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EX-31.2 - CERTIFICATION - Elite Energies, Inc.f10k2012ex31ii_elite.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
 

 
FORM 10-K
 

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

For the fiscal year ended March 31, 2012
 
or

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 number)
 
(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)
 
 
Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act.    Yes  ¨    No  x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Exchange Act Rule 12b-2).

Large accelerated filer  ¨      Accelerated filer  ¨       Non-accelerated filer  ¨      Smaller reporting company  x

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

As of the last business day of the registrant’s most recently completed second fiscal quarter, there was no active public trading market for our common stock.

As of June 27, 2012, the registrant had 30,340,955 shares of its common stock issued and outstanding.

Documents Incorporated by Reference: None.
 
 
 

 
 
TABLE OF CONTENTS
 
     PAGE
PART I
   
ITEM 1.
Business
  2
ITEM 1A.
Risk Factors
  3
ITEM 2.
Properties
  6
ITEM 3.
Legal Proceedings
  6
ITEM 4.
Mine Safety Disclosures
  6
 
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
  6
ITEM 6.
Selected Financial Data
  7
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  7
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
  10
ITEM 8.
Financial Statements and Supplementary Data
  10
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  11
ITEM 9A.
Controls and Procedures
  11

PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
  12
ITEM 11.
Executive Compensation
  15
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  16
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
  17
ITEM 14.
Principal Accounting Fees and Services
  18

PART IV
ITEM 15.
Exhibits, Financial Statement Schedules
  19
SIGNATURES
    20
 
 
 

 

FORWARD LOOKING STATEMENTS
 
This annual report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

 
the uncertainty of profitability based upon our history of losses;
 
risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern;
 
risks related to our international operations and any currency exchange fluctuations; and
 
other risks and uncertainties related to our business plan and business strategy.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. 

References in this annual report to “we”, “us”, “our”, the “Company” refer to Elite Energies, Inc., unless otherwise indicated.

References to China or the PRC refer to the People’s Republic of China.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common stock” refer to the common shares in our capital stock.

 
1

 

PART I

ITEM 1.   BUSINESS

Business Overview
 
We were originally formed on March 28, 2008 under the name “Global ePlatform Technologies Inc.” We had no operations after inception and in December 2008, our corporate name was changed to Elite Energies, Inc. to reflect our business operations as described below.
 
We have developed two types of businesses, one is energy saving related products and the other one is green building material retail and wholesale distribution. The energy saving operation is investing in efficient energy, such as light-emitting diodes (LED) lights. The other one is distributing environmentally friendly building materials.
Due to the energy crises and the concern on environmental impact by the general public, we aim to capture these opportunities of the growing business segments presented. We are the holding company and have incorporated a wholly owned California subsidiary corporation, Elite Renewable Energies Technology, Inc. (“ERET”) as the operating arm. Both the Company and ERET are located and operated out of Sunnyvale, California, USA.

In August 2009, ERET has invested in Quality Green Building Supplies, Inc. (“QGBS”), a California Corporation. QGBS was established on July 2009, and is operating as a green building materials wholesaler in the San Francisco Bay Area.  ERET paid $330,000 to acquire 50.52% of QGBS ownership.  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.
 
As a building material wholesaler, QGBS plans to source and discretely select the best manufacturers with high quality, reliable and price sensible products. With the help of our technical advisors and merchandisers, we may enhance the users interface or even certain technical aspects of our product lines to accommodate each targeted market and ultimately develop products with our own brand name.
 
The equity ownership of QGBS is an integral part of ERET’s marketing strategy designed to congregate small to medium sized distributors in the sales channel and general construction fields across the United States in order to form a larger distribution network program, called “Elite Energies Distributors” (“EED”). This EED Program will provide product information, marketing and sales materials to distributors to exploit and make a way into their local markets and in turn help ERET quickly penetrate into the United States market.
 
On June 7, 2011, the Company established a wholly-owned Hong Kong subsidiary, Elite Energies International Limited (“EEIL”), to operate and manage all the Company’s potential business activities in Hong Kong and China market. The HK operation is going to prepare to work with strategic partners that will be beneficial to the Company.

