Elite Energies, Inc. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Elite Energies, Inc.	Financial_Report.xls
EX-32.1 - CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER - Elite Energies, Inc.	f10q1211ex32i_elite.htm
EX-31.1 - CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER - Elite Energies, Inc.	f10q1211ex31i_elite.htm
EX-31.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - Elite Energies, Inc.	f10q1211ex31ii_elite.htm
EX-32.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - Elite Energies, Inc.	f10q1211ex32ii_elite.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

_______________

FORM 10-Q

_______________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

ELITE ENERGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		333-168184		26-3936718
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(I.R.S. Employer Identification No.)

848 Stewart Drive, Suite 101

Sunnyvale, California 94085

(Address of principal executive offices)

(888) 209-9909

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o

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

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer o		Accelerated Filer o
Non-Accelerated Filer o		Smaller Reporting Company x
(Do not check if a 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 o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of February 14, 2012, there were 30,340,955 shares of common stock issued and outstanding.

Elite Energies, Inc.

FORM 10-Q

December 31, 2011

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5
Item 4	Controls and Procedures	5

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	5
Item 1A	Risk Factors	5
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5
Item 3.	Defaults Upon Senior Securities	5
Item 4.	(Removed and Reserved)	5
Item 5.	Other Information	6
Item 6.	Exhibits	6

CONTENTS

PAGE	F-1	CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2011 (UNAUDITED) AND AS OF MARCH 31, 2010 (AUDITED).

PAGE	F-2	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2011 AND 2010 (UNAUDITED).

PAGE	F-3	CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM MARCH 31, 2011 TO DECEMBER 31, 2011 (UNAUDITED).

PAGE	F-4	CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 2011 AND 2010 (UNAUDITED).

PAGES	F-5 - F-10	NOTES TO FINANCIAL STATEMENTS (UNAUDITED).

PART I-- FINANCIAL INFORMATION

Item 1. Financial Information

ELITE ENERGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	December 31, 2011		March 31, 2011
ASSETS
Current Assets
Cash	$	76,241	$	42,651
Receivables -
Trade, net		40,049		52,431
Related parties		15,365		15,682
Inventory		571,462		543,513
Prepaid expenses		1,173		7,493
Total Currents Assets		704,290		661,770
Deposit		51,809		26,809
Property and Equipment, net		41,349		37,534
Total Assets	$	797,448	$	726,113

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Payables -
Trade	$	180,732		$	126,892
Related parties		24,691			26,123
Accrued expenses -
Related parties		3,840			10,380
Interest		908			5,842
Other		6,393			10,358
Obligations under capital leases - current		5,011			6,200
Directors' loans		35,000			35,000
Loan from unrelated parties		10,000			10,000
Stockholder loans in subsidiaries		70,000			70,000
Total Current Liabilities		336.575			300,795
Obligations under capital leases - noncurrent		-			3,391
Total Liabilities		336,575			304,186

Commitments

Stockholders' Equity
Common stock, authorized 50,000,000 shares, par value $0.000001, 30,340,955 shares and 26,340,955 shares issued and outstanding on December 31, 2011 and March 31, 2011, respectively		30			26
Additional paid-in-capital		730,427			490,431
Accumulated deficit		(462,920	)		(300,321	)
Total Elite's Stockholders' Equity		267,537			190,136
Noncontrolling Interest		193,336			231,791
Total Stockholders' Equity		460,873			421,927
Total Liabilities and Stockholders' Equity	$	797,448		$	726,113

See accompanying notes

F-1

ELITE ENERGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


		Three Months Ended December 31,						Nine Months Ended December 31,
		2011			2010			2011			2010

Revenues-
Trade, net of returns	$	237,709		$	199,210		$	723,983		$	754,248
Related parties		15,494			18,050			59,821			80,415
		253,203			217,260			783,804			834,663

Cost of Revenue		203,185			174,179			629,150			644,890
Gross profit		50,018			43,081			154,654			189,773

Operating expenses
Payroll expenses		46,133			42,220			137,253			115,829
General and administrative		15,168			25,568			50,112			93,662
Rent and utilities		23,870			23,392			71,670			71,069
Legal and professional fees		19,757			14,385			89,444			79,721
Total operating expenses		(104,928	)		(105,565	)		(348,479	)		(360,281	)

