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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended October 31, 2011 (Issuer changed fiscal year end from October 31 to January 31 on October 20, 2011)
   
[  ]
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period   to __________
   
 
Commission File Number:  333-147685

Landmark Energy Enterprise Inc.
(Exact name of small business issuer as specified in its charter)

Nevada
N/A
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)


1404 E Joppa Road, Towson, MD 21286
           (Address of principal executive offices)

410-296-2467
(Issuer’s telephone number)
 
Check whether the issuer (1) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days    [X] Yes    [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

[  ] Large accelerated filer Accelerated filer
[  ] Non-accelerated filer
[X] Smaller reporting company
 

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

As of December 12, 2011, there are 17,200,000 shares of common stock, par value $ 0.001 issued and outstanding.
 
 
 
1

 

TABLE OF CONTENTS


 
PART I – FINANCIAL INFORMATION
 
 
Item 1:
Financial Statements
 
Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
Item 3:
Quantitative and Qualitative Disclosures About Market Risk
 
Item 4T:
Controls and Procedures
 
 
PART II – OTHER INFORMATION
 
Item 1:
Legal Proceedings
 
Item 1A:
Risk Factors
 
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds
 
Item 3:
Defaults Upon Senior Securities
 
Item 4:
Submission of Matters to a Vote of Security Holders
 
Item 5:
Other Information
 
Item 6:
Exhibits
 


 
2

 

PART I – FINANCIAL INFORMATION

Item 1.   Financial Statements


LANDMARK ENERGY ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIATED BALANCE SHEETS(UNAUDITED)
As of January 31, 2011 and October 31, 2010

   
October 31,
   
January 31,
 
   
2011
   
2011
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 6,441     $ 7,939  
Inventory
    50,440       -  
Other receivables
    7,957       -  
Investment deposit
    -       30,000  
Interest receivable
    95       95  
Notes receivable
    177,603       177,603  
Advance payments
    36,874       -  
Deferred tax asset
    6,804       -  
Total current assets
    286,214       215,637  
                 
Property and equipment, net
    34,919       -  
                 
                 
Total assets
  $ 321,133     $ 215,637  
                 
Liabilities and stockholders’ deficit
               
Current liabilities:
               
Accrued expenses
  $ 545,438     $ 405,250  
Other payables
    77,500       -  
Due to officers
    299,609       81,500  
Total current liabilities
    922,547       486,750  
                 
Convertible notes payable
    455,000       455,000  
                 
Total liabilities
    1,377,547       941,750  
                 
Commitments and contingencies
               
                 
Stockholders’ deficit:
               
Common stock, $.001 par value, 90,000,000 shares authorized, 17,200,000
shares issued and outstanding
    17,200       17,200  
Preferred stock, $.001 par value, 10,000,000 shares authorized,
0 shares issued and outstanding
    -       -  
Additional paid-in capital
    41,800       41,800  
Deficit accumulated during the development stage
    (1,117,358 )     (785,113 )
Accumulated other comprehensive income
    1,944       -  
Total stockholders’ deficit
    (1,056,414 )     (726,113 )
                 
                 
Total liabilities and stockholders’ deficit
  $ 321,133     $ 215,637  


The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
3

 



LANDMARK ENERGY ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
 

   
For the Three Months
Ended October 31
   
For the Nine Months
Ended October 31
   
October 3, 2007 to October 31
 
   
2011
   
2010
   
2011
   
2010
   
2011
 
                               
Sales
  $ 97,706     $ -     $ 97,706     $ -     $ 97,706  
                                         
 Cost of sales
    -       -       -       -       -  
                                         
 Gross profit
    97,706       -       97,706       -       97,706  
                                         
Operating expenses:
                                       
    Selling expenses
    52,459       -       52,459       -       52,458  
    General and administrative expenses
    119,775       240,457       372,020       520,020       1,157,266  
Total operating expenses
    172,234       240,457       424,479       520,020       1,209,724  
                                         
Loss from operations
    (74,528 )     (240,457 )     (326,773 )     (520,020 )     (1,112,018 )
                                         
 Other income:
                                       
Interest income
    -       132       -       132       132  
Total other income
    -       132       -       132       -  
                                         
