Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - LANDMARK ENERGY ENTERPRISE, INC. | Financial_Report.xls |
| EX-32.2 - LANDMARK ENERGY ENTERPRISE, INC. | landmark10qaex322043012.htm |
| EX-31.1 - LANDMARK ENERGY ENTERPRISE, INC. | landmark10qaex311043012.htm |
| EX-32.1 - LANDMARK ENERGY ENTERPRISE, INC. | landmark10qaex321043012.htm |
| EX-31.2 - LANDMARK ENERGY ENTERPRISE, INC. | landmark10qaex312043012.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
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[X]
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended April 30, 2012
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[ ]
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Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period to __________
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Commission File Number: 333-147685
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Landmark Energy Enterprise Inc.
(Exact name of small business issuer as specified in its charter)
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Nevada
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N/A
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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1404 E Joppa Road, Towson, MD 21286
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(Address of principal executive offices)
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Phone: 443-956-2392
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(Issuer’s telephone number)
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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 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). [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.
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[ ] Large accelerated filer Accelerated filer
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[ ] Non-accelerated filer
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[X] Smaller reporting company
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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 June 18, 2012, there are 17,200,000 shares of common stock, par value $ 0.001 issued and outstanding.
Explanatory Note
The purpose of this Form 10-Q/A Amendment is to furnish the Interactive data files pursuant to Rule 405 of Regulation S-T.
1
PART I – FINANCIAL INFORMATION
LANDMARK ENERGY ENTERPRISE INC
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 2012 AND JANUARY 31, 2012
The accompanying notes are an integral part of these consolidated financial statements.
2
LANDMARK ENERGY ENTERPRISE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
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For the Three Months Ended
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April 30,
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2012
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2011
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Sales
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$ | - | $ | - | ||||
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Cost of sales
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- | - | ||||||
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Gross profit
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- | - | ||||||
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Operating expenses:
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||||||||
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Selling, general and administrative
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99,457 | 149,220 | ||||||
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Loss from operations
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(99,457 | ) | (149,220 | ) | ||||
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Provision for income taxes
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- | - | ||||||
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Net loss
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(99,457 | ) | (149,220 | ) | ||||
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Other comprehensive loss
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Foreign currency translation adjustment
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(44 | ) | - | |||||
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Comprehensive loss
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$ | (99,501 | ) | $ | (149,220 | ) | ||
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Loss per common share
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Basic
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$ | (0.01 | ) | $ | (0.01 | ) | ||
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Diluted
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$ | (0.01 | ) | $ | (0.01 | ) | ||
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Weighted average number of common shares outstanding
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Basic and diluted
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17,200,000 | 17,200,000 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
LANDMARK ENERGY ENTERPRISE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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For the Three Months Ended
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April 30,
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2012
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2011
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Cash flows from operating activities:
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Net loss
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$ | (99,457 | ) | $ | (149,220 | ) | ||
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Adjustments to reconcile net loss to net cash
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provided by (used in) operating activities:
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Depreciation
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2,301 | 226 | ||||||
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Loss on disposal of property and equipment
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198 | |||||||
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Changes in current assets and current liabilities:
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Inventory
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(1,445 | ) | (19,549 | ) | ||||
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Prepaid VAT tax
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(708 | ) | - | |||||
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Prepaid expenses
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- | (63,832 | ) | |||||
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Other current assets
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2,100 | (4,035 | ) | |||||
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Accrued expenses
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57,500 | 69,500 | ||||||
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Advance from customer
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22,390 | - | ||||||
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Total adjustments
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82,336 | (17,690 | ) | |||||
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Net cash used in operating activities
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(17,121 | ) | (166,910 | ) | ||||
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Cash flows from investing activities:
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Acquisition of property and equipment
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- | (19,687 | ) | |||||
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Investment deposit
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- | 30,773 | ||||||
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Net cash provided by investing activities
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- | 11,086 | ||||||
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Cash flows from financing activities:
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Loan from unrelated party
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- | 120,298 | ||||||
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Loans from officers
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12,915 | 36,448 | ||||||
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Net cash provided by financing activities
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12,915 | 156,746 | ||||||
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Effect of foreign currency translation on cash
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16 | 87 | ||||||
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Net increase (decrease) in cash and cash equivalents
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(4,190 | ) | 1,009 | |||||
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Cash and cash equivalents – beginning
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19,466 | 7,939 | ||||||
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Cash and cash equivalents – ending
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$ | 15,276 | $ | 8,948 | ||||
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Supplemental disclosure of cash flow information:
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Cash paid for interest
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$ | - | $ | - | ||||
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Cash paid for income tax
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$ | - | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
4
LANDMARK ENERGY ENTERPRISE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Landmark Energy Enterprise, Inc. (formerly Reflex, Inc.) (“Landmark”) was incorporated in Nevada on October 4, 2007. The accompanying consolidated financial statements include the financial statements of Landmark and its subsidiaries (collectively, the “Company”). The Company’s primary business is to research and develop hydrogen and oxygen generation technologies, design, manufacture and sell hydrogen and oxygen generating machines and the related industrial and commercial applications.
