) $ (534,884) ======= ======= ============ ======== ============ ============ ============ The accompanying notes are an integral part of these financial statements. 14 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS For the twelve months ending May 31, 2012 and 2011 From For the For the October 21, 2009 year ended year ended (Development stage) to May 31, 2012 May 31, 2011 May 31, 2012 ------------ ------------ ------------ (Audited) (Audited) (Unaudited) <S> <C> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (4,718,987) $ (125,480) $ (438,658) ------------ ------------ ------------ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 8,465 1,715 10,839 Impairment of assets (456) 10,000 9,544 Forgiveness of debt (4,000) -- (4,000) Common stock issued as compensation and for expenses 3,859,302 -- 3,859,389 Currency exchange 72 -- -- Bad debt expense 456 100,000 456 Changes in Operating Assets and Liabilities: (Increase)/decrease prepaid exp and other current assets 370,103 -- 370,103 Increase/(decrease) in accounts payable 56,294 (19,681) 798 Increase/(decrease) in accrued expenses (199,063) -- (199,063) ------------ ------------ ------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (627,814) (33,446) (1,132,139) ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for web development (4,000) (3,500) (7,500) Cash paid for license (10,000) -- (10,000) ------------ ------------ ------------ NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES (14,000) (3,500) (17,500) ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Deferred financing costs 50,000 -- 50,000 Increase/(decrease) in shareholder loans 234,495 (33,664) 768,850 Cash received/(Paid) on notes payable 405,000 75,000 379,530 ------------ ------------ ------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 689,495 41,336 1,198,380 ------------ ------------ ------------ CASH RECONCILIATION Net increase (decrease) in cash and cash equivalents 47,681 4,390 48,741 Net cash flows from discontinued operations -- -- -- Cash and cash equivalents - beginning balance 4,587 197 3,527 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS BALANCE END OF PERIOD $ 52,268 $ 4,587 $ 52,268 ============ ============ ============ The accompanying notes are an integral part of these financial statements. 15 <PAGE> DOMARK INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MAY 31, 2012 AND 2011 NOTE 1 - DESCRIPTION OF BUSINESS DOMARK INTERNATIONAL, INC. ("DoMark" or the "Company") was incorporated under the laws of the State of Nevada on March 30, 2006. In 2008, the Company embarked on a business plan that was intended to acquire profitable businesses that would create shareholder value in diverse industries. During 2008 and 2009, the Company acquired several operating businesses, as set forth in various Current Reports on Form 8-K filed with the Securities and Exchange Commission. On May 21, 2009, the Company closed an acquisition pursuant to an Agreement for the Exchange of Common Stock (the "Victory Lane Agreement") with Victory Lane Financial Elite, LLC ("Victory Lane") with respect to a real estate lifestyle business known as "Victory Lane" (the "Victory Lane Business"). Shortly thereafter a dispute arose between the Company and the principals of Victory Lane regarding the representations of the principals of Victory Lane and the Victory Lane Business and the Victory Lane Agreement. Litigation between the Company and various parties pertaining to the Victory Lane Business remains outstanding. (Refer to Note 10 - Commitments and Contingencies below. During the last half of 2009, the Company sold two operating subsidiaries, Javaco, Inc. and ECFO Corporation and effected rescissions of acquisition transactions on the remainder of its operating businesses. Between October 2009 and May 2011 the Company had no material ongoing operations. The business of the Company during the period from October 2009 through May 2011 was to seek out new acquisitions and to conduct the litigation with Victory Lane. On May 31, 2011, the Company formed a wholly owned subsidiary, Armada Sports & Entertainment, Inc. ("Armada Sports"). Armada Sports is a sports marketing and management company engaged in owning, developing, and conducting made-for-television sports and entertainment events. Armada Sports currently owns "The Golf Championships", a series of unique competitions in the sport known as The Million Dollar Invitationals, The World Putting Tour Championships, and the Celebrity Challenges. Through Armada Sports, the Company intends to generate revenues through the sale of advertising, sponsorships, event tickets, promotional fees, broadcasting rights and other products. On March 5, 2012, the Company entered into an Asset Purchase Agreement with its then controlling shareholder, R. Thomas Kidd, for the sale of Armada, and certain assets related thereto. The Company relied upon ASC 860-20-25, and ASC 860-20-40 to record the sale. Fair value of the transaction is measured at fair value of the assets less any liabilities sold. On February 29, 2012, the Company formed a new wholly owned subsidiary, SolaWerks,Inc. in the state of Nevada, for the purposes of entering the business of marketing specialized solar consumer electronics. SolaWerks' current focus is to develop and distribute the SolaPad: a combined cover and charging system for Apple's iPad, and the SolaCase: a combined cover and charging system for all versions of Apple's iPhone. SolaWerks competes in a market that also includes 3D Systems (DDD), Dell (DELL) and Hewlett Packard (HPQ). 16 <PAGE> NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. The Company has year-end losses from operations of $4,718,987 and $125,480 for the years ended May 31, 2012 and 2011, respectively. Furthermore, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders. These factors raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. In this regard, management is planning to raise any necessary additional funds through loans and additional sales of its common stock. There is no assurance that the Company will be successful in raising additional capital. NOTE 3 - BASIS OF PRESENTATION The audited financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECENT ACCOUNTNG PRONOUNCEMENTS The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows. DEVELOPMENT STAGE COMPANY The Company is a development stage company as defined in ASC Standard 915-10-05 and has recognized no revenue and devotes substantially all of its efforts on establishing its sports business. Its planned principal operations in developing its sports business have commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities. PRINCIPLES OF CONSOLIDATION The accompanying financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and its subsidiaries. The accompanying financial statements include the active entity of DoMark International, Inc. and its wholly owned subsidiaries, Armada Sports & Entertainment, Inc. and Solawerks, Inc. The Company has relied upon the guidance provided by Statements of Financial Accounting Standards, ASC 810-10-15-3. 17 <PAGE> USE OF ESTIMATES The preparation of financial statements in conformity with GAAP 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. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. The primary management estimates included in these financial statements are the impairment reserves applied to various long-lived assets, allowance for doubtful accounts for gateway access fees and licensing fees, and the fair value of its stock tendered in various non-monetary transactions. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At May 31, 2012 and 2011, cash and cash equivalents included cash on hand and cash in the bank. NET LOSS PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of May 31, 2012. PROPERTY AND EQUIPMENT Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The ranges of estimated useful lives used to calculated depreciation for principal items of property and equipment are as follows: Depreciation/ Asset Category Amortization Period -------------- ------------------- Computer Equipment 3 Years Office equipment 5 Years Vehicle 5 Years Leasehold Improvements 15 Years GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS The Company accounts for Goodwill and other intangible assets as defined by ASC Standard 350, GOODWILL AND OTHER INTANGIBLE ASSETS. As a result, the Company 18 <PAGE> discontinued amortization of goodwill, and instead annually evaluates the carrying value of goodwill and other intangible assets for impairment, in accordance with the provisions of ASC Standard 350-20-35. A reduction of the value of goodwill is expensed as an impairment loss. OTHER INTANGIBLE ASSETS Other intangible assets are carried at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the assets, generally 12 to 24 months. IMPAIRMENT OF LONG-LIVED ASSETS In accordance with ASC Standard 360-10-40, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. STOCK-BASED COMPENSATION The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective - Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. RESEARCH AND DEVELOPMENT All research and development expenditures are expensed as incurred. REVENUE RECOGNITION The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the 19 <PAGE> resulting receivable is reasonably assured. Revenue from licensing our technology is recognized over the term of the license agreement. Costs and expenses are recognized during the period in which they are incurred. Revenues earned for the period included sales of our solar charging units. The Company recognizes these sales once delivery is confirmed to the customer. COST OF REVENUE Amounts recorded as cost of revenue relate to direct expenses incurred in order to fulfill orders of our products. Such costs are recorded as incurred. Our cost of revenue consists primarily of the cost of product; payment processing fees; and the cost of product samples. NOTE 5 - RELATED PARTY TRANSACTIONS The Company was indebted to R. Thomas Kidd, the Company's previous Chief Executive Officer and sole Director, and his wife, in the amount of $929,736, which was not interest bearing and was due on demand. Pursuant to an Asset Purchase Agreement executed on March 5, 2012, this debt was extinguished as part of the consideration paid for the sale of certain assets of the Company's wholly owned subsidiary, Armada/The Golf Championships. On February 29, 2012 the Company executed a Memorandum of Agreement with Xiamen Tiauyang Neng Gongsi and Michael Franklin related to the acquisition of certain exclusive worldwide licensing and joint patent rights. Xiamen has granted an exclusive worldwide license and joint patent rights to the Company for a solar charging case for IPAD, including IPAD 3. The Company will amortize the license fee of $10,000 over a period ending December 31, 2018. On May 25, 2012, the Company entered into an employment agreement with its newly appointed President, R. Brentwood Strasler, for a period of no less than three years. Mr. Strasler is entitled to an annual salary of $150,000 and 100,000 stock purchase warrants exercisable to purchase common shares of the Company at $1.00 per share. The warrants are exercisable for a three year period and can be vested quarterly on a pro rata basis over twelve months from the date of issue. Additionally, Mr. Strasler will be enrolled in a long term Executive Option Plan no later than three months after the effective date of the employment agreement and is entitled to term life insurance in the face amount of $2,500,000, payable to the beneficiary designated by Mr. Strasler. The Company is indebted to Michael Franklin, President of our wholly owned subsidiary Solawerks, Inc., in the amount of $1,000 for monies advanced to the Company. This loan is non-interest bearing and payable upon demand. NOTE 6 - COMMITMENTS On June 1, 2011, Amy Pennock of Pennock Consulting Group, Inc. was engaged to provide fraud and internal auditing services for the Company. Fees for services will be billed at an hourly rate, as incurred. On June 1, 2011, Peter Gordon was appointed Vice President & Executive Producer of The Golf Championships, Inc., a wholly owned subsidiary of the Company. The Company has agreed to pay a salary of $120,000 each year for the five year term 20 <PAGE> of the agreement, with 5% increases each year. In addition, Mr. Gordon is entitled to 100,000 shares of the Company's common stock as a signing bonus. The shares are to be issued but held back by the Company and not earned and delivered until one full year of service has elapsed under the agreement. As a result of the Asset Purchase Agreement made effective on March 5, 2012, Peter Gordon is no longer entitled to salaries or stock compensation of the Company and any accrued amounts have been reversed. On June 10, 2011, TGC entered into an agreement with TVA Media Group who will provide performance-based media campaigns. The Company has agreed to pay TVA Media a total of $120,000 in cash, payable in three installments beginning September 1, 2011. The second installment is due in week four of service and the final payment is due in week nine. In addition, the Company has agreed to issue stock in exchange for services at a value of $500,000 in four installments on June 20, 2011, September 1, 2011, December 1, 2011, and March 1, 2012. The number of shares issued will be determined by the five trading day Volume Weighted Average price prior to the date of issuance. On November 30, 2011, TGC modified the original Agreement by extending the due dates and modifying the terms as follows: * The final stock tranche is to be issued by March 15, 2012. * Three payments of $50,000 each, payable on January 15, 2012, February 15, 2012, and March 15, 2012. The total sum of $150,000 includes a 25% increase in the costs outlined in the original agreement as "liquidated damages" for the delay in starting the project. TVA will commence services upon receipt of payment on January 15, 2012 and will credit the Company $15,000 that may be applied towards future projects with TVA upon full payment as outlined in the contract modification. As a result of the Asset Purchase Agreement made effective on March 5, 2012, this agreement is no longer enforceable to the Company. On June 20, 2011, the Company engaged William Seery as Chief Financial Officer with an effective start date of September 1, 2011. The Company has agreed to pay a salary of $150,000 each year for the five year term of the agreement, with 5% increases each year. In addition, Mr. Seery is entitled to 200,000 shares of the Company's common stock as a signing bonus. The shares are to be issued but held back by the Company. After six months of service, 100,000 shares are to be delivered and after one full year of service has elapsed, the remaining 100,000 shares are deliverable under the agreement. Effective March 5, 2012, William Seery resigned from his position as Chief Financial Officer of the Company. There was no disagreement between the Registrant and Mr. Seery at the time of Mr. Kidd's resignation from the Board of Directors. On June 28, 2011, the Company engaged Peter Bonell as Chief Operating Officer with an effective start date of July 15, 2011. On July 15, 2011, the Company terminated its engagement with Peter Bonell. On July 22, 2011, the Company engaged Jordan Silverstein as Vice President, Public Sponsor Group & Investor Relations with an effective start date of August 1, 2011. The Company has agreed to pay a salary of $90,000 each year for the five year term of the agreement, with 5% increases each year. In addition, Mr. Silverstein is entitled to 100,000 shares of the Company's common stock as a signing bonus. The shares are to be issued but held back by the Company and not earned and delivered