 Loss before provision for income taxes
    (74,528 )     (240,325 )     (326,773 )     (519,888 )     (1,111,886 )
                                         
 Provision for income taxes
    5,472       -       5,472       -       5,472  
                                         
 Net loss
    (80,000 )     (240,325 )     (332,245 )     (519,888 )     (1,117,358 )
                                         
Other comprehensive income
                                       
    Foreign currency translation adjustment
    1,320       -       1,944       -       1,944  
                                         
 Comprehensive loss
  $ (78,680 )   $ (240,325 )   $ (330,301 )   $ (519,888 )   $ (1,115,414 )
                                         
 Weighted average number of shares
                                       
Basic and diluted
    17,200,000       17,200,000       17,200,000       17,200,000          
                                         
 Loss per share
                                       
Basic and diluted
  $ (0.00 )   $ (0.01 )   $ (0.02 )   $ (0.03 )        


The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
4

 

LANDMARK ENERGY ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)

   
Common
   
Additional
   
Deficit
Accumulated
During the
   
Accumulated
other
   
Total
 
   
Stock
   
Paid-in
   
Developmental 
   
Comprehensive
   
Stockholders’
 
   
Share
   
Amount
   
Capital
   
 Stage
   
Income
   
Deficit
 
                                                 
Beginning Balance, Amount at Oct. 03, 2007 (Inception)
    -     $ -     $ -     $ -     $ -     $ -  
Issuance of Common Stock
    2,150,000       2,150       40,850                       43,000  
Net Loss
    -       -       -       (4,000 )     -       (4,000 )
Ending Balance, Amount at Oct. 31, 2007
    2,150,000       2,150       40,850       (4,000 )             39,000  
Net Loss
    -       -       -       (45,000 )     -       (45,000 )
Ending Balance, Amount at Oct. 31, 2008
    2,150,000       2,150       40,850       (49,000 )             (6,000 )
Net Loss
    -       -       -       (10,000 )     -       (10,000 )
Ending Balance, Amount at Oct. 31, 2009
    2,150,000       2,150       40,850       (59,000 )             (16,000 )
Net Loss
    -       -       -       (557,388 )     -       (557,388 )
Conversion of officer loan to contributed capital
    -       -       16,000       -       -       16,000  
Stock split 8:1
    15,050,000       15,050       (15,050 )     -       -       -  
Ending Balance, Amount at Oct. 31, 2010
    17,200,000       17,200       41,800       (616,388 )     -       (557,388 )
Net Loss for 2011
    -       -       -       (500,970 )     -       (500,970 )
Other comprehensive income
    -       -       -       -       1,944       1,944  
Ending Balance, Amount at Oct. 31, 2011
    17,200,000     $ 17,200     $ 41,800     $ (1,117,358 )   $ 1,944     $ (1,056,414 )



The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
5

 


LANDMARK ENERGY ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

   
 
For the Nine Months
Ended October 31,
   
October 3, 2007
(Inception)
to  October 31,
 
   
2011
   
2010
   
2011
 
                   
Cash flows from operating activities:
                 
Net loss
  $ (332,245 )   $ (519,888 )   $ (1,117,358 )
Adjustments to reconcile net income (loss) to cash used in operating activities:
                       
           Depreciation
    3,673       -       3,673  
Changes in assets and liabilities:
                       
Inventory
    (49,062 )     -       (49,062 )
Other receivables
    (7,740 )     (95 )     (7,835 )
Advance payments
    (35,867 )     (4,000 )     (35,867 )
Deferred tax assets
    (6,618 )     -       (6,618 )
Other Payables
    77,500       -       77,500  
Accrued expenses
    140,188       306,750       545,438  
                         
Total adjustments
    122,074       302,655       527,229  
                         
Net cash used in operating activities:
    (210,171 )     (217,233 )     (590,129 )
                         
Cash flows from investing activities:
                       
Acquisition of fixed assets
    (37,637 )     -       (37,637 )
Investment deposit
    31,072       (30,000 )     1,072  
Notes receivable
    -       (174,075 )     (177,603 )
Net cash used in investing activities:
    (6,565 )     (204,075 )     (214,168 )
                         
Cash flows from financing activities:
                       