On September 15, 2010, Landmark entered into a share/ownership transfer agreement to acquire 30% ownership of Dalian Aquarius Energy Technology U.S.A. Co., Ltd (“Aquarius”). However, the Share/Ownership Transfer Agreement was never closed and the shares of Aquarius have not been transferred to the Company.
On October 20, 2011, the Company adopted a resolution to change the Company's fiscal year end from October 31 to January 31.
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.
On July 26, 2010, the Company initiated the process of forming a wholly owned subsidiary, Dalian Landmark Energy Technology Co, Ltd (“Dalian Landmark”) in Dalian, the People’s Republic of China; and its registration process was completed on February 1, 2012.
Note 2 – Summary of Significant Accounting Policies
Basis Of Presentation
The consolidated financial statements include the accounts of Landmark and its wholly-owned subsidiary. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. 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, the Company evaluated the period from April 30, 2012 through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. No such events were identified for this period.
Interim Financial Statements
These consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended January 31, 2012, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended January 31, 2012.
5
Note 3– Inventory
Inventory by major categories as of April 30, 2012 and January 31, 2012 is summarized as follows:
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April 30, 2012
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January 31, 2012
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Raw materials
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$ | 10,615 | $ | 9,167 | ||||
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Supplies
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8,865 | 8,865 | ||||||
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Total Inventory
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$ | 19,480 | $ | 18,032 | ||||
Note 4– Notes Receivable
The note receivable balance was $177,603 as of April 30, 2012 and January 31, 2012, respectively. On October 12, 2010, Landmark loaned $174,075 to Aquarius. The loan is unsecured, bears 1% interest and is payable on demand. On December 15, 2010, Landmark loaned $3,528 to a third party entity. The loan is unsecured, non-interest bearing and is payable on demand.
Note 5 – Property and Equipment
Property and equipment as of April 30, 2012 and January 31, 2012 consisted of the following:
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April 30, 2012
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January 31, 2012
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Electronic equipment
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$ | 7,079 | $ | 5,782 | ||||
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Machinery and equipment
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12,069 | 13,565 | ||||||
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Vehicles
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19,791 | 19,791 | ||||||
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Subtotal
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38,939 | 39,138 | ||||||
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Less: accumulated depreciation
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8,417 | 6,112 | ||||||
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Total
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$ | 30,522 | $ | 33,026 | ||||
Depreciation expense for the three months ended April 30, 2012 and 2011 was $2,301 and $226, respectively.
Note 6 – Accrued Expenses
Accrued expenses as of April 30, 2012 and January 31, 2012 consisted of the following:
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April 30, 2012
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January 31, 2012
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Accrued wages
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$ | 648,585 | $ | 588,585 | ||||
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Accrued rent
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60,000 | 52,500 | ||||||
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Accrued accounting and audit fee
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94,512 | 104,512 | ||||||
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Total accrued expenses
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$ | 803,097 | $ | 745,597 | ||||
The carrying value of accrued expenses approximates their fair value due to the short-term nature of these obligations.
6
Note 7 – Due to Officers
The executive officers of the Company Tonghuai Wang, Di Zhang, Pik Hang Lew and Yidian Dong from time to time, provide non-interest bearing advances to the Company for working capital. As of April 30, 2012 and January 31, 2012, the Company owed an amount of $ 270,634 and $257,707, respectively, to the executive officers.