until one full year of service has elapsed under the 21 <PAGE> agreement. The Company has also agreed to pay bonuses equal to five percent of revenue of public company sponsors up to $10,000,000 and six percent for sponsorship revenues above $10,000,000. As a result of the Asset Purchase Agreement made effective on March 5, 2012, Jordan Silverstein is no longer entitled to salaries or stock compensation of the Company and any accrued amounts have been reversed. On July 26, 2011, the Company engaged Anthony Gebbia as Chief Operating Officer with an effective start date of August 8, 2011. The Company has agreed to pay a salary of $120,000 each year for the five year term of the agreement, with 5% increases each year. In addition, Mr. Gebbia is entitled to 100,000 shares of the Company's common stock as a signing bonus. The shares are to be issued but held back by the Company and not earned and delivered until one full year of service has elapsed under the agreement. The Company has also agreed to pay bonuses equal to $200,000, payable half in stock and half in cash, upon signing of title sponsors of the Million Dollar Invitationals. Mr. Gebbia will also receive $100,000 as a bonus, payable half in Stock and half in cash, upon signing of presenting sponsors of the Million Dollar Invitationals. Mr. Gebbia is entitled to a maximum of $300,000 each year. As a result of the Asset Purchase Agreement made effective on March 5, 2012, Anthony Gebbia is no longer entitled to salaries or stock compensation of the Company and any accrued amounts have been reversed. On August 3, 2011, TGC (fka Armada Sports & Entertainment, Inc.), a wholly owned subsidiary of Domark International, Inc. announced that Joseph Mediate, former tournament director of the LPGA's Shop Rite Classic, had joined Armada Sports as Director of Tournament Operations for The Golf Championships. The effective date of the agreement is September 1, 2011. The Company has agreed to pay a salary of $80,000 each year for the five year term of the agreement, with 5% increases each year. In addition, Mr. Mediate is entitled to 25,000 shares of the Company's common stock as a signing bonus. The shares were valued at market value as of the date of the Agreement. The shares are to be issued but held back by the Company and not earned and delivered until one full year of service has elapsed under the agreement. The Company has also agreed to pay a performance bonus equal to five percent of the first $2,000,000 in local and regional sponsors and six percent for sponsorship revenues that exceed $2,000,000. As a result of the Asset Purchase Agreement made effective on March 5, 2012, Joseph Mediate is no longer entitled to salaries or stock compensation of the Company and any accrued amounts have been reversed. On August 12, 2011, the Company entered into an Agent Agreement with VPAR Golf. VPAR has granted TGC an exclusive license on its VPAR Scoring system for Florida business development and for use at its events The Golf Championships, wherever they may occur in the world, excluding the United Kingdom. Pursuant to the terms of the agreement, TGC shall pay a license fee for year 1, payable on January 2, 2012, of $25,000. For years 2 through 7, the yearly fee is $10,000 and payable each year in January. As a result of the Asset Purchase Agreement made effective on March 5, 2012, this agreement is no longer enforceable to the Company. On September 16, 2011, the Company engaged Casey Walker as VP Administration with an effective start date of July 15, 2011. The Company has agreed to pay a salary of $48,000 each year for the five year term of the agreement, with 5% increases each year. In addition, Ms. Walker is entitled to 100,000 shares of the Company's common stock as a signing bonus. The shares were valued at market 22 <PAGE> value as of the date of the Agreement in the amount of $___. The shares are to be issued but held back by the Company until after one full year of service has elapsed. On December 28, 2011, Ms. Walker resigned her position with the Company as VP Administration and therefore not entitled to the issuance of said shares. The Company has recorded $0 expense in relation to the transaction. On September 28, 2011, Robert M. Greenway and Paul Mangiamele were appointed as directors of the Company. As per the agreement, each director will receive an annual salary of $25,000 payable in quarterly installments. In addition, each director will receive as compensation, 100,000 shares of restricted stock. The shares were valued at market value as of the date of the Agreement in the amount of $165,000. Effective March 5, 2012, Robert M. Greenway and Paul Mangiamele resigned from their respective positions on the Board of Directors. On September 29, 2011, the Company entered into an agreement with Global Sports and Entertainment to procure celebrities or celebrity athletes to participate in The Celebrity Golf Challenge series and/or host one of our other events. Fees are dependent upon the ability of Global Sports and Entertainment to procure celebrity hosts for the anticipated events. Should Global Sports and Entertainment be successful in this endeavor, fees are estimated to be $30,000 for the remainder of 2011 and $290,000 for 2012. As a result of the Asset Purchase Agreement made effective on March 5, 2012, this agreement is no longer enforceable to the Company. On October 1, 2011, the Company entered into an agreement with Brener Zwikel & Associates to develop global brand recognition of The Golf Championships and its series of events. In compensation for services, the Company has agreed to issue $90,000 in stock, payable in quarterly installments beginning January 31, 2012. In addition to the stock compensation, the Company has agreed to pay a monthly retainer in the amount of $6,000 beginning October 30, 2011 and increasing to $10,000 as of July 30, 2012 through November 30, 2012. As of February 29, 2012, $30,000 was due under this agreement, however the payments have not been made and the TGC is seeking modification of the current agreement. As a result of the Asset Purchase Agreement made effective on March 5, 2012, this agreement is no longer enforceable to the Company. On October 8, 2011, the Company entered into a letter agreement with Mary A. Beck who will serve as an independent director of DoMark. As per the agreement, the director will receive an annual salary of $25,000 payable in quarterly installments. In addition, the director will receive as compensation, 100,000 shares of restricted stock. The shares were valued at market value as of the date of the Agreement in the amount of $165,000. Effective March 5, 2012, Mary Beck resigned from her position on the Board of Directors. On October 31, 2011, the Company entered into an agreement with CBS Sports, A Division of CBS Broadcasting, Inc. Pursuant to the terms of the agreement, CBS will make available eight (8) two (2)-hour time periods for the high-definition (HD) broadcast coverage of each of the 2012-2013 and 2013-2014 Million Dollar Invitationals. As consideration, the Company is to pay the net sums of (a) $450,000 per two (2)-hour network time period made available for the 2012-2013 Programs for a total of $1,800,000; and (b) $470,000 per two (2)-hour network time period made available for the 2013-2014 Programs, for a total of $1,880,000. The net sum for the 2012-2013 Programs shall be paid to CBS as follows: (a)$50,000 by no later than thirty (30) days prior to the taping of 23 <PAGE> each Event, with the balance of $400,000 by no later than forty-five (45) days prior to the broadcast of each 2012-2013 Program. The net sum for the 2013-2014 Programs shall be paid to CBS as follows: (b)$50,000 by no later than thirty (30) days prior to the taping of each Event, with the balance of $420,000 by no later than forty-five (45) days prior to the broadcast of each 2013-2014 Program. The total