Capital contribution
    -       -       16,000  
Proceeds from convertible notes payable
    -       420,000       455,000  
Proceeds from sale of common stock
    -       -       43,000  
Due to officers
    213,734       18,000       295,234  
Net cash provided by financing activities:
    213,734       438,000       809,234  
                         
Effect of foreign currency translation on cash
    1,504       -       1,504  
                         
Net increase (decrease) in cash and cash equivalents
    (1,498 )     16,692       6,441  
                         
Cash and cash equivalents – beginning
    7,939       -       -  
                         
Cash and cash equivalents – ending
  $ 6,441     $ 16,692     $ 6,441  
                         


The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
6

 
 
LANDMARK ENERGY ENTERPRISE, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Organization and Nature of Business

Landmark Energy Enterprise, Inc. (formerly Reflex, Inc.) (“Landmark” or “The Company”) was a development stage company and incorporated in Nevada on October 4, 2007.  The Company engages in the research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications.

On July 26, 2010, the Company formed a wholly owned subsidiary company, Dalian Landmark Energy Technology Co, Ltd (“Dalian Landmark”) in Dalian, the People’s Republic of China.

On September 15, 2010, the Company entered a share/ownership transfer agreement to acquire 30% ownership of Dalian Aquarius Energy Technology U.S.A. Co., Ltd (“Dalian Aquarius”). However, the Share/Ownership Transfer Agreement has never been closed and the shares of Dalian Aquarius have never been transferred to the Company.
 
 
On January 14, 2011, the Company prepared a rescission agreement and sent it to all parties to the share/ownership transfer agreement. Upon the execution of such rescission agreement, the share/ownership transfer agreement will be officially terminated and rescinded.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements include the accounts of its controlled subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from January 31, 2011 through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

Reclassification

Certain amounts as of January 31, 2011 were reclassified for presentation purposes.

Note 3– Inventory

Inventory by major categories as of October 31, 2011 and January 31, 2011 are summarized as follows:

   
October 31, 2011
   
January 31, 2011
 
             
Raw materials
  $ 41,631     $ -  
Supplies
    8,809       -  
    Total Inventory
  $ 50,440     $ -  

Note 4– Notes Receivable

On October 12, 2010, Landmark loaned $174,075 to Dalian Aquarius they have entered into a share/ownership transfer agreement with.  The loan is unsecured, bears 1% interest and is due on demand.

On Dec 15, 2010, Landmark loaned $3,528 to a third party entity. The loan is unsecured, non-interest bearing and is due on demand.
 
 
 
7

 
 
Note 5 – Advance Payments

Advance payments as of October 31, 2011 and January 31, 2011 were $36,874 and $0, respectively. The amounts primarily represent purchases from vendors.

    Note 6 – Property and Equipment

Property and equipment as of October 31, 2011 and January 31, 2011 consisted of the following:

   
October 31, 2011
   
January 31, 2011
 
             
Machinery and equipment
  $ 19,028     $ -  
Vehicles
    19,667       -  
    Subtotal
    38,695       -  
Less: Accumulated depreciation
    3,776       -  
Total
  $ 34,919     $ -  

Note 7 – Accrued Expenses
Accrued expenses as of October 31, 2011 and January 31, 2011 consisted of the following:

   
October 31, 2011
   
January 31, 2011
 
             
Accrued wages
  $ 468,585     $ 377,000  
Accrued rent
    45,000       22,500  
Accrued accounting & audit fee
    31,853       5,750  
    Total accrued expenses
  $ 545,438     $ 405,250  


Note 8 – Due to Officers

The executive officers of the Company Tonghuai Wang, Shulan Wang and Yidian Dong from time to time, provide non-interest bearing advances to the Company for working capital. The company owes an amount of $299,609 and $81,500, as of October 31, 2011 and January 31, 2011, respectively, to the executive officers.

During the period ended January 31, 2011, a former officer agreed to convert the prior balance due to the officer of $16,000 to capital.  The amount has been recorded as additional paid in capital as of January 31, 2011.

Note 9– Convertible Notes Payable

The Company received loans from seven individuals prior to January 31, 2011. The loans are due five years from the date the funds were received. The loans are non-interest bearing and can be converted to stock at $1.00 per share at any time by the note holders.  The loans are all due between April and December 2015.  The balance due on these convertible notes was $455,000 as of October 31, 2011 and January 31, 2010, respectively.