Other income/(expenses)
Interest income		2			7			8			129
Interest under capital leases		(183	)		(361)			(687	)		(1,205	)
Note interest		(2,175	)		(1,575)			(6,550	)		(6,042	)
Total other income/(expenses)		(2,356	)		(1,929)			(7,229	)		(7,118	)

Loss before income taxes		(57,266	)		(64,413)			(201,054	)		(177,626	)

Provision for income taxes		-			-			-			-

Net loss		(57,266	)		(64,413)			(201,054	)		(177,626	)

Less: Net loss attributable to noncontrolling interest		(12,356	)		(20,977)			(38,455	)		(40,462	)

Net loss attributable to Elite Energies, Inc.	$	(44,910	)	$	(43,436)		$	(162,599	)	$	(137,164	)

Loss per Share - Basic and Diluted	$	(0.00	)	$	(0.00)		$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding
during the period - Basic and Diluted		30,340,955			26,340,955			29,919,137			26,340,955

See accompanying notes

F-2

ELITE ENERGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)

										Total Elite's						Total
	Common Stock				Paid in		Accumulated			Stockholders'			Noncontrolling			Stockholders'
	Shares		Amount		Capital		Deficit			Equity			Interest			Equity

Balance, March 31, 2011		26,340,955	$	26	$	490,431	$	(300,321	)	$	190,136		$	231,791		$	421,927

Issuance of Common Stock		4,000,000		4		239,996		-			240,000			-			240,000

Net Loss		-		-		-		(162,599	)		(162,599	)		(38,455	)		(201,054	)

Balance, December 31, 2011		30,340,955	$	30	$	730,427	$	(462,920	)	$	267,537		$	193,336		$	460,873

See accompanying notes

F-3

ELITE ENERGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Nine Months Ended December 31,
	2011			2010
Cash Flows from Operating Activities:
Net loss	$	(201,054	)	$	(177,626	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		8,129			10,038
Provision for doubtful accounts		-			20,390
Change in operating assets and liabilities:
(Increase)/Decrease in accounts receivable		12,382			(8,264	)
Decrease in accounts receivable from related parties		317			3,513
Decrease in accounts receivable, other		-			500
(Increase) in inventories		(27,950	)		(279,899	)
Decrease in prepaid expenses and inventory in transit		6,320			84,408
(Increase) in deposit		(25,000	)		(15,000	)
(Increase) in trademark		-			(325	)
Increase in trade accounts payable		53,840			56,866
(Decrease) in accounts payable to related parties		(1,432	)		(5,337	)
Increase/(Decrease) in accrued expenses to related parties		(6,540	)		9,260
(Decrease) in accrued interest expenses		(4,934	)		(1,958	)
Increase/(Decrease) in other accrued expenses		(3,965	)		48,196
Net Cash Used in Operating Activities		(189,887	)		(255,238	)
Net Cash Used in Investing Activities for purchase of property and equipment		(11,944	)		(15,909	)

Cash Flows from Financing Activities:
Proceeds from issuance of common stock		240,000			-
Proceeds from issuance of common stock in subsidiaries		-			90,000
Repayment of stockholder loan in subsidiaries		-			(50,000	)
Proceeds from loans from directors		-			35,000
Proceeds from loans from unrelated parties		-			10,000
Proceeds from collection of subscription receivable		-			120,001
Principal payments of capital leases		(4,579	)		(4,062	)
Net Cash Provided by Financing Activities		235,421			200,939

Net Increase/(Decrease) in Cash		33,590			(70,208)

Cash, Beginning of Period		42,651			143,116
Cash, End of Period	$	76,241		$	72,908

Supplemental cash flow information
Interest paid	$	12,171		$	9,205
Income taxes paid	$	-		$	-

See accompanying notes

F-4

ELITE ENERGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. SUMMARY OF ORGANIZATION

Elite Energies, Inc. (“ELITE”, the “Company”) is a Delaware Corporation and was formed on March 28, 2008 under the name “Global ePlatform Technologies Inc.”. On December 17, 2008, Global ePlatform Technologies Inc. changed its name to Elite Energies, Inc. The Company, located in Sunnyvale, California, is a holding company whose subsidiaries invest in the renewable energies technology and environmentally friendly building materials, products and related services.