net sum payable to CBS under the Agreement is $3,680,000. In addition, the Company shall have the right to the following as set forth in the Agreement: * The Company shall have the right to sell eighteen (18) thirty (30)-second commercial units during each one (1)-hour time period of network broadcast time CBS makes available for a total of thirty-six(36) thirty (30)-second commercial units per two (2)-hour Program. The Company retains all revenue received from the sale of the commercial units. * The Company will receive one (1) opening billboard, one(1) middle billboard, and one (1) closing billboard in each Program. * The notice to be included in the credit roll at the conclusion of the broadcast of each Program containing the broadcast coverage of the Events shall be: "This has been a presentation of CBS Sports in association with The Golf Championships, Inc." As a result of the Asset Purchase Agreement made effective on March 5, 2012, the CBS agreement is no longer enforceable to the Company. On February 29, 2012, the Company entered into a Memorandum of Agreement with Xiamen Taiyang Neng Gongsi and Michael Franklin. For and in consideration of the payment of an initial license fee of $10,000, and for the future payment of royalties of $5.00 per SolaPad unit sold, Xiamen granted an exclusive worldwide license and joint patent rights to the Company for a solar charging case for IPAD, including IPAD 3. The license under the Agreement expires on December 31, 2018. On April 1, 2012, the Company entered into a Consulting Agreement with Robert Hines for six months. As consideration for services related to compliance matters, the Company agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On April 1, 2012, the Company entered into a Consulting Agreement with Thomas Massey for six months. As consideration for development of the wholesale and distribution market of the Company's solar products, the Company agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On April 1, 2012, the Company entered into a Consulting Agreement with David Parisi for six months. As consideration for accounting, bookkeeping, and financial recordation services, the Company agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On April 1, 2012, the Company entered into a Consulting Agreement with Jason Burgess for six months. As consideration for web related services, the Company 24 <PAGE> agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On April 1, 2012, the Company entered into a Consulting Agreement with Brian Barrilleaux for six months. As consideration for marketing services, the Company agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On April 1, 2012, the Company entered into a Consulting Agreement with Matthew Bryant for six months. As consideration for product testing and marketing services, the Company agreed to issue 10,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $15,300. On April 1, 2012, the Company entered into a Consulting Agreement with Cathryn Walker for six months. As consideration for accounting and compliance services, the Company agreed to issue 25,000 shares of its common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $38,250. On May 9, 2012, the Company entered into a Consulting Agreement with Thomas Massey for one year. As consideration for services related to structuring the Company's operational plan and business model, the Company agrees to issue 100,000 shares of common stock on the effective date of the agreement and 150,000 shares if the Company enters negotiations with any merger or acquisition target introduced by the efforts of the Consultant. The initial 100,000 shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $275,000. On May 24, 2012, Mr. Massey was awarded the additional 150,000 shares, valued at $229,500. On May 25, 2012, the Company entered into an employment agreement with its newly appointed President, R. Brentwood Strasler, for a period of no less than three years. Mr. Strasler is entitled to an annual salary of $150,000 and 100,000 stock purchase warrants exercisable to purchase common shares of the Company at $1.00 per share. The warrants are exercisable for a three year period and can be vested quarterly on a pro rata basis over twelve months from the date of issue. Additionally, Mr. Strasler will be enrolled in a long term Executive Option Plan no later than three months after the effective date of the employment agreement and is entitled to term life insurance in the face amount of $2,500,000, payable to the beneficiary designated by Mr. Strasler. On May 29, 2012, the Company entered into a Consulting Agreement with Ian Nuttall, expiring on June 1, 2013. As consideration for consultation and advisory services, the Company agreed to issue 1,225,000 shares of common stock and 775,000 shares of the Company's restricted common stock. The shares were valued at market value as of the date of the Agreement, resulting in the Company recording an expense in the amount of $2,320,000. 25 <PAGE> NOTE 7 - LIABILITIES & NOTES PAYABLE On February 29, 2012, Company entered into a Promissory Note with R. Thomas Kidd, our then Chief Executive Officer of the Company, and Infinite Funding, Inc. ("IFI"). This Note replaces four promissory notes issued by IFI to the Company as more fully described below. Effective March 3, 2011, we obtained an unsecured loan in the amount of $75,000 from Infinite Funding, Inc. ("IFI") as evidenced by a Promissory Note from the Company to Infinite Funding, Inc. dated March 3, 2011 (the "IFI Note"). The Note was amended three times to extend the due date and was first amended on June 9, 2011, a second time on September 28, 2011, and a third amendment on December 9, 2011. Pursuant to the amendments, the Company agreed to pay extension fees of $30,000, thereby increasing the principle balance of this Note to $105,000. Effective June 10, 2011, we obtained an unsecured loan in the amount of $75,000 from Infinite Funding, Inc. ("IFI") as evidenced by a Promissory Note from the Company to Infinite Funding, Inc. dated June 10, 2011 (the "IFI Note"). The Note was amended two times to extend the due date and was first amended on September 28, 2011 and again on December 9, 2011. Pursuant to the amendments, the Company agreed to pay extension fees of $20,000, thereby increasing the principle balance of this Note to $95,000. Effective September 28, 2011, we obtained an unsecured loan in the amount of $40,000 from Infinite Funding, Inc. ("IFI") as evidenced by a Promissory Note from the Company to Infinite Funding, Inc. dated September 28, 2011 (the "IFI Note"). The Note was amended to extend the due date on December 9, 2011. Pursuant to this amendment, the Company agreed to pay an extension fee of $10,000, thereby increasing the principle balance of this Note to $50,000. Effective December 9, 2011, we obtained an unsecured loan in the amount of $100,000 from Infinite Funding, Inc. ("IFI") as evidenced by a Promissory Note from the Company to Infinite Funding, Inc. dated December 9, 2011 (the "IFI Note"). As a result of the consolidated debt, the Company is now obligated under a single Promissory Note dated February 29, 2012 in the aggregate principle amount of $355,645 along with $2,689 in accrued interest. The Note is due on October 15, 2012 and accrues interest at 3% per annum. In addition, R Thomas Kidd executed a Personal Guarantee of the Note, whereby Kidd guarantees the payment of $250,000 of the principle balance in an Event of Default pursuant to Article III of the Note. On March 2, 2012, the Company entered into a Master Credit Agreement with Infinite Funding, Inc. which provides for a non-revolving line of credit. The Company may request advances under the lending facility by issuing borrowing certificates to the Lender. Each borrowing certificate, together with simple interest accrued at 8% per year, becomes payable one year after the date of the advance received. Infinite Funding has amended the Master Credit Agreement, increasing the amount of the Lending Faciltiy from $150,000 to $200,000. As of May 31, 2012, the Company received $190,000 in advances and the Company has accrued $1,375 in interest. 