Note 10 – Common Stock

The Company has 90,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock authorized.

During the period ended January 31, 2011, a former officer of the company agreed to convert an amount owing to them of $16,000 to contributed capital.

On April 19, 2010, the Company effectuated a 8:1 stock split which has been presented retroactively in the statement of stockholders’ deficit and our weighted average shares outstanding calculation.

The Company has 17,200,000 shares of common stock and -0- shares of preferred stock issued and outstanding as of October 31, 2011.



 
8

 

Note 11 – Commitments and Contingencies

The Company signed two officer leases during the year ended October 31, 2010.  The corporate office lease requires rent of $2,500 per month beginning on February 1, 2010 and continuing through January 31, 2012.

The show room lease requires monthly rent of approximately $1,063 beginning on May 1, 2010 and continuing through October 31, 2011.

Neither lease required a security deposit.  Accrued rent on the office lease was $52,500 and $ 30,000 as of October 31, 2011 and January 31, 201.

The Company also entered into three employment agreements on January 1, 2010.  The agreements call for total monthly wages of $28,000 beginning on February 1, 2010.  All three agreements continue through October 31, 2011 and at that time can be renewed. The minimum annual wages due on these agreements for the year ended October 31, 2011 is $336,000.

Additionally, on April 12, 2010, the company signed an agreement with another employee for a term of six months.  The contract required monthly wages of $20,000.

The total amount accrued for the above contracts was $530,189 and $441,000 as of October 31, 2011 and January 31, 2010.

Note 12 – Liquidity and Going Concern

Landmark Energy Enterprises, Inc. has negative working capital, has incurred losses since inception, and has received no revenues from sales of products or services.  These factors create substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
 
The ability of Landmark to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

Note 13 – Income Taxes

As of October 31, 2011, the Company had net operating loss carry forwards of approximately $1,117,358 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur.

Note 14 – Loss Per Share

The Company presents loss per share on a basic and diluted basis. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss by the weighted average number of shares outstanding plus the dilutive effect of potential securities.

   
For the three Months Ended
   
For the Nine Months Ended
 
   
October 31
   
October 31
 
   
2011
   
2011
   
2010
   
2010
 
                         
Net loss
  $ (80,000 )   $ (240,325 )   $ (332,245 )   $ (519,888 )
                                 
Weighted average common shares
    17,200,000       17,200,000       17,200,000       17,200,000  
  (denominator for basic loss per share)
                               
                                 
Effect of dilutive securities:
    -       -       -       -  
                                 
Weighted average common shares
    17,200,000       17,200,000       17,200,000       17,200,000  
  (denominator for diluted loss per share)
                               
                                 
Basic loss per share
  $ (0.00 )   $ (0.01 )   $ (0.02 )   $ (0.03 )
Diluted loss per share
  $ (0.00 )   $ (0.01 )   $ (0.02 )   $ (0.03 )
 
 
 
9

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.   These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Company Overview

We mainly engage in the research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications. 

Our main products are hydrogen and oxygen generating machines, which have widely industrial and commercial uses, such as welding, cutting, braising and motor vehicle engine carbon cleaning.

We were incorporated under the name “Reflex Inc” in the State of Nevada on October 4, 2007. Initially we were engaged in the business of developing, manufacturing, and selling degradable fast-food packaging specifically for use as heating systems in Indonesia, China and other Asian countries. Budi Setyawan and Herdiansyah Milana were the members of board of directors and the officers from our inception to December 2009.

On December 09, 2009, Budi Setyawan and Herdiansyah Milana executed and consummated an Affiliate Stock Purchase Agreement under which they sold all the 1,200,000 shares of common stock they owned in the Company, representing approximately 55.8% of the total issued and outstanding shares of common stock of the Company, to a group of individual purchasers Nai Sung Chou, Yidian Dong, Di Zhang, Te Hung Chou, and Zemin Su for a total price of $ 180,000.00.
 