The Company has a wholly-owned subsidiary, Elite Renewable Energies Technology, Inc. (“ERET”), which was incorporated on January 29, 2009 under the laws of the State of California. ERET invests and operates subsidiaries and plans to sign up more distributors across the nation to implement Elite Energies Distribution (EED) program. This EED program is to build up new distribution channels with local distributors at selected regions throughout the United States. In August 2009, ERET invested into a wholesale distribution operator, Quality Green Building Supplies, Inc. (“QGBS”), a California Corporation. QGBS was established in July 2009, and is operating as building materials wholesaler in the San Francisco Bay Area. The financial statements of QGBS are included in the consolidated financial statements because of the Company’s majority ownership (50.52%) and control over QGBS.

On June 7, 2011, the Company established a wholly-owned subsidiary, Elite Energies International Limited (“EEIL”), which was incorporated in Hong Kong S.A.R.. EEIL is established for the Company’s future Asia operations once the Company obtains more funding. Currently, EEIL has limited cash assets and no operations.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Principles of Consolidation

The condensed consolidated financial statements of the Company include majority and wholly-owned subsidiaries under its control. All of the material intercompany balances and transactions have been eliminated.

Use of Estimates

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

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related notes of the Company as of December 31, 2011 and for the three months and nine months ended December 31, 2011 and 2010, are unaudited. The unaudited interim condensed consolidated financial information has been prepared with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for the complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended March 31, 2011 contained in the Form 10-K filed by the Company with the SEC on June 30, 2011. The condensed consolidated balance sheet as of March 31, 2011 was derived from the Company’s audited financial statements for the year ended March 31, 2011. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management reflects all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of operations of the Company for the three months and nine months ended December 31, 2011 and 2010, the results of cash flows of the Company for the nine months ended December 31, 2011 and 2010, and the financial position of the Company as of December 31, 2011. Interim results are not necessarily indicative of the results to be expected for an entire year or any other future year or interim period.

F-5

Revenue and Cost Recognition

The Company recognizes revenue in accordance with FASB Accounting Standards Codification No. (“ASC”) 605, Revenue Recognition. The Company sells lighting products, fixtures and environmental friendly building materials. The Company recognizes revenue when persuasive evidence of a sales arrangement exists, delivery of merchandise occurs through the transfer of title and risks and rewards of ownership, the selling price is determinable, and collectability is reasonably assured. The majority of the sales contracts transfer title and risk of loss to customers upon receipt of goods. Revenues are primarily recognized upon shipment as the shipments of each product group are typically delivered to the customers within the same day. Any discrepancy between the shipment and the sales agreement is reconciled within the same day when the shipment is delivered.

Sales agreements typically do not contain product warranties except for return and replacement of defective products within a period generally ranging from 7 to 30 days from delivery. Customers have the right to return defective products, which are substantially covered under the manufacturer’s warranty. The customer receives a credit from the Company for defective products returned and the Company receives a corresponding credit provided by the manufacturer. The amounts of return of defective products are reduced from the gross sales. During the three months and nine months ended December 31, 2011 and 2010, the total amounts of return of defective products were insignificant.

Under limited circumstances, the Company gives some customer sales discounts, rebate or other sales incentives on their first-time purchase in order to expand the customer base. The amounts of sales discounts, rebate or other sales incentives are determined at the time the sales occur and are stated in the sales agreements. These amounts are reduced from the gross sales and recorded on a net basis. During the three months and nine months ended December 31, 2011 and 2010, the total amount of sales discounts and sales incentive were insignificant and no rebate amount has been issued or recorded for each period.

Expenses are recognized when they occur and matched against revenue, as a component of costs of revenue in the statement of operations in accordance with ASC 605, Revenue Recognition.

Cash

The Company considers cash on hand and amounts on deposit with financial institutions to be cash.

Allowance for Doubtful Accounts

The Company records its accounts receivable net of an allowance for doubtful accounts. The Company evaluates the trends in customers’ payment patterns, including review of specific delinquent accounts, changes in business conditions and external communications available about customers to estimate the level of allowance that is needed to address potential losses that the Company may incur due to the customer’s inability to pay. Accounts are considered delinquent or past due, if they have not been paid within the terms provided on the invoice. Delinquent account balances are written off after management has determined that the likelihood of collection is not probable.

As of December 31, 2011 and March 31, 2011, the balance on the allowance for doubtful accounts remains at $20,390. The Company recorded the amount in the previous year due to economic conditions of certain customers.

Inventory

Inventories consist of finished goods and are valued at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. Provision for potentially obsolete or slow moving inventory is made based on management’s analysis of inventory levels and future sales forecasts. There was no provision recorded for the three and nine months ended December 31, 2011 and 2010.