Market Opportunities

The economy in 2011 was not encouraging, petroleum is hovering around $95 per barrel in June 2012, and it is anticipated that the price will not slip back at the near future.   

The impact has slowed down our business overall, however, we are looking for other opportunities in the high tech and industry gas business in China.

 
2

 
 
Competition
 
We bundle our own unique building products and LED as a package to better fit our own distribution channels as well as to distinguish ourselves from competitors. There are many small to medium size hardware stores in the market place and major nationwide building materials chain stores, such as Home Depot, Price Club, Lowe, Orchard, Sears, Target and many others that are selling similar products and services.  Our advantage is direct import from overseas manufacturers without any middleman or agency fees.
 
Employees
 
As of the date hereof, together with QGBS, we have eight employees.
 
Legal Proceedings
 
In the normal course of our business, we may periodically be subject to various lawsuits. However, there is currently no legal action pending against the Company, nor, to our knowledge, any such proceedings contemplated.
 
ITEM 1A.   RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this annual report before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Please note that throughout this annual report, the words “we”, “our”, “us”, or “Elite Energies” refer to the Company and its subsidiaries.
 
Risks Related to Our Business
 
WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.
 
We were incorporated in Delaware on March 28, 2008. We have no significant financial resources and limited revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities
 
WE HAVE LIMITED OPERATING HISTORY AND FACE MANY OF THE RISKS AND DIFFICULTIES FREQUENTLY ENCOUNTERED IN NEW AND RAPIDLY EVOLVING MARKET.
 
We have limited operating history.  We are facing many of the risks and difficulties encountered in rapidly evolving markets.  These risks include the ability to:
 
                       Commercialize our products;
                       Increase awareness of our brand names;
                       Strengthen customer loyalty;
                       Maintain current strategic relationships, and develop new strategic relationships;
                       Respond effectively to competitive pressures;
                       Continue to develop and upgrade technology; and
                       Attract, retain and motivate qualified personnel.
 
 
3

 
 
WE CURRENTLY DO NOT HAVE CONTRACT WITH ANY OF OUR SUPPLIERS AND CUSTOMERS. ALTHOUGH WE MAINTAIN A GOOD RELATIONSHIP WITH THEM, THERE IS NO ASSURANCE THAT OUR SUPPLIERS WILL CONTINUE TO PROVIDE US THE PRODUCTS OR THE CUSTOMERS WILL CONTINUE TO PURCHASE GOODS FROM US, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR OPERATIONS AND REVENUES.

The Company purchased approximately 84% of goods from one major vendor, Xiangxing Science & Trade Co., Ltd. for the year ended March 31, 2012 and purchased approximately 92% of goods from two major vendors, Jiangmen Pioneer Import & Export Co., Ltd. and Art Make Co., Ltd., for the year ended March 31, 2011. The Company has three customers, Whole Wood, Kingway Construction Supply, Inc. and Sincere Hardware Supply accounting for approximately 43% of the sales for the year ended March 31, 2012. The Company also has three customers Sincere Hardware Supply, Kingway Cabinet Outlet Inc. and Kingway Construction Supply Inc, which account for approximately 61% of the Company’s trade accounts receivable as of March 31, 2012. The Company also has five customers, Best Forest Products, Inc., CBS Building Supply Inc., Kingway Cabinet Outlet Inc., Kingway Construction Supply Inc. and Sincere Hardware Supply, which account for approximately 72% of the Company’s trade accounts receivable as of March 31, 2011. Although we maintain a good relationship with them, there is no assurance that the vendors will continue to provide us products in the future or the customers will continue to purchase goods from us. If due to any reason that they decide to discontinue their relationship with us, it could materially adversely affect our operations and revenues.

OUR PRODUCTS ARE MANUFACTURED BY SUPPLIERS IN THE PRC AND CERTAIN POLITICAL, ECONOMIC AND SOCIAL FACTORS RELATING TO OPERATING IN THE PRC COULD ADVERSELY AFFECT OUR SUPPLIES AND BUSINESS OPERATIONS.
 