In connection with the share purchase transaction, Budi Setyawan and Herdiansyah Milana resigned from all the positions they held in the Board of Directors and the executive office of the Company. Nai Sung Chou, Yidian Dong, David Chung, Di Zhang, Te Hung Chou, Zemin Su, Tonghuai Wang were elected as the members of the Board Director of the Company.  Nai Sung Chou was appointed as the President of the Board of Directors and the Chief Executive Officer of the Company. Di Zhang was appointed as the Secretary of the Board of Directors. Yidian Dong was appointed as the Treasurer of the Board of Directors and the Chief Financial Officer of the Company. On November 16, 2010, Nai Sung Chou resigned as the Chief Executive Officer and Yidian Dong was appointed the Chief Executive Officer.
 
On December 21, 2009, we changed our name to “Landmark Energy Enterprise, Inc”.

On April 19, 2010, we effectuated a 8:1 forward stock split which increase the total number of shares of issued and outstanding common stock to 17, 200,000 (There are 2,150,000 shares of issued and outstanding common stock prior to the stock split). The par value of the common stock remains the same, which is $ 0.001. 

On July 26, 2010, we formed a wholly owned subsidiary company, Dalian Landmark Energy Technology Co, Ltd (“Dalian Landmark”), in Dalian, the People’s Republic of China.

On September 15, 2010, we, along with our wholly owned subsidiary Dalian Landmark, entered a Share/Ownership Transfer Agreement with Te Hung Chou and Dalian Aquarius Energy Technology U.S.A..Co., Ltd (“Dalian Aquarius”), a limited liability company formed under the laws of the People’s Republic of China. Under the Share/Ownership Transfer Agreement, Te Hung Chou agreed to transfer to Dalian Landmark thirty percent (30%), non-dilutive, of the total issued and outstanding shares of Dalian Aquarius (“Dalian Ownership”). Dalian Aquarius shall maintain the said Dalian Ownership non-dilutive. In exchange for the Dalian Ownership, Dalian Landmark shall pay US $ 1,390,000.00 (or RMB 9,424,200Yuan) to Te Hung Chou.  As the parent company of Dalian Landmark, we may issue 500,000 shares of our common stock to Te Hung Chou as an alternative consideration for the Dalian Ownership transferred by Te Hung Chou to Dalian Landmark.
 
 
 
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The actual transfer of the Dalian Ownership described above has not been carried out and none of the parties to the Share/Ownership Transfer Agreement has performed its obligations. On January 14, 2011, we, along with our wholly owned subsidiary Dalian Landmark entered an Agreement of Rescission (“Rescission Agreement”) with Te Hung Chou and Dalian Aquarius to rescind the Share/Ownership Transfer Agreement we entered on September 15, 2010. Under the Rescission Agreement, all parties to the Share/Ownership Transfer Agreement rescind, ab initio all of the transactions contemplated by the Share/Ownership Transfer Agreement and all parties agree that all of documents and instruments relating to the Share/Ownership Transfer Agreement dated September 15, 2010, including any and all promissory notes or similar instruments issued by Dalian Landmark to pay Te Hung Chou US $ 1,390,000.00 (or RMB 9,424,200Yuan), are hereby terminated, rescinded and rendered null and void, ab initio.

On September 15, 2010, our wholly owned subsidiary Dalian Landmark entered a Patent and Assets Transfer Agreement with Dalian Aquarius that has developed one or more patents for the generation of hydrogen through proprietary designed machines (“Machines”) and owns certain assets related to Machines. Under the Patent and Assets Transfer Agreement, Dalian Aquarius transferred and assigned to Dalian Landmark the said patents (“Patents”) and assets (“Assets”) related to the Machines. In exchange for the Patents and Assets, Dalian Landmark  shall execute and deliver to  Dalian Aquarius a Promissory Note, to pay US $ 2,780,000.00 (or RMB 18,848,400.00 Yuan)  (“Transfer Price”) to Dalian Aquarius. At the option of Dalian Aquarius and its assigns or successors and subject to our consent, the said Promissory Note may be converted into 1,000,000 shares of common stock of Landmark Energy Enterprise Inc. As a result of the Patent and Assets Transfer Agreement, Dalian Landmark owns all right, title and interest in and to the patent rights and the related documents and material (“Patent Rights”) for the generation of hydrogen through Machines.