Property and Equipment

Property and equipment are stated at cost and are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful lives of the assets:

Office Equipment	Five Years, 150% Double Declining
Furniture and Fixtures	Ten Years, 150% Double Declining
Forklift Equipment	Five Years, 200% Double Declining
Delivery Vehicle	Five Years, 200% Double Declining
Leasehold Improvements	Three to Five Years, Straight-line

F-6

Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of a respective asset are capitalized, while expenditures that do not, such as repairs and maintenance, are expensed as incurred. The salvage value of property and equipment other than leasehold improvements is estimated to be equal to 10% of the original cost. Upon disposal, the assets and related accumulated depreciation are removed from the Company’s accounts, and the resulting gains or losses are reflected in the statements of operations.

Property and equipment to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets that management expects to hold and use is based on the excess of the carrying value of the asset over its fair value. No impairments of such assets were identified during any of the periods presented.

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair value as of December 31, 2011 and March 31, 2011, because of the relatively short maturity of these instruments.

Income Taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.

ASC 740 also provides guidance on financial statement classification, accounting for interest and penalties, accounting for interim periods and new disclosure requirements. The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest and penalties since its inception.

Recent Accounting Pronouncements

Occasionally, new accounting standards are issued or proposed by the FASB, or other standard-setting bodies that we adopt by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

NOTE 3. PROPERTY AND EQUIPMENT

At December 31, 2011 and March 31, 2011 property and equipment is as follows:

	December 31, 2011			March 31, 2011
Office Equipment	$	7,502		$	7,502
Furniture and Fixtures		14,590			13,070
Forklift Equipment		17,800			17,800
Delivery Vehicle		9,000			9,000
Leasehold Improvements		20,598			10,174
		69,490			57,546
Less: accumulated depreciation		(28,141	)		(20,012)
Property and equipment, net	$	41,349		$	37,534

Depreciation expense for the three months ended December 31, 2011 and 2010 was $2,807 and $3,761, respectively. Depreciation expense for the nine months ended December 31, 2011 and 2010 was $8,129 and $10,038, respectively.

F-7

NOTE 4. NOTES PAYABLE

On September 1, 2009, two of the stockholders of QGBS loaned QGBS $120,000 to support its operations and expansion. The loan is at 8% annual interest rate and due on demand. In September 2010, QGBS paid the principal of $50,000 on the loan to one of the stockholders plus $8,000 interest. In April and September 2011, QGBS paid interest to the same stockholder amounting to $4,000 and $1,000 in December 2011 totaling to $5,000. In November 2011, QGBS paid interest amount of $3,333 to another stockholder of QGBS.

On December 1, 2010, six directors loaned the Company the amount of $5,000 each, totaling $30,000. On December 27, 2010, another director loaned the Company the amount of $5,000. Each of the loans from the seven directors was at simple annual interest rate of 7% and due one year from the date of the loan. The Company paid $350 interest to each of these seven directors in December 2011. Further, each of the above loans from the seven directors was renewed in December 2011 for one additional year from the original maturity date with the same terms.

On December 28, 2010, an unrelated individual loaned the Company the amount of $10,000 with simple annual interest rate of 7%. The principal and interest will be due on December 27, 2011. The Company paid $700 interest to this individual in December 2011. Further, the individual agreed to extend the due date of the principal to December 27, 2012 with the same term.

The Company recorded $2,175 and $1,575 of interest expenses on the above loans during the three months ended December 31, 2011 and 2010, respectively. The Company recorded $6,550 and $6,042 of interest expenses on the above loans during the nine months ended December 31, 2011 and 2010, respectively.

On December 31, 2011 and March 31, 2011, accrued interests are as follows:

	December 31, 2011		March 31, 2011
Accrued interests
Stockholder loans in subsidiaries	$	733	$	4,867
Directors’ loans		175		792
Loan from unrelated parties		-		183
	$	908	$	5,842

NOTE 5. COMMITMENTS

Operating Leases

QGBS leases a warehouse for its green building materials operations under non-cancellable operating leases, which expire in October 31, 2012. Certain of the leases require payments for additional expenses such as maintenance and utilities. The total future minimum lease payments for operating leases with the current non-cancelable terms are $67,311 as of December 31, 2011.

Rent expense was $21,191 and $22,091 during the three months ended December 31, 2011 and 2010, respectively. Rent expense was $65,373 and $67,341 during the nine months ended December 31, 2011 and 2010, respectively.