26 <PAGE> NOTE 10 - INCOME TAXES The Company has available net operating loss carry-forwards for financial statement and federal income tax purposes. These loss carry-forwards expire if not used within 20 years from the year generated. The Company's management has decided a valuation allowance is necessary to reduce any tax benefits because the available benefits are more likely than not to expire before they can be used. The tax based accumulated deficit creates tax benefits in the amount of $4,801,271 from inception through May 31, 2012. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of May 31, 2012 are as follows: Deferred tax assets: Federal $ 4,801,271 State 0 ----------- Total Deferred Tax Asset 4,801,271 Less valuation allowance (4,801,271) ----------- $ 0 =========== The Company has provided a 100% valuation allowance on the deferred tax assets at May 31, 2012 to reduce such tax asset to $0 as there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. NOTE 11 - CONTINGENCIES On May 21, 2009, the Company entered into that certain Agreement for the Exchange of Common Stock (the "Victory Lane Agreement") with Victory Lane Financial Elite, LLC ("Victory Lane") with respect to a real estate lifestyle business known as Victory Lane (the "Victory Lane Business") pursuant to which the Company intended to purchase the Victory Lane Business. Shortly thereafter, a dispute arose between the Company and Victory Lane regarding alleged mis-representations made by Victory Lane in connection with the Victory Lane Agreement. In August, 2009, Victory Lane Financial Elite, LLC, Legacy Development, LLC and Patrick Costello filed suit in the Superior Court of Tattnall County, Georgia (Civ. No. 2009-V-381-JW) against the Company, R. Thomas Kidd and various officers and directors of the Company, alleging that the Company was in breach of the Victory Lane Agreement and that the Company and certain of the individual defendants had committed various torts against the plaintiffs and that certain of the individual defendants had violated various fiduciary and other duties owed to the plaintiffs in connection with the Victory Lane Agreement and the handling of the Victory Lane Business (the "VLFE Case"). The plaintiffs sought a declaratory judgment to the effect that the Victory Lane Agreement had not been executed, as well as money damages from the Company and the individual defendants. The Company and Mr. Kidd have answered the Complaint, denying any liability for the plaintiff's claims and have asserted various counterclaims 27 <PAGE> including fraud and other torts. In July 2010 the court dismissed all of the individual defendants, other than R. Thomas Kidd, in response to a motion to dismiss for lack of jurisdiction. The case has since been stayed. In December, 2009, AHIFO-21, LLC filed a lawsuit in the Superior Court of Tattnall County, Georgia (Civ. No. 2009-V-672-JS) against Victory Lane, LLC, Patrick J. Costello and Stephen Brown (the "Victory Lane Defendants") alleging that the Victory Lane Defendants owe the plaintiff more than $7,740,000 in respect of one or more loans made by the plaintiff to certain of the Victory Lane Defendants in connection with the Victory Lane Business (the "AHIFO Case"). In February, 2010, the Victory Lane Defendants filed a Third Party Complaint against the Company and R. Thomas Kidd, claiming that the Company and Mr. Kidd should be liable for any amounts the Victor Lane Defendants are required to pay to the plaintiff in this case. The Company and Mr. Kidd have answered the Complaint, denying any liability for the plaintiff's claims and have asserted various counterclaims including fraud and other torts. The Company and Mr. Kidd filed a motion to dismiss the Third Party Complaint, but the entire case was subsequently stayed. Because each of the VLFE Case and the AHIFO Case have been stayed and because discovery in those cases is not complete, the Company has not reached a determination that any loss is other than remote and that the amount of any damages, if any were determined adverse to the Company, would be reasonably estimable. The Company believes that it has meritorious claims against the opposing parties with respect to the Victory Lane Agreement and that the claims asserted against it are not meritorious. The Company intends to defend itself vigorously. NOTE 12 - STOCKHOLDER'S DEFICIT Stock Issued Stock Issued for Cash Cash Received for Assets -------- ------------- ----------- Twelve months ended May 31, 2012 -- -- -- ====== ====== ====== On June 20, 2011, the Company issued 550,660 shares of restricted common stock pursuant to the terms of the agreement entered into with TVA Media Group as discussed in Note 6. The shares were valued at $0.23 per share for a value of $125,000. On June 20, 2011 the Company recorded $125,000 in prepaid expense related to the shares issued TVA Media Group. On September 1, 2011, the Company issued 79,545 shares of restricted common stock pursuant to the terms of the agreement entered into with TVA Media Group as discussed in Note 6. The shares were valued at $1.57 per share for a value of $125,000. On September 1, 2011 the Company recorded $125,000 in prepaid expense related to the shares issued TVA Media Group. On December 15, 2011 the Company issued 75,758 shares of restricted common stock pursuant to the terms of the agreement entered into with TVA Media Group as discussed in Note 6. The shares were valued at $1.65 per share for a value of $125,000. On December 15, 2011 the Company recorded $125,000 in prepaid expense related to the shares issued TVA Media Group. 28 <PAGE> Pursuant to the Asset Purchase Agreement made effective on March 5, 2012, the agreement with TVA Media is no longer enforceable to the Company and the value in prepaid expense was removed as sold. On June 15, 2011, Peter Gordon was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $22,000, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $10,186. On August 1, 2011, Jordan Silverstein was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $150,000, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $50,137. On August 8, 2011, Anthony Gebbia was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $170,000, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $53,562. On September 1, 2011, William Seery was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $155,000, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $115,721. On September 1, 2011, William Seery was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $155,000, which will not be earned and delivered until six months of service has elapsed under the agreement. As of February 29, 2012, the shares have fully vested and the Company has recorded common stock payable. On March 1, 2012, the Company issued 100,000 common shares for a value of $140,000 or $1.40 per share. On September 1, 2011, Joseph Mediate was entitled to 25,000 shares of the Company's common stock as a signing bonus, valued at $38,750, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $9,661. 