On September 15, 2010, Dalian Landmark and Dalian Aquarius entered a License and Manufacture Agreement, in which Dalian Landmark granted to Dalian Aquarius a non-exclusive and non-transferrable license to use Patent Rights to manufacture the Machines in the People’s Republic of China. Dalian Aquarius shall not permit and allow any third party to use the Patent Rights without the prior written approval of Dalian Landmark. Under the terms of the License and Manufacture Agreement, Dalian Aquarius will not claim ownership rights to Patent Rights, other than the right to use the Patent Rights; also both Dalian Aquarius and Dalian Landmark may appoint one representative to each other’s Board of Directors or the equivalent governing body. Dalian Aquarius also agrees to manufacture and sell the Machines Dalian Landmark at cost and provide technical support, which means no profit will be made from the sale of the Machines to Dalian Landmark. Dalian Aquarius also agrees that in the event that Dalian Aquarius sells the Machines to any other third party with the express permission of Dalian Landmark, Dalian Aquarius shall pay a license fee equal to 6% of the total sales price to Dalian Landmark. Dalian Landmark agrees to provide the working capital for Dalian Aquarius to launch the manufacturing of the Machines and the provided working capital shall be used solely for the purpose of the production of the Machines and the related administrative expenses, with all provided working capital to be properly accounted for and managed pursuant to a financial oversight committee consisting of two representatives each of Dalian Landmark and Dalian Aquarius. At the option of Dalian Landmark, Dalian Aquarius shall display with all units of the Machines an approved symbol notifying the consumer of the patent and/or trademark rights owned by and licensed to Dalian Landmark.

Upon the consummation of the above described Patent and Assets Transfer Agreement and License and Manufacture Agreement, we officially launched the business of research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications. 
 
 
 
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Market

As of October 31, 2011, we just launched the business of developing hydrogen and oxygen generating technologies and designing and selling hydrogen and oxygen generating equipments. Our business operations are mainly carried out by our wholly owned Chinese subsidiary Dalian Landmark Energy Technology Co, Ltd in China. Our products have large marker in China due to the facts that our products generate hydrogen which can be used a cleaner and more efficient source of energy for a variety of industrial and commercial uses. As an emerging market with massive manufacturing and construction industries, China has strong demands for cleaner and more efficient energy sources. As to our motor vehicle engine carbon cleaning products, they also have large market in China due to the fact that there are growing number of automobile vehicles produced and sold in China. Growing environmental concerns encourage the car inspectors and car users take measures to reduce the carbon accumulation in the engines of their vehicles.

Suppliers

As of October 31, 2011, we did not have our own manufacturing facility. Pursuant to the License and Manufacture Agreement,, Dalian Aquarius Energy Technology U.S.A..Co., Ltd (“Dalian Aquarius”), a limited liability company formed under the laws of the People’s Republic of China, manufactures the hydrogen and oxygen generating machines with the license right granted by us and sells the manufactured products to us at cost.  For the period ended October 31, 2011, Dalian Aquarius was our sole supplier.

Customers

Since our products have wide industrial and commercial uses, our customers are those companies and businesses that require heavy load of cutting, welding and brazing work  during their manufacturing or production process, such as ship builders, mining companies, metal works, etc. Our automobile engine carbon cleaning devices are used by car inspection stations, dealerships, mechanic shops and individual car owners.

Competitions

To our knowledge, there are several other companies in China that also produce the hydrogen and oxygen generating machine. Changsha Okay Energy Series Equipment Company Ltd. and Shanghai COCH Energy Co. Ltd  are examples of the competitors.

Employee

As of October 31, 2011, we have 4 employees.

Manufacturing

As of October 31, 2011, we did not have our own manufacturing facility. Pursuant to the License and Manufacture Agreement,, Dalian Aquarius Energy Technology U.S.A..Co., Ltd (“Dalian Aquarius”), a limited liability company formed under the laws of the People’s Republic of China, manufactures the hydrogen and oxygen generating machines with the license right granted by us and sells the manufactured products to us at cost.

Intellectual Property

As of October 31, 2011, we owned two patents registered with the State Intellectual Property Office of the People’s Republic of China. The patent numbers are 200820218700.8 and 200820218701.2. One patent is regarding the technologies for hydrogen and oxygen generating devices and the other one is regarding the technologies for solar energy emergency sensory LED lighting devices.