Capital Leases

QGBS leases a forklift under capital leases. The following is an analysis of the leased property under capital leases at December 31, 2011 and March 31, 2011.

	December 31, 2011			March 31, 2011
Forklift	$	17,800		$	17,800
Less accumulated depreciation		(12,068	)		(9,612)
	$	5,732		$	8,188

F-8

The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2011.

Year ending March 31	Amount
2012	$	1,756
2013		3,511
Thereafter		-
Total minimum lease payments		5,267
Less: Amount representing interest		(256)
Present value of net minimum lease payments (a)	$	5,011

(a)	Reflected in the balance sheet as current and noncurrent obligations under capital leases of $5,011 and $-0-, respectively.

NOTE 6. EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company has only incurred losses, basic and diluted loss per share is the same. Furthermore, for the three and nine months ended December 31, 2011 and 2010, there were no diluted shares outstanding.

	Three Months Ended December 31,
		2011			2010
Numerator:
Net loss	$	(57,266	)	$	(64,413)
Less: Net loss allocated to noncontrolling interest		(12,356	)		(20,977)
Net loss attributable to the Company common stockholders—basic	$	(44,910	)	$	(43,436)
Denominator:
Weighted average common shares		30,340,955			26,340,955
Net loss attributable to the Company common stockholders per share—basic	$	(0.00	)	$	(0.00)

	Nine Months Ended December 31,
		2011			2010
Numerator:
Net loss	$	(201,054	)	$	(177,626)
Less: Net loss allocated to noncontrolling interest		(38,455	)		(40,462)
Net loss attributable to the Company common stockholders—basic	$	(162,599	)	$	(137,164)
Denominator:
Weighted average common shares		29,919,137			26,340,955
Net loss attributable to the Company common stockholders per share—basic	$	(0.01	)	$	(0.01)

NOTE 7. STOCKHOLDERS’ EQUITY

On May 4, 2011, the Company issued 4,000,000 shares of Company’s common stock to HuiHuan Consulting, Inc., a California corporation, for $240,000 cash. HuiHuan Consulting, Inc. is wholly-owned by a director of the Company.

NOTE 8. RELATED PARTY TRANSACTIONS

The Company had sales of $28,510 to a company that is wholly-owned by a shareholder of the Company during the nine months ended December 31, 2011 and had sales of $5,872 to this company during the nine months ended December 31, 2010. The Company had a receivable of $8,484 from and a payable of $24,191 to the same company as of December 31, 2011. The Company had a payable of $23,736 to the same company as of March 31, 2011.

The Company also had sales of $13,105 to a company which is 95% owned by a director of the Company during the nine months ended December 31, 2011 and had sales of $35,999 to the same company during the nine months ended December 31, 2010. The Company had a receivable of $3,628 and $11,556 from the same company on December 31, 2011 and March 31, 2011, respectively.

F-9

The Company had purchases of $33,364 from and sales of $5,054 to a company that is wholly-owned by the wife of a director of the Company during the nine months ended December 31, 2011. The Company also had purchases of $18,699 and sales of $37,304 to the same company during the nine months ended December 31, 2010.

The Company had payables of $500 and accrued expenses of $3,840 to a firm wholly-owned by an officer of the Company on December 31, 2011 for accounting services rendered and recorded $20,035 of professional service expenses during the nine months ended December 31, 2011. The Company recorded $20,285 of accounting services expenses during the nine months ended December 31, 2010. The Company also had payables of $2,115 and accrued expenses of $10,260 to this same firm on March 31, 2011. Further, the Company recorded $1,482 and $833 of professional service expenses related to compliance fillings to another company majority-owned by the same officer during the nine months ended December 31, 2011 and 2010, respectively. The Company also had payables of $272 and accrued expenses of $120 to this same company on March 31, 2011.

The Company had sales of $13,152 to an entity wholly-owned by a director during the nine months ended December 31, 2011. The Company also had a receivable of $1,454 and $4,126 from this entity as of December 31, 2011 and March 31, 2011, respectively.

The Company had purchases of $549 from a company majority-owned by a director of the Company during the nine months ended December 31, 2011.

On March 31, 2010, the Company had notes payable to two of the stockholders of QGBS, in the total amount of $120,000. In September 2010, the Company paid back $50,000 principal and $8,000 interest to one of these two stockholders. In April, September and December 2011, QGBS paid back $2,000, $2,000 and $1,000 interest to the same stockholder of QGBS totaling $5,000. In November 2011, QGBS paid back $3,333 to another stockholder of QGBS (See Note 4).