29 <PAGE> On October 2, 2011, Jim Hartley was entitled to 100,000 shares of the Company's common stock as a signing bonus, valued at $165,000, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $26,301. On October 31, 2011, Bruce Hopp was entitled to 25,000 shares of the Company's common stock as a signing bonus, valued at $42,250, which will not be earned and delivered until one full year of service has elapsed under the agreement. Under ASC 718 "Stock Compensation" the Company has expensed the proportionate value of the stock compensation as of May 31, 2011 with an offset to Additional Paid-in Capital for $3,588. On January 9, 2012, the Company issued 100,000 shares to each of its directors, Mary Beck, Paul Mangiamele, and Robert Greenway. The shares were valued at $165,000 or $1.65 per share. On March 5, 2012, 9,771,500 shares of the Company's common stock were returned to treasury as consideration for the purchase of the assets of The Golf Championships. On March 5, 2012, 50,000 shares of the Company's preferred series A shares were returned to treasury as consideration for the purchase of the assets of The Golf Championships. On April 1, 2012, the Company entered into consulting agreements with seven consultants. In consideration for services, the Company issued 160,000 shares of unrestricted common stock pursuant to the S-8 registration statement filed with the commission on May 1, 2012. The aggregate value of the stock issued was $244,800 or $1.53 per share. On May 9, 2012, the Company entered into a consulting agreement. In consideration for services, the Company issued 100,000 shares of unrestricted common stock pursuant to the S-8 registration statement filed with the commission on May 1, 2012. The aggregate value of the stock issued was $275,000 or $2.75 per share. On May 24, 2012, the Company entered into a consulting agreement. In consideration for services, the Company issued 150,000 shares of unrestricted common stock pursuant to the S-8 registration statement filed with the commission on May 1, 2012. The aggregate value of the stock issued was $229,500 or $1.53 per share. 30 <PAGE> On May 24, 2012, the Company entered into a consulting agreement. In consideration for services, the Company issued 800,000 shares of unrestricted common stock pursuant to the S-8 registration statement filed with the commission on May 1, 2012. The aggregate value of the stock issued was $2,320,000 or $2.90 per share. NOTE 13 - OTHER INCOME AND EXPENSE On March 5, 2012, the Company wrote off $456 to other income as a result of the intercompany balance owed by its wholly owned subsidiary, The Golf Championships, Inc. At May 31, 2012, the Company has taken an accrued vendor balance no longer owed and written $4,000 down to the income statement as Gain on Settlement. NOTE 14 - SUBSEQUENT EVENTS Effective June 15, 2012, the Company's Shareholders appointed Andrew Ritchie, as CEO of the Company. Mr. Ritchie has not been appointed to any committees of the Board, as the Board does not presently have any committees. On June 20, 2012, the Company formed a new wholly owned subsidiary, MuscleFoot Inc. in the state of Nevada for the purpose of distributing, marketing, and acting as sales agent for the patented foot care system, Barefoot Science. On June 21, 2012, the Company entered into an exclusive North American marketing and distribution agreement with Barefoot Science Products & Services Inc. ("Barefoot Science") through its newly formed subsidiary, MuscleFoot Inc. On June 25, 2012, the Company appointed Patrick Johnson as Vice President of corporate development. On June 26, 2012, the Company entered into an employment agreement with Patrick Johnson. On June 26, 2012, the Company entered into an agreement with RBL Communications to manage a complete social media program for the Company's wholly owned subsidiary, MuscleFoot, Inc. On July 16, 2012, the Company appointed Sean Pena to the advisory committee of its wholly owned subsidiary, MuscleFoot, Inc. On July 19, 2012, the Company, through its wholly owned subsidiary MuscleFoot, Inc., entered into an endorsement contract with Nick Symmonds. On July 25, 2012, the Company, through its wholly owned subsidiary MuscleFoot, Inc., entered into an endorsement contract with Will Claye. 31 <PAGE> ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE NONE ITEM 9A. CONTROLS AND PROCEDURES Our management team, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"), as of the last day of the fiscal period covered by this report, May 31, 2012. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of May 31, 2012. Our principal executive officer and our principal financial officer, are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management is required to base its assessment of the effectiveness of our internal control over financial reporting on a suitable, recognized control framework, such as the framework developed by the Committee of Sponsoring Organizations ("COSO"). The COSO framework, published in INTERNAL CONTROL-INTEGRATED FRAMEWORK, is known as the COSO Report. Our principal executive officer and our principal financial officer have chosen the COSO framework on which to base its assessment. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of May 31, 2012. There were no changes in our internal control over financial reporting that occurred during the fiscal year ended May 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. 32 <PAGE> ITEM 9B. OTHER INFORMATION None PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS AND EXECUTIVE OFFICERS Effective March 5, 2012, R. Thomas Kidd, Chairman and CEO the Company, resigned from all positions held with the Company, including resigning from Board service. There was no disagreement between the Registrant and Mr. Kidd at the time of Mr. Kidd's resignation from the Board of Directors. On March 5, 2012, the Company's Shareholders appointed Michael Franklin as sole Director, CEO and Corporate Secretary. Mr. Franklin will serve as a director until his successor has been elected at the next annual meeting of the Company's shareholders or until his earlier resignation, removal, or death. Michael Thomas Franklin, age 60, has been in the import/export and entertainment businesses for almost 40 years. For the last 12 years Mr. Franklin has divided his time between his home State of Florida and Xiamen, China. Since early 2010 Mr. Franklin has been focused on creating solar product designs for his own company, Xiamen Solar First, located in Xiamen, China as well as contract projects for Hui Shi You, one of the largest producers of phone accessory for domestic use in China. From July 2004-2009 Mr. Franklin was Director of Asia Direct Trade, with offices in Qingdao, Shanghai, Beijing and Xiamen, China, a design and manufacturing firm focused on fulfilling the procurement needs of a diverse international clientele. In addition, Mr. Franklin has provided consulting services as well as project management oversight for several large multinational corporations relating to their procurement processes in China. Mr. Franklin is also an accomplished pianist and Grammy Nominated Producer. From 2000-2003 he served as Music Director of Hard Rock Live. He is an Alumni of Vincennes University for Medicine, Valparaiso University, and Depaul University for Music. Effective May 25, 2012, Michael Franklin, Chairman and CEO the Company, resigned from all positions held with the Company, including resigning from Board service. There was no disagreement between the Registrant and Mr. Franklin at the time of his resignation from the Board of Directors. On May 25, 2012, the Company's Shareholders appointed R. Brentwood Strasler as sole Director, President and Corporate Secretary. Mr. Strasler will serve as a Director until his successor has been elected at the next annual meeting of the Company's shareholders or until his earlier resignation, removal, or death. 