Environmental Law
 
There were many new laws, regulations, rules and notices regarding the environment and energy production adopted, promulgated and put into force during past years.  The Chinese government is putting more stringent requirements and urgency on reducing pollution and emissions and improving energy efficiency nationwide. Our products are designed and constructed to comply with the environmental laws and regulations of China. 
 
 
 
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Results of Operations for the Three and Nine months Ended October 31, 2011 and 2010
 

   
For the Three Months
   
For the Nine Months
 
   
Ended October 31,
   
Ended October 31,
 
   
2011
   
2010
   
2011
   
2010
 
                         
 Sales
  $ 97,706     $ -     $ 97,706     $ -  
                                 
 Cost of sales
    -       -       -       -  
                                 
 Gross profit
    97,706       -       97,706       -  
                                 
Total operating expenses
    172,234       240,457       424,479       520,020  
                                 
Loss from operations
    (74,528 )     (240,457 )     (326,773 )     (520,020 )
                                 
Income Taxes
    5,472       -       5,472       -  
                                 
 Net Income (Loss)
    (80,000 )     (240,325 )     (332,245 )     (519,888 )
                                 
 Comprehensive income(Loss)
    (78,680 )     (240,325 )     (330,301 )     (519,888 )

Sales: 

Our sales for the three months ended October 31, 2011 were $97,706, an increase of $97,706  from our sales of $0 for the three months ended October 31, 2010. Such increase was mainly due to carbon removal of the car.

 Our sales for the nine months ended October 31, 2011 were $97,706,  an increase of $97,706  from our sales of $0 for the nine months ended October 31, 2010. Such increase was mainly due to carbon removal of the car.

Gross Profit: 

As a result of the foregoing, we generated an operating profit of $97,706  for three months ended October 31, 2011, and an operating profit of  -$74528 for nine months ended October 31, 2011.

Operating Expenses: 

Operating expenses, including selling expenses, and general and administrative expenses, were $172,234 for the three months ended October 31, 2011 as compared to $240,457 for the three months ended October 31, 2010, a decrease of $68,223. The decrease of these major expenses was mainly due to decrease of the total salary.

Operating expenses, including selling expenses, and general and administrative expenses, were $424,479 for the nine months ended October 31, 2011 as compared to $520,020 for the nine months ended October 31, 2010, a decrease of $95,541. The decrease of these major expenses was mainly due to decrease of the total salary.

Income Taxes: 

Our income tax was $5,472 for the three months ended October 31, 2011, comparing to $ 0 for the same quarter ended October 31, 2010, an increase of $5,472. Such increase is due to the fact that we started to generate revenues from our business operations in the three months ended October 31, 2011.

Our income tax was $5,472 for the nine months ended October 31, 2011, comparing to $ 0 for the same quarter ended October 31, 2010, an increase of $5,472. Such increase is due to the fact that we started to generate revenues from our business operations in the nine months ended October 31, 2011.
 

 
 
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Net Loss: 

Net Loss for the three months ended October 31, 2011 was $80,000, a decrease of $160,325 compared with $ 240,325of the three months ended October 31, 2010. This decrease in net loss was the result of the revenues that we have generated from our business operations in the three months ended October 31, 2011.

Net Loss for the nine months ended October 31, 2011 was $332,245, a decrease of $187,643 compared with $519,888of the nine months ended October 31, 2010. This decrease in net loss was the result of the revenues that we have generated from our business operations in the nine months ended October 31, 2011.

Comprehensive loss: 

The comprehensive loss, which adds the currency adjustment to net loss, was $78,680 for the three months ended October 31, 2011 as compared with $240,325 for the three months ended October 31, 2010. The decrease of comprehensive income was mainly due to the fact that we started to generate revenues from our business operations in the three months ended October 31, 2011.

The comprehensive loss, which adds the currency adjustment to net loss, was $330,301 for the nine months ended October 31, 2011 as compared with $519,888 for the nine months ended October 31, 2010. The decrease of comprehensive income was mainly due to the fact that we started to generate revenues from our business operations in the nine months ended October 31, 2011.

Liquidity and Capital Resources

As of October 31, 2011, we had cash and cash equivalents of $6,441. Our current assets were $286,214 and our current liabilities were $922,547 as of October 31, 2011, which resulted in a current ratio of approximately 0.31 Total stock holders’ equity as of October 31, 2011 was -$1056414. 