Our products are currently manufactured by suppliers in the PRC. The PRC is transitioning from a planned economy to a market economy. While the PRC government has pursued economic reforms since its adoption of the open-door policy in 1978, a large portion of the PRC economy is still operating under five-year plans and annual state plans. Through these plans and other economic measures, such as control on foreign exchange, taxation and restrictions on foreign participation in the domestic market of various industries, the PRC government exerts considerable direct and indirect influence on the economy. Many of the economic reforms carried out by the PRC government are unprecedented or experimental, and are expected to be refined and improved. Other political, economic and social factors can also lead to further readjustment of such reforms. This refining and readjustment process may not necessarily have a positive effect on the operations or future business development of our PRC suppliers. Our PRC suppliers’ operating results may be adversely affected by changes in the PRC’s economic and social conditions as well as by changes in the policies of the PRC government, such as changes in laws and regulations (or the official interpretation thereof), measures which may be introduced to control inflation, changes in the interest rate or method of taxation, and the imposition of restrictions on currency conversion in addition to those described below, which in turn, may adversely affect the supplies of our products and therefore our business operations.
 
WE DEPEND ON OUR KEY MANAGEMENT PERSONNEL AND THE LOSS OF THEIR SERVICES COULD ADVERSELY AFFECT OUR BUSINESS.
 
We consider our current directors and officers to be essential to the success of the business. None of these individuals are currently subject to a written employment agreement and we do not maintain key life insurance on them.  Although they have not indicated any intention of leaving us, the loss of any one of these individuals for any reason could have a very negative impact on our ability to fulfill our business plan as each officer has specific product and industry knowledge that would be difficult to replicate.
 
THE CONTINUED DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS WILL REQUIRE A COMMITMENT OF SUBSTANTIAL FUNDS.
 
Our capital requirements will depend on many factors, including but not limited to, the costs and timing of our development and launch activities, the success of our development efforts, the costs and timing of the expansion of our sales and marketing activities. The extent to which our existing and new products will gain market acceptance will be based upon our ability to maintain existing collaborative relationships and enter into new collaborative relationships, competing product developments. Progress of our commercialization efforts and the commercialization efforts of our competitors, costs involved in acquiring, prosecuting, maintaining, enforcing and defending intellectual property claims, developments related to regulatory issues, and other factors.  We estimate that it will require a substantial investment to launch additional products with significant marketing efforts in our target market and to implement our business plan.
 
 
4

 
 
WE DEPEND ON A MAJOR SUPPLIER, THE LOSS OF WHICH COULD MATERIALLY ADVERSELY AFFECT OUR OPERATIONS AND REVENUES.
 
We depend on one major supplier, Xiangxing Science & Trade Co., Ltd., which provided approximately 84% of our goods for the year ended March 31, 2012.  Our reliance on this supplier involves several risks, including a potential inability to obtain an adequate supply of goods and an increase in price if we are unable to negotiate favorable pricing terms with new suppliers. Therefore, if we are unable to maintain a relationship with the vendor for any reason, such loss would have a material adverse effect on our business, financial condition and results of operations.
 
WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.
 
We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.  We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.  In addition, we may not be able to absorb these costs of being a public company which will negatively affect our business operations.
 
OUR OFFICERS AND DIRECTORS BENEFICIALLY OWN A SIGNIFICANT AMOUNT OF THE OUTSTANDING COMMON STOCK AS OF THE DATE OF THIS FILING AND COULD TAKE ACTIONS DETRIMENTAL TO YOUR INVESTMENT FOR WHICH YOU WOULD HAVE NO REMEDY.
 
Our officers and directors beneficially own approximately 67.38% of the outstanding common stock as of the date of this filing. They will continue to have the ability to substantially influence the management, policies, and business operations. In addition, the rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future.
 
WE MAY NEVER ISSUE DIVIDENDS.
 
We did not declare any dividends for the years ended March 31, 2012 and 2011. Our Board of Directors does not intend to distribute dividends in the near future.  The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant.  There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.
 