33 <PAGE> R. Brentwood Strasler, age 45, has more than twenty years experience in both private industry and the public capital markets and has a broad range of skills and expertise in corporate governance, corporate finance, and other matters faced by emerging companies. Form August 2009 to March 2012 Mr. Strasler was Vice President of Clarus Securities Inc., a Canadian based investment bank. From 2007 to 2008 he was a Senior Vice President at investment bank Westwind Partners/Thomas Weisel Group. In addition, Mr. Strasler has owned and operated businesses in a variety of industries focusing on restructurings, financings, mergers and acquisitions. His leadership has been instrumental in the successful reorganization, development, and expansion of several private companies in the diversified services, technology, and industrial manufacturing sectors. Mr. Strasler has been directly involved in raising over $275 million in public financings for companies engaged in a wide range of industries and market capitalizations. Mr. Strasler holds an Economics Degree from the University of Western Ontario and an MBA in International Finance from the University of Notre Dame. None of our officers or directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities law within the past ten (10) years. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act and rules and regulations of the SEC thereunder require our directors, officers and persons who beneficially own more than 10% of our common stock, as well as certain affiliates of such persons, to file initial reports of their ownership of our common stock and subsequent reports of changes in such ownership with the SEC. Our sole director and sole officer and persons owning more than 10% of our common stock are required by SEC rules and regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of the Forms 3, 4 and 5 that were furnished to the Company, the Company is not aware of any filings on Forms 3, 4 or Form 5 required by Section 16(a) of the Exchange Act that have not been timely filed and the Company has instituted procedures to ensure compliance in the future. The Company has determined that the following Section 16(a) filings were not made with the SEC: * R. Brentwood Strasler, our President, did not file a Form 3 within the prescribed time period after his appointment as President. Mr. Strasler was unaware of this requirement. * Andrew Ritchie, our CEO, did not file a Form 3 within the prescribed time period after his appointment as CEO. CORPORATE GOVERNANCE The Company has adopted a Financial Code of Ethics, an Audit Committee Charter, a Compensation Committee Charter, and a Policy on Suspected Misconduct, Dishonesty and Fraud. 34 <PAGE> LACK OF INDEPENDENT BOARD OF DIRECTORS AND AUDIT COMMITTEE The directors of the Company are not independent from the Company. Further, an audit committee composed of the requisite number of independent members along with a qualified financial expert has not yet been established. Considering the costs associated with procuring and providing the infrastructure to support an independent audit committee and the limited number of transactions considered or consummated by the Company, management has concluded that the risks associated with the lack of an independent audit committee are not justified. Management will periodically reevaluate this situation. LACK OF SEGREGATION OF DUTIES Management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management will periodically re-evaluate this situation. COMMITTEES The Company has an audit and a compensation committee, each of which is comprised of the Company's directors. The Company's audit committee has determined that its members are not "audit committee financial experts" within the meaning of federal securities regulations. ITEM 11. EXECUTIVE COMPENSATION For the period from June 1, 2011 to March 5, 2012, the Company accrued $50,000 as compensation to R. Thomas Kidd for his role as an officer and director. The accrued liability was sold to Mr. Kidd as a result of the Asset Purchase Agreement entered into on March 5, 2012 and therefore there are no salaries due to Mr. Kidd at May 31, 2012. For the period from March 5, 2012 to May 25, 2012, Michael Franklin received $5,000 as compensation for his role as an officer and director. Mr. Frankin did not have a formal Employment Agreement with the Company. On May 25, 2012, the Company entered into an Employment Agreement with its newly appointed President, R. Brentwood Strasler, for a period of no less than three years. Mr. Strasler is entitled to an annual salary of $150,000 and 100,000 stock purchase warrants exercisable to purchase common shares of the Company at $1.00 per share. The warrants are exercisable for a three year period and can be vested quarterly on a pro rata basis over twelve months from the date of issue. Additionally, Mr. Strasler will be enrolled in a long term Executive Option Plan no later than three months after the effective date of the employment agreement and is entitled to term life insurance in the face amount of $2,500,000, payable to the beneficiary designated by Mr. Strasler. As of May 31, 2012, the Company did not accrue any salaries under the Employment Agreement. 35 <PAGE> SUMMARY COMPENSATION TABLE Name and Principal Stock Option All Other Position Year Salary($) Bonus Awards($) Awards Compensation($) Total($) -------- ---- --------- ----- --------- ------ --------------- -------- <S> <C> <C> <C> <C> <C> <C> <C> R. Thomas Kidd, Chairman and CEO(1) 2011 -- -- -- -- -- -- R. Thomas Kidd, Chairman and CEO(1) 2012 240,000 -- -- -- -- 240,000 William Seery Chief Financial Officer (2) 2011 -- -- -- -- -- -- William Seery Chief Financial Officer (2) 2012 150,000 -- 140,000 -- -- 290,000 Michael Franklin Chairman, CEO, CFO(3) 2012 5,000 -- -- -- -- 5,000 Andrew Ritchie(5) 2011 -- -- -- -- -- -- Andrew Ritchie(5) 2012 240,000 -- 150,000 -- -- 390,000 R. Brentwood Strasler(4) 2011 -- -- -- -- -- -- R. Brentwood Strasler(4) 2012 150,000 -- 100,000 -- -- 250,000 ---------- (1) R. Thomas Kidd was Chairman of the Board and CEO of the Company until March 5, 2012. (2) Mr. Seery was Chief Financial Officer until March 5, 2012. (3) Mr. Franklin was Chairman of the Board , Chief Executive Officer, and Chief Financial Officer of the Company from March 5, 2012 until May 25, 2012. Mr. Franklin no longer serves as a member of the Board. (4) Mr. Strasler was appointed President, Director, and Corporate Secretary of the Company on May 25, 2012. (5) Mr. Ritchie was appointed Chief Executive Officer and Director of the Company on June 15, 2012. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding beneficial ownership of the Company's common stock as of September 12, 2012 by (i) each person who is known by the Company to own beneficially more than 5% of the any class of the Company's voting securities, (ii) each director of the Company, 36 <PAGE> (iii) each of the Chief Executive Officers and the two (2) most highly compensated executive officers who earned in excess of $100,000 for all services in all capacities (collectively, the "Named Executive Officers") and (iv) all directors and executive officers of the Company as a group. The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose and is based on 29,005,298 shares outstanding as of May 31, 2012. We believe that each individual or entity named has sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted. Amount and nature of beneficial ownership ------------------------------------------------- Name and Address Common Stock Preferred Stock Percentage ---------------- ------------ --------------- ---------- CRISTY, LLC, (1) -0- 50,000 63.29% (2) ---------- (1) The address for Cristy Management Limited is Akara Bldg, 24 De Castro Street, Wickhams Cay 1, Tortola, British Virgin Islands. (2) Percentage beneficial ownership as if preferred stock has been converted into shares of common stock at a ratio of 1,000 shares of common stock for every 1 share of preferred stock. CHANGES IN CONTROL On March 5, 2012, Michael Franklin purchased 50,000 shares of the Company's Series A Preferred Stock from R Thomas Kidd. Our Series A Preferred Stock is convertible into Common Stock at the rate of 1,000 shares of Common for each share of Preferred. In addition, our Preferred stock has voting rights equivalent to 1,000 votes per share. As a result, Mr. Franklin has become the controlling shareholder of Domark by virtue of his ownership of 50,000 shares of Preferred Stock with voting rights equivalent to 50,000,000 shares of our Common Stock. On May 25, 2012, Michael Franklin sold 50,000 preferred shares of the Company, in a private transaction, to Cristy Management Limited. As a result, Cristy Management Limited has become the controlling shareholder of Domark by virtue of his ownership of 50,000 shares of Preferred Stock with voting rights equivalent to 50,000,000 shares of our Common Stock. There are currently no arrangements with any party which may subsequently result in a change in control of the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE On February 29, 2012, the Company entered into a Memorandum of Agreement with Xiamen Taiyang Neng Gongsi and Michael Franklin. On March 5, 2012, the Company's prior Chief Executive Officer returned to treasury 9,771,500 shares of common stock and 50,000 shares of preferred stock in connection with an Asset Purchase Agreement dated March 5, 2012. 