Note 8– Convertible Notes Payable to Stockholders
The Company received loans from seven stockholders until January 31, 2012. On February 10, 2012, the loans were assigned with the same terms to Tonghuai Wang, an executive officer of Dalian. The loans are due five years from the date the funds were received. The loans are non-interest bearing and can be converted to common stock at $1.00 per share at any time by the note holder. The loans are due between April and December 2015. The balance due on these convertible notes was $480,000 as of April 30, 2012 and January 31, 2012, respectively.
Note 9 – 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.
On April 19, 2010, the Company declared an 8:1 stock split which has been presented retroactively in the statement of changes in stockholders’ deficit and the 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 April 30, 2012.
Note 10 – Commitments and Contingencies
The corporate office lease requires rent of $2,500 per month for the lease term through April 30, 2012 and month to month thereafter. The lease did not require a security deposit. Accrued rent for the office lease was $60,000 and $52,500 as of April 30, 2012 and January 31, 2012, respectively.
The Company also entered into three employment agreements on January 1, 2010. The agreements call for total monthly wages of $28,000 beginning February 1, 2010. On March 31, 2011, one employment agreement terminated and the monthly wages decreased to $20,000. The minimum monthly wages due on these agreements for the year ending January 31, 2013 was $22,500.
The balance outstanding for the above contracts was $708,585 and $641,085 as of April 30, 2012 and January 31, 2012, respectively.
Note 11 – Liquidity and Going Concern
The Company has negative working capital, and has incurred losses since inception. These factors create a 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 the Company 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 the required and ongoing operations; however, there can be no assurance that the Company will be successful in these efforts.
7
Note 12 – Income Taxes
As of April 30, 2012, the Company had net operating loss carry forwards of approximately $1,394,872 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is not likely to occur.
Note 13– Risk Factors
The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Note 14 – Loss Per Share
The Company presents loss per share on a basic and diluted basis. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss by the weighted average number of shares outstanding plus the dilutive effect of potential securities.
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For the Three months Ended
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April 30
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2012
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2011
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Net loss
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$ | (99,457 | ) | $ | (149,220 | ) | ||
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Weighted average common shares
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17,200,000 | 17,200,000 | ||||||
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(denominator for basic loss per share)
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Effect of dilutive securities:
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Weighted average common shares
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17,200,000 | 17,200,000 | ||||||
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(denominator for diluted loss per share)
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Basic loss per share
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$ | (0.01 | ) | $ | (0.01 | ) | ||
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Diluted loss per share
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$ | (0.01 | ) | $ | (0.01 | ) | ||
8
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.
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 September 15, 2010, we, along with 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. 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 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.
9
On September 15, 2010, 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.
Critical Accounting Policies and Estimates
Change in Fiscal Year End
On October 20, 2011, Company changed its fiscal year end from October 31 to January 31.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). Company’s fiscal year end was October 31 through the fiscal year ended October 31, 2010 and on October 20, 2011, the Company has adopted a January 31 fiscal year end.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary (Dalian Landmark Energy Technology Co.). All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
10
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, interest receivable, accrued expenses and amounts due to an officer. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Recent Accounting Pronouncements
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
11
Results of Operations for the Three Months Ended April 30, 2012 and 2011
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For the Three Months Ended
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||||||||
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April 30,
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||||||||
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2012
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2011
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|||||||
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Sales
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$ | - | $ | - | ||||
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Cost of sales
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- | - | ||||||
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Gross profit
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- | - | ||||||
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Total operating expenses
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99,457 | 149,220 | ||||||
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Loss from operations
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(99,457 | ) | (149,220 | ) | ||||
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Provision for income taxes
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- | - | ||||||
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Net loss
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(99,457 | ) | (149,220 | ) | ||||
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Other comprehensive loss
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(44 | ) | - | |||||
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Comprehensive loss
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$ | (97,980 | ) | $ | (149,220 | ) | ||
Sales:
Our sales for the three months ended April 30, 2012 and April 30, 2011 were $0.
Gross Profit:
As a result of the foregoing, we did not generate any gross profit for the three months ended April 30, 2012 and April 30, 2011.
Operating Expenses:
Operating expenses, including selling expenses, and general and administrative expenses, were $99,457 for the three months ended April 30, 2012 as compared to $149,220 for the three months ended April 30, 2011. The decrease of these major expenses was mainly due to decrease of the total salary.