FUTURE ACQUISITIONS MAY HAVE AN ADVERSE EFFECT ON OUR ABILITY TO MANAGE OUR BUSINESS.
 
If we are presented with appropriate opportunities, we may acquire complementary technologies companies.  Future acquisitions would expose us to potential risks, including risks associated with the assimilation of new technologies and personnel, unforeseen or hidden liabilities, the diversion of management attention and resources from our existing business and the inability to generate sufficient revenues to offset the costs and expenses of acquisitions.  Any difficulties encountered in the acquisition and integration process may have an adverse effect on our ability to manage our business.
 
 
5

 
 
Risks Related to Our Common Stock
 
OUR COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
 
If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

ITEM 2.   PROPERTIES

Our business office is located at 848 Stewart Dr., Suite 101, Sunnyvale, California, 94085. The office is about 250 square feet and we pay rent of $100 per month to occupy this location. QGBS, one of our subsidiaries, leased an office and warehouse in San Leandro, California for its green building materials operation. The warehouse is about 23,500 square feet and is located at 2756 Alvarado St, Unit E and F, San Leandro, Alameda, California 94577. The monthly rent for the warehouse is $7,479 and the lease will expire on October 31, 2012. We will work to renew the lease in favorable terms before the current lease expires. We have no other properties and at this time have no intention to acquire any properties.

ITEM 3.   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 4.   MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
Our common stock is quoted on the OTCQB under the symbol “EENR”. The OTCQB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The OTCQB is the venture market place for companies that are current in their reporting with a U.S. regulator. There are no financial or qualitative standards to be quoted on the OTCQB.
 
There is presently limited public trading of our shares of common stock on the OTCQB. We can provide no assurance that our shares of common stock will be traded actively on the OTCQB.
 
Holders of Our Common Stock
 
As of the date of this report, in accordance with our transfer agent records, we had 55 shareholders holding 30,340,955 shares of our common stock.
 
Stock Option Grants
 
To date, we have not granted any stock options.
 
 
6

 
 
Dividends
 
Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
 
Transfer Agent and Registrar
 
Globex Transfer, LLC is currently the transfer agent for our common stock. Its address is 780 Deltona Blvd., Suite 202, Deltona, FL 32725. Its phone number is (813) 344-4490.
 
Securities Authorized for Issuance Under Equity Compensation Plans

We presently do not have any equity based or other long-term incentive programs. In the future, we may adopt and establish an equity-based or other long-term incentive plan if it is in the best interest of the Company and our stockholders to do so.

ITEM 6.   SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to provide disclosure pursuant to this item.

ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section of this Form 10-K includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
 
Business Overview
 
Elite Energies, Inc. is the holding company and has incorporated a wholly owned California subsidiary corporation, Elite Renewable Energies Technology, Inc. (“ERET”) as the operating subsidiary. We are a Delaware corporation investing in energy saving related products such as LED lighting and environmentally friendly building materials.

ERET, through its subsidiaries, focuses on conducting a broad base of activities and products such as selling exterior lighting systems which can increase efficient energy uses with decreased energy consumption, such as, selling solar LEDs for outdoor lightings. On the green building material, we are targeting builders and general contractors as our customers. However, at the beginning of 2012, we have remodeled a portion of our warehouse to become a showroom, and expect to also attract retail customers.

Plan of Operation

Over the next fiscal year we intend to do the following:

We are still working on the trade mark approval, since there are quite a few brand names using “Elite” as their trade mark. We may have to change the details of our application in order to get the approval. Once the trademark is issued, we will be able to add the brand name on our quality products and it will differentiate and promote our products in the market.

 
7

 
 
We are exploring the opportunity in variety of industrial gas resale in PRC. Our HK subsidiary, EEIL  is expecting to sign a letter of intent (“LOI”) with ChenZhou XuHui QiTi (an industry gas manufacturing company located in Chen Zhou, Hunan), for using XuHui’s brand name to operate gas trading in Hunan Province. This will be our major business objective for our on-going operation.
 