NOTE 9. SIGNIFICANT AGREEMENTS

On October 12, 2010, QGBS signed a distributorship agreement with Apollo Solar Lighting & Pole LLC, an unrelated Oregon company (“Apollo”). Under this distributorship agreement, Apollo is QGBS’s authorized distributor within the States of Oregon, Washington, Idaho and Montana for the sale and marketing of QGBS’s solar products from October 10, 2010 to October 9, 2013. In order to maintain the distributorship, Apollo must purchase on “regular sales term” (excluding returned merchandises and cancelled orders) from QGBS no less than $20,000, $50,000, and $75,000 of QGBS products during the first, second, and third 12-month periods, respectively. Further, Apollo must purchase on “regular sales term” from QGBS no less than $150,000 of QGBS’s products during the first 24 months.

NOTE 10. GOING CONCERN

As reflected in the accompanying condensed consolidated financial statements, the Company had a net loss of $201,054, used $189,887of cash in operating activities during the nine months ended December 31, 2011, and has an accumulated deficit of $462,920 at December 31, 2011. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to raise additional capital and implement its business plan will provide the opportunity for the Company to continue as a going concern.

F-10

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

The following discussion contains forward-looking statements relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Business Overview

Elite Energies, Inc. is a holding company that has incorporated a wholly-owned California subsidiary corporation, Elite Renewable Energies Technology, Inc. (“ERET”) as their operating arm. ERET focuses on conducting a broad base of activities such as selling lighting systems and green building materials. To expedite the growth process, ERET has invested into a wholesale distribution operator known as Quality Green Building Supplies, Inc. ("QGBS"), which makes ERET owns a majority equity interest of OGBS. QGBS is currently operating as a green building materials wholesaler in the San Francisco Bay Area.

Under QGBS, Elite Designers Outlet (“EDO”) a marketing division, sells and markets commercial and residential flooring products such as bamboo flooring, engineered wood flooring, kitchen cabinets and energy saving lights which inflict minimum and no harm to the environment. EDO also acts as a licensor in recruiting entrepreneurs to participate in our EDO program as licensees. This program will enable our purchasing power with suppliers allowing us to build up our nationwide brand name.

Last year, the Company established a wholly owned Hong Kong subsidiary, Elite Energies International Limited (“EEIL”), to operate and manage all the Company’s potential operations in the Hong Kong and China markets.

Business Plan

The following outlines our business plan for the next 12 months:

1.	The first 60 days Elite has engaged Globlex Transfer LLC in becoming Depository Trust & Clearing (DTC) eligible. Upon approval, shareholders will be able to trade Elite’s stock freely and easily on the OTCBB market.

The first 90 days

Our approach is to increase the sign up of existing local hardware stores with our EDO program as our licensees. EDO will continue looking for high quality manufacturers both from domestic and international suppliers to support our licensees with high quality, reliability and price sensible products. In addition, the Company plans on hiring additional marketing and sales representatives in order to boost up sales revenue and expand the sales channel.

Next 180 days

We are planning to expand our businesses into Hong Kong and China using EEIL to oversee and manage Far East operations.

Since our Chairwoman Mrs. Liu is in the industrial gas business, we will explore the opportunities in reselling industrial gas directly to end users. Our potential customers are likely to be in other cities outside of Hunan Province, China. Further, ERET plans to increase its ownership of QGBS up to 70% if ELITE has more funding.

Elite plans to change its name to “Elite Universal Holdings, Inc.”, upon approval from all directors, majority shareholders, and the government regulatory agencies.

RESULTS OF OPERATIONS

Three Months Ended December 31, 2011 Compared to Three Months Ended December 31, 2010

The following tables set forth key components of our results of operations for the periods indicated, in U.S. dollars, and key components of our revenue for the period indicated, in dollars.