Income Taxes:
We did not incur any income taxes for the three months ended April 30, 2012 and April 30, 2011.
Net Loss:
Net Loss for the three months ended April 30, 2012 was $99,501, a decrease compared with $ 149,220 of the three months ended April 30, 2011. This decrease in net loss was the result of the decrease of major expenses.
Comprehensive loss:
The comprehensive loss, which adds the currency adjustment to net loss, was $97,980 for the three months ended April 30, 2012 as compared with $149,220 for the three months ended April 30, 2011. The decrease of comprehensive loss was mainly due to the decrease of major expenses.
12
Liquidity and Capital Resources
As of April 30, 2012, we had cash and cash equivalents of $15,276. Our current assets were $234,216 and our current liabilities were $1,120,029 as of April 30, 2012. Total stock holders’ deficit as of April 30, 2012 was $1,335,291.
The following table sets forth a summary of our cash flows for the periods indicated:
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For the Three Months Ended
April 30,
|
||||||||
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2012
|
2011
|
|||||||
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Net cash used in operating activities
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17,121 | 166,910 | ||||||
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Net cash provided by investing activities
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- | 11,086 | ||||||
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Net cash provided by financing activities
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12,915 | 156,746 | ||||||
Net cash used in operating activities was $17,121 for the three months ended April 30, 2012, a significant decrease from $166,910 for the three months ended April 30, 2011. Net cash provided by investing activities was $-0- for the three months ended April 30, 2012, which was an decrease from net cash used in investing activities was $11,086 for the three months ended April 30, 2011. Net cash provided by financing activities amounted to $12,915 for the three months ended April 30, 2012, compared to net cash provided by financing activities of $156,746 for the three months ended April 30, 2011.
Off Balance Sheet Arrangements
As of April 30, 2012, there were no off balance sheet arrangements.
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.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of April 30, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of April 30, 2012, the Company’s internal control over financial reporting was not effective because we mistakenly failed to include a management’s report on internal control over financial reporting in the Form 10-K for year ended October 31, 2010 and an effective internal control would have detected the omission of such material information.
The management has also determined that our internal control over financial reporting was subject to the material weaknesses of inadequate staffing and supervision within the accounting operations of our company: the relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.
The Company’s management has identified the steps necessary to address the material weaknesses existing in the period ended April 30, 2012 described above, as follows:
1. Hiring additional accounting and operations personnel and engaging outside contractors with technical accounting expertise, as needed, and reorganizing the accounting and finance department to ensure that accounting personnel with adequate experience, skills and knowledge relating to complex, non-routine transactions are directly involved in the review and accounting evaluation of our complex, non-routine transactions;
2. Involving both internal accounting and operations personnel and outside contractors with technical accounting expertise, as needed, early in the evaluation of a complex, non-routine transaction to obtain additional guidance as to the application of generally accepted accounting principles to such a proposed transaction.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
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 April 30, 2012. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. We mistakenly failed to include a management’s report on internal control over financial reporting in the Form 10-K for year ended October 31, 2010 and an effective disclosure control would have detected the omission of such material information. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of April 30, 2012, our disclosure controls and procedures were not effective.
Changes in Internal Controls
We have also evaluated our internal controls for financial reporting, and there have been no change in our internal control over financial reporting that occurred during the period ended April 30, 2012 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
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.
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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.
PART II – OTHER INFORMATION
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.
A smaller reporting company is not required to provide the information required by this Item.
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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None
No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended April 30, 2012.
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
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Exhibit No.
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Description
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3.1
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Articles of Incorporation (1)
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3.2
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Bylaws (1)
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10.1
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Affiliate Stock Purchase Agreement (2)
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10.2
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Share / Ownership Transfer Agreement (3)
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10.3
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Agreement of Rescission (4)
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10.4
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Patent and Assets Transfer Agreement (3)
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10.5
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License and Manufacture Agreement (3)
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31.1
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Section 302 Certificate of Chief Executive Officer
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31.2
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Section 302 Certificate of Chief Financial Officer
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32.1
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Section 906 Certificate of Chief Executive Officer
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32.2
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Section 906 Certificate of Chief Financial Officer
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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
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By:
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/s/Yidian Dong
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Yidian Dong
Chief Executive Officer
Director
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June 20, 2012
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