We will hire consultants and an appropriate appraiser to study the industrial gas industry business in PRC and evaluate ChenZhou XuHui QiTi’s value. Based on the result of the study and appraisal reports, the Board will evaluate and vote for acquisition of XuHui.  Since our Chairwoman Mrs. Liu has years of experience in the industrial gas business, she can greatly assist us in exploring potential opportunity in this industry.

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

Elite is also exploring at other high tech company in China for potential business opportunity.

Result of Operations

We believe the percentage relationship between Revenues and major categories in the Consolidated Statements of Operations presented below are important in evaluating the performance of our business operations.
 
     
% of Revenues
 
     
2012
     
2011
 
     
 
     
 
 
Revenues-
               
    Trade, net of returns
   
93.4
%
   
89.8
%
    Related parties
   
6.6
     
10.2
 
     
100.0
     
100.0
 
                 
Cost of Revenue
   
89.2
     
77.3
 
   Gross profit
   
10.8
     
22.7
 
                 
Operating expenses
               
Payroll expenses
   
19.1
     
14.8
 
General and administrative
   
6.8
     
11.0
 
Rent and utilities
   
9.8
     
8.8
 
Legal and professional fees
   
11.1
     
13.1
 
  Total operating expenses
   
46.8
     
47.7
 
                 
Other income/(expenses)
               
Interest income
   
0.0
     
0.0
 
Interest under capital leases
   
(0.1)
     
(0.1)
 
Note interest
   
(0.9)
     
(0.8)
 
  Total other income/(expenses)
   
(1.0)
     
(0.9)
 
                 
Loss before income taxes
   
(37.0)
     
(25.9)
 
                 
Provision for income taxes
   
                 -
     
                 -
 
                 
Net loss
   
(37.0)
     
(25.9)
 
Less: Net loss attributable to noncontrolling interest
   
(10.5)
     
(5.4)
 
Net loss attributable to Elite Energies, Inc.
   
(26.4)
%
   
(20.5)
%
 
Note: Certain percentages may not sum to totals due to rounding.
 
For an understanding of the significant factors that influenced our performance during the past two years, the following discussion should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements presented in this report.
 
 
8

 
 
Revenue: Our revenue was mainly generated from the sales of environmentally friendly building materials, primarily hardwood floors, to the customers through our 50.52% owned subsidiary QGBS. For the year ended March 31, 2012, we generated $969,494 in revenue, representing a decrease of $109,410, or 10.1%, compared to the revenue of $1,078,904 during the year ended on March 31, 2011. 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 $864,533 for the year ended March 31, 2012, compared to $834,426 for the year ended March 31, 2011, representing an increase of $30,107 or 3.6%. The increase of cost of revenue is primarily due to the provision for inventory obsolescence of $70,437 recorded and higher purchase costs during the year ended March 31, 2012 as compared to the year ended March 31, 2011.

Payroll expenses: The payroll expenses were $184,768 for the year ended March 31, 2012 and $159,262 for the year ended March 31, 2011, representing an increase of $25,506, or 16.0%. The increase was primarily due to the hiring of one new employee to perform our daily operations. During the year ended March 31, 2012, together with QGBS, we have 8 employees.

General and Administrative Expenses: General and administrative expenses include depreciation, licenses, advertising, travel and state franchise taxes. Our general and administrative expenses were $66,183 for the year ended March 31, 2012, compared to $118,731 in the year ended March 31, 2011, representing a decrease of $52,548, or 44.3%, which was primarily due to lower expenses relating to the public offering for the year ended March 31, 2012 as compared to the year ended March 31, 2011.

Rent and utilities: Rent and utilities were $95,196 for the year ended March 31, 2012, compared to $94,615 in the year ended March 31, 2011, representing an increase of $581, or 0.6%. Currently we lease 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: Legal and professional fees were $107,668 for the year ended March 31, 2012 and $141,608 for the year ended March 31, 2011, representing a decrease of $33,940, or 24.0%. The decrease was primarily attributable to lower accounting fees and legal fees relating to the public offering for year ended March 31, 2012 as compared to the year ended March 31, 2011.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have incurred recurring losses and have an accumulated deficit of $556,674 through March 31, 2012. We have financed our operations primarily through the sale of common stocks and proceeds from shareholders’ loans to subsidiary. As of March 31, 2012, the Company’s current assets were $460,545 and current liabilities were $246,684, and total cash was $34,793.
 