	Three Months Ended December 31,
	2011			2010
	(UNAUDITED)
Revenues-
Trade, net of returns	$	237,709		$	199,210
Related parties		15,494			18,050
Total Revenue		253,203			217,260

Cost of Revenue		203,185			174,179
Gross profit		50,018			43,081

Operating expenses
Payroll expenses		46,133			42,220
General and administrative		15,168			25,568
Rent and utilities		23,870			23,392
Legal and professional fees		19,757			14,385
Total operating expenses		(104,928	)		(105,565	)

Other income/(expenses)
Interest income		2			7
Interest under capital leases		(183	)		(361	)
Note interest		(2,175	)		(1,575	)
Total other income/(expenses)		(2,356	)		(1,929	)

Loss before income taxes		(57,266	)		(64,413	)

Provision for income taxes		-			-

Net loss		(57,266	)		(64,413	)

Less: Net loss attributable to noncontrolling interest		(12,356	)		(20,977	)

Net loss attributable to Elite Energies, Inc.	$	(44,910	)	$	(43,436	)

Revenue: Our revenue was mainly generated from the sales of fixtures and environmentally friendly building materials to the customers through our 50.52% owned subsidiary QGBS. Major channel to generate revenue is the selling of the products that were purchased from the vendors to customers. For the three months ended December 31, 2011, we generated $253,203 revenue, representing an increase of $35,943 compared to the revenue of $217,260 during the same period ended on December 31, 2010. The increase of our revenue is due to more customers were spending on housing improvement this year than last year as overall economic improvement during this second half of the year.

Cost of Revenue: Our cost of revenue includes expenses mainly related to the products sold. Our cost of revenue was $203,185 for the three months ended December 31, 2011, compared to $174,179 for the three months ended December 31, 2010, representing an increase of $29,006. The increase of cost of revenue is due to the increase of the revenue generated. Further, the profit margin is about as the same during the three months ended December 31, 2011 as compared to the same period ended December 31, 2010.

Payroll expenses: The payroll expenses were $46,133 for the three months ended December 31, 2011 and $42,220 for the same period ended December 31, 2010, representing an increase of $3,913. The increase was primarily due to the hiring of new employees to perform our daily operations. During the three months ended December 31, 2011, we have 4 full-time employees and 4 part-time employees including QGBS.

General and Administrative Expenses: General and administrative expenses include depreciation, licenses, advertising, travel and state franchise taxes. Our general and administrative expenses were $15,168 for the three months ended December 31, 2011, compared to $25,568 in the same period ended December 31, 2010, representing a decrease of $10,400 which was primarily due to lesser expenses relating to the public offering for the three months ended December 31, 2011 as compared to the same period ended December 31, 2010.

Rent and utilities: The rent and utilities were $23,870 for the three months ended December 31, 2011, compared to $23,392 in the same period ended December 31, 2010, representing an increase of $478. Currently we rent a corporate business office in Sunnyvale, California, as well as a warehouse in San Leandro, California, for our subsidiary QGBS’s green building material operation.

Legal and professional fees: The legal and professional fees were $19,757 for the three months ended December 31, 2011 and $14,305 for the three months ended December 31, 2010, representing an increase of $5,372. The increase was primarily attributable to accounting and legal fees in connection with our periodical SEC filings for the three months ended December 31, 2011 as compared to the same period ended December 31, 2010.

Nine Months Ended December 31, 2011 Compared to Nine Months Ended December 31, 2010

The following tables set forth key components of our results of operations for the periods indicated, in U.S. dollars, and key components of our revenue for the period indicated, in dollars.

	Nine Months Ended December 31,
	2011			2010
	(UNAUDITED)
Revenues-
Trade, net of returns	$	723,983		$	754,248
Related parties		59,821			80,415
Total Revenue		783,804			834,663

Cost of Revenue		629,150			644,890
Gross profit		154,654			189,773

Operating expenses
Payroll expenses		137,253			115,829
General and administrative		50,112			93,662
Rent and utilities		71,670			71,069
Legal and professional fees		89,444			79,721
Total operating expenses		(348,479	)		(360,281	)

Other income/(expenses)
Interest income		8			129
Interest under capital leases		(687	)		(1,205	)
Note interest		(6,550	)		(6,042	)
Total other income/(expenses)		(7,229	)		(7,118	)

Loss before income taxes		(201,054	)		(177,626	)

Provision for income taxes		-			-

Net loss		(201,054	)		(177,626	)

Less: Net loss attributable to noncontrolling interest		(38,455	)		(40,462	)

Net loss attributable to Elite Energies, Inc.	$	(162,599	)	$	(137,164	)

Revenue: Our revenue was mainly generated from the sales of fixtures and environmentally friendly building materials to the customers through our 50.52% owned subsidiary QGBS. Major channel to generate revenue is the selling of the products that were purchased from the vendors to customers. For the nine months ended December 31, 2011, we generated $783,804 in revenue, representing a decrease of $50,859 compared to the revenue of $834,663 during the same period ended on December 31, 2010. The decrease of our revenue is due to suppliers from China failing to comply with the shipping schedule during the second quarter of the current fiscal year.