37 <PAGE> On March 5, 2012, Michael Franklin purchased 50,000 shares of the Company's Series A Preferred Stock from R Thomas Kidd. Our Series A Preferred Stock is convertible into Common Stock at the rate of 1,000 shares of Common for each share of Preferred. In addition, our Preferred stock has voting rights equivalent to 1,000 votes per share. Upon the conclusion of the Armada transaction, Franklin became the controlling shareholder of Domark by virtue of his ownership of 50,000 shares of Preferred Stock with voting rights equivalent to 50,000,000 shares of our Common Stock. From time to time, the Company's officers have provided loans to the Company. At May 31, 2012, the Company is indebted to Michael Franklin, President of the Company's wholly owned subsidiary Solawerks, Inc., in the amount of $1,000, which amount does not bear interest but is due on demand. This amount reflects advances made to the Company by Mr. Franklin. The sole director of the Company is not independent from the Company. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES AUDIT FEES The aggregate fees billed by DeJoya Griffith & Company, LLC for professional services rendered for the audit of the Company's annual financial statements for fiscal years ending May 31, 2012 and 2011 was $_________ and $7,500, respectively. AUDIT-RELATED FEES The aggregate fees billed by DeJoya Griffith & Company, LLC for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements for the fiscal years ended May 31, 2012 and 2011, and that are not disclosed in the paragraph captioned "Audit Fees" above, were $________ and $0, respectively. The aggregate fees billed by DeJoya Griffith & Company, LLC for assurance and related services that are reasonably related to the performance of the audit or review of the Company's annual financial statements for fiscal year ending May 31, 2012 was $0. TAX FEES The aggregate fees billed by ECFO Corporation for professional services rendered for accounting, tax compliance, tax advice and tax planning for the fiscal year ended May 31, 2012 and 2011 were $25,600 and $18,000, respectively. ALL OTHER FEES The Company has incurred no other fees for audit, audit-related, or tax services. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES FINANCIAL STATEMENTS The information required in Item 15 relating to the Company's financial statements are contained in Item 8 of this Annual Report and incorporated herein by reference. 38 <PAGE> EXHIBITS Exhibit No. Description of Exhibit Footnote ----------- ---------------------- -------- 3.1 (a) Articles of Incorporation. 1 (b) Amendment to Articles of Incorporation. 2 (c) Amendment to Articles of Incorporation. 3 3.2 Bylaws. 4 10.1 Agreement for the Exchange of Common Stock between the 5 Company and Silk for Less, Inc., dated as of June 3, 2011. 10.2 Media Campaign Agreement between the Company and TVA Media 6 Group, Inc., dated as of June 20, 2011. 10.3 Escrow Agreement between the Company and Armada Sports & 7 Entertainment, Inc., dated as of June 30, 2011. 10.4 Asset Purchase Agreement between the Company and USPT, 8 LLC, dated as of August 21, 2011. 10.6 Memorandum of Agreement between Domark International, Inc. 9 and Xiamen Taiyang Neng Gongsi dated February 29, 2012. 10.7 Master Credit Agreement between Domark International, Inc. 17 and Infinite Funding, Inc. dated March 2, 2012. 10.8 Asset Purchase Agreement between Domark International Inc. 18 and R. Thomas Kidd dated March 5, 2012 10.9 Employment Agreement between Domark International Inc. 19 and R. Brentwood Strasler dated May 25, 2012. 10.10 Employment Agreement between Domark International Inc. 20 and Andrew Ritchie dated June 15, 2012. 14 Financial Code of Ethics 21 21 Subsidiaries 22 31.1 Certification of Chief Executive Officer Pursuant to 23 Section 302 of the Sarbanes Oxley Act.* 31.2 Certification of Principal Financial Officer Pursuant to 24 Section 302 of the Sarbanes Oxley Act.* 32.1 Certification of Chief Executive Officer Pursuant to 25 Section 906 of the Sarbanes Oxley Act.* 39 <PAGE> 32.2 Certification of Principal Accounting Officer Pursuant to 26 Section 906 of the Sarbanes Oxley Act.* 99.1 Audit Committee Charter 27 99.2 Compensation Committee Charter 28 101 Interactive data files pursuant to Rule 405 of Regulation S-T. 29 Footnotes 1. Filed as Exhibit 3.1 to the Company's Form SB-2 filed on August 6, 2006 and incorporated herein by reference. 2. Set out in the Company's Form 8-K filed on June 30, 2008 and incorporated herein by reference. 3. Filed as Exhibit 3.1 in the Company's Form 8-K filed on January 8, 2009 and incorporated herein by reference. 4. Filed as Exhibit 3.2 to the Company's Form SB-2 filed on August 6, 2006 and incorporated herein by reference. 5. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 6, 2011 and incorporated herein by reference. 6. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 13, 2011 and incorporated herein by reference. 7. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 1, 2011 and incorporated herein by reference. 8. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 22, 2011 and incorporated herein by reference. 15. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 29, 2012. 17. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 5, 2012. 18. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 9, 2012. 19. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 25, 2012. 20. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 26, 2012. 21. Filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K for the year ending May 31, 2009 and incorporated herein by reference. 22. Filed herewith 23. Filed herewith 24. Filed herewith 25. Filed herewith 26. Filed herewith 27. Filed as Exhibit 99.1 to the Company's Annual Report on Form 10-K for the year ending May 31, 2009 and incorporated herein by reference. 28. Filed as Exhibit 99.2. to the Company's Annual Report on Form 10-K for the year ending May 31, 2009 and incorporated herein by reference. 29. To be filed by Amendment. 40 <PAGE> SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized. Registrant DoMark International, Inc. Date: September 12, 2012 By: /s/ Andrew Ritchie ------------------------------------- Andrew Ritchie Chief Executive Officer Date: September 12, 2012 By: /s/ Andrew Ritchie ------------------------------------- Andrew Ritchie Principal Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 12th day of September. /s/ Andrew Ritchie ---------------------------------------- Andrew Ritchie Chief Executive Officer /s/ Andrew Ritchie ---------------------------------------- Andrew Ritchie Principal Financial Officer 41

PINX:DOMK Domark International Inc Annual Report 10-K Filling

Domark International Inc PINX:DOMK Stock - Get Annual Report SEC Filing of Domark International Inc PINX:DOMK stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:DOMK Annual Report 10-K Filing - 5/31/2012
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