The following table sets forth a summary of our cash flows for the periods indicated:


   
For the Nine Months Ended
October 31,
 
   
2011
   
2010
 
             
Cash flow from operating activities:
    (210,171 )     (217,233 )
                 
Cash flow from investing activities:
    (6,565 )     (204,075 )
                 
Cash flow from financing activities:
    213,734       438,000  
                 


 Net cash used in operating activities was $210,171 for the nine months ended October 31, 2011, a decrease of $7,062 from $217,233 for the nine months ended October 31, 2010 primarily as a result of same operation.

Net cash used investing activities was $6,565for the nine months ended October 31, 2011, which was an decrease of $197,510 from net cash used in investing activities was $204,075 for the nine months ended October 31, 2010 primarily result of decrease loan to the others..

Net cash provided by financing activities amounted to $213,734 for the nine months ended October 31, 2011, compared to net cash provided by financing activities of $438,000 for the nine months ended October 31, 2010. The decrease of cash provided by financing activities was primarily results of decrease loan from borrowers.

Off Balance Sheet Arrangements

As of October 31, 2011, there were no off balance sheet arrangements.
 
 
 
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Going Concern
 
We have negative working capital, have incurred losses since inception, and have not yet received revenues from sales of products or services.  These factors create substantial doubt about our ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling our equity securities and obtaining debt financing to fund out capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4T.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2011.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of October 31, 2011, our disclosure controls and procedures are effective.  There have been no changes in our internal controls over financial reporting during the quarter ended October 31, 2011.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are 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 in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on the evaluation performed, our management concluded that during the period covered by this report, our internal controls over financial reporting were effective.

Changes in Internal Control
 
We have also evaluated our internal controls for financial reporting, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that occurred during the quarterly period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
 
 
 
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PART II – OTHER INFORMATION

Item 1.     Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A:  Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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

On December 09, 2009, Budi Setyawan and Herdiansyah Milana (“Sellers”), the majority shareholders of the Company executed and consummated an Affiliate Stock Purchase Agreement under which Sellers sold all the 1,200,000 shares of common stock they owned in the Company, representing approximately 55.8% of the total issued and outstanding shares of common stock of the Company, to a group of individual purchasers Nai Sung Chou, Yidian Dong, Di Zhang, De Hong Chou, and Zemin Su (the “Purchasers”), for a total price of $ 180,000.00. As the result, Purchasers Nai Sung Chou, Yidian Dong, Di Zhang, De Hong Chou, and Zemin Su acquired approximately 55.8% of the total issued and outstanding shares of common stock of the Company and obtained the control of the Company.
 
 
 
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Item 3.     Defaults upon Senior Securities

None

Item 4.     Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended October 31, 2011.

Item 5.     Other Information

None
The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Item 6.      Exhibits

Exhibit No.
 
Description
     
3.1
 
Articles of Incorporation (1)
     
3.2
 
Bylaws (1)
     
10.1
 
Affiliate Stock Purchase Agreement (2)
     
10.2
 
Share / Ownership Transfer Agreement (3)
     
10.3
 
Agreement of Rescission (4)
     
10.4
 
Patent and Assets Transfer Agreement (3)
     
10.5
 
License and Manufacture Agreement (3)
     
31.1
 
Section 302 Certificate of Chief Executive Officer
     
31.2
 
Section 302 Certificate of Chief Financial Officer
     
32.1
 
Section 906 Certificate of Chief Executive Officer
     
32.2
 
Section 906 Certificate of Chief Financial Officer
     
101    Interactive data files pursuant to Rule 405 of Regulation S-T. 

 
(1) Incorporated by reference to the Form SB-2 registration statement filed on November 28, 2007.
 
(2) Incorporated by reference to the Report on Form 8-K as filed on December 11, 2009.
  
(3) Incorporated by reference to the Report on Form 8-K as filed on September 23, 2010.

(4) Incorporated by reference to the Report on Form 8-K as filed on February 7, 2011.
 
 
 
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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Landmark Energy Enterprise Inc

By:
/s/Yidian Dong
 
Yidian Dong
 
Chief Executive Officer
Chief Financial Officer
Director
 
 
December 15, 2011

 
 
 
 
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