   
Year Ended
March 31, 2012
   
Year Ended
March 31, 2011
 
Net cash used in operating activities
 
$
(239,715
)
 
$
(284,059
)
Net cash used in investing activities
   
(11,944
)
   
(15,908
)
Net cash provided by financing activities
   
243,801
     
199,502
 
Net (decrease) in cash
   
(7,858
 )
   
(100,465
 )
Cash, Beginning of Year
   
42,651
     
143,116
 
Cash, Ending of Year
 
$
34,793
   
$
42,651
 

The Company had cash used in operating activities for the year ended March 31, 2012 of $239,715 and cash used in operating activities equal to $284,059 for the year ended March 31, 2011. The decrease was primarily a result of the decrease in inventory levels.

The Company had net cash used in investing activities of $11,944 and $15,908 for the year ended March 31, 2012 and 2011, respectively.  The decrease was primarily due to less capital expenditure.

 
9

 
 
The Company had net cash provided by financing activities of $243,801 and $199,502 for the year ended March 31, 2012 and 2011, respectively. The increase was primarily due to the proceeds from issuance of common stock in April 2011.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. We will continue to monitor our expenditures and cash flow position by reducing operating costs, improving operating profitability, controlling inventory levels, working with vendors and other creditors to accept more favorable payment terms, and through seeking additional financing funding. On June 13, 2012, the Board unanimously approved the issuance of shares to its Directors in order to raise funds for the Company’s operations. However, 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

As reflected in the accompanying consolidated financial statements, the Company had a net loss of $256,353, used $239,715 of cash in operating activities during the year ended March 31, 2012, and has an accumulated deficit of $556,674 at March 31, 2012.  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 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.

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 our 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 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 consolidated financial statements included in this annual 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 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable because we are a smaller reporting company.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 
10

 
 
ELITE ENERGIES, INC.

INDEX TO

CONSOLIDATED FINANCIAL STATEMENTS

 (Stated in US dollars)
 
CONTENTS
 
PAGES
     
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
F-2
     
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2012 AND 2011
 
F-3
     
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
F-4
     
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
F-5
     
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
F-6
     
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2012 AND 2011
 
F-7 – F-14
 
 
F-1

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and
Stockholders of Elite Energies, Inc.
& Subsidiaries:

We have audited the accompanying consolidated balance sheets of Elite Energies, Inc. & Subsidiaries as of March 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended.  These consolidated financial statements are the responsibility of Elite Energies, Inc. & Subsidiaries’ management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Elite Energies, Inc. & Subsidiaries as of March 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the entity will continue as a going concern.  As discussed in Note 12 to the consolidated financial statements, the entity has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 12.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
/s/ Mah & Associates, LLP
 
San Francisco, California
June 29, 2012
 
 
F-2

 

ELITE ENERGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2012 AND MARCH 31, 2011
   
             
   
2012
   
2011
 
ASSETS
           
Current Assets
 
 
       
  Cash
  $ 34,793     $ 42,651  
  Trade receivables -
               
      Others, net
    57,843       52,431  
      Related parties
    6,441       15,682  
  Inventory, net
    360,660       543,513  
  Prepaid expenses
    808       7,493  
  Total Currents Assets
    460,545       661,770  
  Deposit
    51,809       26,809  
  Property and Equipment, net
    37,752       37,534  
  Total Assets
  $ 550,106     $ 726,113  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
         
                 
Current Liabilities
               
  Trade payables -
               
      Others
  $ 78,756     $ 126,892  
      Related parties
    31,730       26,123  
  Accrued expenses -
               