Cost of Revenue: Our cost of revenue includes expenses mainly related to the products sold. Our cost of revenue was $629,150 for the nine months ended December 31, 2011, compared to $644,890 for the nine months ended December 31, 2010, representing a decrease of $15,740. The decrease of cost of revenue is due to the decrease of the revenue generated. Further, the decrease in profit margin is due to higher purchase costs during the nine months ended December 31, 2011 as compared to the same period ended December 31, 2010.

Payroll expenses: The payroll expenses were $137,253 for the nine months ended December 31, 2011 and $115,829 for the same period ended December 31, 2010, representing an increase of $21,424. The increase was primarily due to the hiring of new employees to perform our daily operations. During the nine months ended December 31, 2011, we have 4 full-time employees and 4 part-time employees including QGBS.

General and Administrative Expenses: General and administrative expenses include depreciation, licenses, advertising, travel and state franchise taxes. Our general and administrative expenses were $50,112 for the nine months ended December 31, 2011, compared to $93,662 in the same period ended December 31, 2010, representing a decrease of $43,550 which was primarily due to lesser expenses relating to the public offering for the nine months ended December 31, 2011 as compared to the same period ended December 31, 2010.

Rent and utilities: The rent and utilities were $71,670 for the nine months ended December 31, 2011, compared to $71,069 in the same period ended December 31, 2010, representing an increase of $601. Currently we rent a corporate business office in Sunnyvale, California, as well as a warehouse in San Leandro, California, for our subsidiary QGBS’s green building material operation.

Legal and professional fees: The legal and professional fees were $89,444 for the nine months ended December 31, 2011 and $79,721 for the nine months ended December 31, 2010, representing an increase of $9,723. The increase was primarily attributable to accounting and legal fees in connection with our periodical SEC filings for the nine months ended December 31, 2011 as compared to the same period ended December 31, 2010.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have incurred recurring losses and have an accumulated deficit of $462,920 through December 31, 2011. As of December 31, 2011, the Company’s current assets were $704,290 and current liabilities were $336,575, and total cash were $76,241. The Company had cash used in operating activities for the nine months ended December 31, 2011 of $189,887 and cash used in operating activities equal to $255,238 for the same nine month period in 2010. The Company had net cash used in investing activities of $11,944 and $15,909 for the nine months ended December 31, 2011 and 2010, respectively. The Company had net cash provided by financing activities of $235,421 and $200,939 for the nine months ended December 31, 2011 and 2010, respectively.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue and additional investors’ funding. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our business plan.

GOING CONCERN

Management believes that actions presently being taken to raise additional capital and implement its business plan will provide the opportunity for the Company to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. In connection with the preparation of condensed consolidated financial statements, the Company is required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. The assumptions, estimates and judgments included within these estimates are based on historical experience, current trends and other factors we believe to be relevant at the time the condensed consolidated financial statements were prepared. On a regular basis, the accounting policies, assumptions, estimates and judgments are reviewed to ensure that the condensed consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from the assumptions and estimates, and such differences could be material.

We discussed accounting policies and assumptions that involve a higher degree of judgment and complexity within Note 2 to the condensed consolidated financial statements included in this quarterly report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company’s operating results and financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Disclosure controls and procedures. Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not required for smaller reporting companies.

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

None.

Item 3. Defaults Upon Senior Securities.

None

Item 4. (Removed and Reserved.)

Item 5. Other Information.

There was no other information during the quarter ended December 31, 2011 that was not previously disclosed in our filings during that period.

Item 6. Exhibits.

Exhibit No.		Description
31.1		Certification of the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S,C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		Interactive Data File (Form 10-Q for the quarterly period ended December 31, 2011 furnished in XBRL).

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

SIGNATURES

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

	ELITE ENERGIES, INC.

Date: February 14, 2012	By: /s/Spencer Luo
	Spencer Luo
	Chief Executive Officer
	(Duly Authorized Officer and Principal Executive Officer)


Date: February 14, 2012	By: /s/Stephen Wan
	Stephen Wan Chief Financial Officer (Principal Financial Officer)

Attached files

Elite Energies, Inc. Reports

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