      Related parties
    -       10,380  
      Interest
    3,196       5,842  
      Others
    4,611       10,358  
  Obligations under capital leases  - current
    3,391       6,200  
  Directors' loans
    35,000       35,000  
  Loan from unrelated party
    10,000       10,000  
  Stockholder loans to subsidiaries
    80,000       70,000  
  Total Current Liabilities
    246,684       300,795  
  Obligations under capital leases  - noncurrent
    -       3,391  
 Total Liabilities
    246,684       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 March 31, 2012 and March 31, 2011, respectively
    30       26  
  Additional paid-in-capital
    730,427       490,431  
  Accumulated deficit
    (556,674 )     (300,321 )
       Total Elite's Stockholders' Equity
    173,783       190,136  
  Noncontrolling Interest
    129,639       231,791  
Total Stockholders' Equity
    303,422       421,927  
Total Liabilities and Stockholders' Equity
  $ 550,106     $ 726,113  
                 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-3

 
 
ELITE ENERGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
   
 
       
   
Years ended March 31,
 
   
2012
   
2011
 
   
 
   
 
 
Revenues-
           
Trade, net of returns
  $ 905,214     $ 968,414  
Related parties
    64,280       110,490  
      969,494       1,078,904  
                 
Cost of Revenue
    864,533       834,426  
Gross profit
    104,961       244,478  
                 
Operating expenses
               
Payroll expenses
    184,768       159,262  
General and administrative
    66,183       118,731  
Rent and utilities
    95,196       94,615  
Legal and professional fees
    107,668       141,608  
  Total operating expenses
    453,815       514,216  
                 
Other income/(expenses)
               
Interest income
    8       133  
Interest under capital leases
    (822 )     (1,524 )
Note interest
    (8,837 )     (8,242 )
  Total other income/(expenses)
    (9,651 )     (9,633 )
                 
Loss before income taxes
    (358,505 )     (279,371 )
                 
Provision for income taxes
    -       -  
                 
Net loss
    (358,505 )     (279,371 )
Less: Net loss attributable to noncontrolling interest
    (102,152 )     (58,255 )
Net loss attributable to Elite Energies, Inc.
  $ (256,353 )   $ (221,116 )
                 
Loss per Share - Basis and Diluted
  $ (0.01 )   $ (0.01 )
Weighted average number of common shares outstanding
               
during the period - Basis and Diluted
    30,024,015       26,340,955  
                 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
F-4

 
 
ELITE ENERGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
                                                 
                                 
Total Elite's
         
Total
 
   
Common Stock
   
Paid in
   
Subscription
   
Accumulated
   
Stockholders'
   
Noncontrolling
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Receivable
   
Deficit
   
Equity
   
Interest
   
Equity
 
                                                 
Balance, April 1, 2010
    26,340,955     $ 26     $ 490,431     $ (120,001 )   $ (79,205 )   $ 291,251     $ 200,046     $ 491,297  
                                                                 
Issurance of common stock to noncontrolling interest
    -       -       -       -       -       -       90,000       90,000  
                                                                 
Cash received for subscription receivable
    -       -       -       120,001       -       120,001       -       120,001  
                                                                 
Net Loss
    -       -       -       -       (221,116 )     (221,116 )     (58,255 )     (279,371 )
                                                                 
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
    -       -       -       -       (256,353 )     (256,353 )     (102,152 )     (358,505 )
                                                                 
Balance, March 31, 2012
    30,340,955     $ 30     $ 730,427       -     $ (556,674 )   $ 173,783     $ 129,639     $ 303,422  
                                                                 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-5

 
 
ELITE ENERGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2012 AND 2011
 
             
   
2012
   
2011
 
Cash Flows from Operating Activities:
           
  Net loss
  $ (358,505 )   $ (279,371 )
Adjustment to reconcile net loss to net cash used in operating activities:
               
  Depreciation
    11,726       13,735  
Provision for inventory obsolescence
    70,437       -  
Provision for doubtful accounts
    -       20,390  
Change in operating assets and liabilities:
               
(Increase)/Decrease in trade receivables
    3,829       (17,123 )
Decrease in other receivable
    -       500  
(Increase)/Decrease in inventories
    112,415       (233,180 )
Decrease in prepaid expenses and inventory in transit
    6,685       90,428  
  (Increase) in deposit
    (25,000 )     (15,000 )
Increase/(Decrease) in trade payables
    (42,529 )     118,337  
Increase/(Decrease) in accrued expenses
    (18,773 )     17,225  
Net Cash Used in Operating Activities
    (239,715 )     (284,059 )
                 
Net Cash Used in Investing Activities for purchase of property and equipment
    (11,944 )     (15,908 )
                 
Cash Flows from Financing Activities:
               
Proceeds from issuance of common stock
    240,000       -  
Proceeds from issuance of shares to noncontrolling interest
    -       90,000  
Proceeds from collection of subscription receivable
    -       120,001  
Proceeds from directors' loans
    -       35,000  
Proceeds from loans from unrelated party
    -       10,000  
Proceeds from stockholder loans to subsidiary
    30,000       -  
(Repayment) of stockholder loans to subsidiary
    (20,000 )     (50,000 )
(Payments) on capital lease obligations
    (6,199 )     (5,499 )
Net Cash Provided by Financing Activities
    243,801       199,502  
                 
Net (Decrease) in Cash
    (7,858 )     (100,465 )
                 
Cash, Beginning of Year
    42,651       143,116  
Cash, Ending of Year
  $ 34,793     $ 42,651  
                 
Supplemental cash flow information
               
Interest paid
  $ 12,305     $ 9,524  
Income taxes paid
  $ -     $ -  
                 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
F-6

 
 
ELITE ENERGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012 AND 2011

NOTE 1.     SUMMARY OF ORGANIZATION
 
Elite Energies, Inc. (“ELITE”, the “Company”) is a Delaware Corporation that 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 renewable energy technology and operates as a wholesale distributor of environmentally friendly building materials, products, such as hardwood floors, cabinets and sinks, 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 in and operates a subsidiary, Quality Green Building Supplies, Inc. (“QGBS”), a wholesale distribution company that is incorporated in  California.  ERET 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. 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 consolidated financial statements have been prepared in accordance with accounting principles general accepted in the United States of America.  
 
Principles of Consolidation
 
The consolidated financial statements of the Company include wholly-owned and majority subsidiaries (ERET, EEIL and QGBS) under its control. All of the material intercompany balances and transactions have been eliminated.
 
Use of Estimates
 
The preparation of 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
 
F-7

 
 
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. The amounts of sales tax deducted from the gross sales.
 
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 deducted from the gross sales. During the years ended March 31, 2012 and 2011, the total amounts of return of defective products were insignificant.

Under some limited circumstances, the Company gives some customers sales discounts on their first-time purchase in order to expand the customer base. The amounts of sales discounts are determined at the time the sales occur and are stated in the sales agreements. These amounts are deducted from the gross sales and recorded on a net basis. During the years ended March 31, 2012 and 2011, the total amounts of sales discounts were insignificant.
 
Net Sales include services revenue generated through a variety of installation.  The total amount of service revenue during the years ended March 31, 2012 and 2011 were insignificant. 

Cost of revenue includes actual cost of merchandise sold and services performed and the cost of transportation of merchandise from vendors to the Company’s location. Costs of revenue are recognized when they occur and matched against revenue.

The cost of handling and shipping merchandise from the Company’s location to the customer is classified as operating expenses.  The cost of handling and shipping merchandise to customers during the years ended March 31, 2012 and 2011 were insignificant.
 
Advertising expenses
 
The Company expenses advertising costs as incurred. During the years ended March 31, 2012 and 2011, the total amounts of advertising expenses were insignificant.

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.
 
The Company did not record any allowance for doubtful accounts as of March 31, 2012, since most of the receivables at year-end were collected in the subsequent period. The Company recorded an allowance of $20,390 for doubtful accounts as of March 31, 2011 due to economic conditions of certain customers’ businesses. 
 
Inventory
 
Inventory consists of finished goods and is 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.

 
F-8

 
 
Management elected to sell slow moving inventory at below cost to attract prospective buyers. As a result, the Company recorded an allowance of $70,437 for obsolete inventory as of March 31, 2012. There was no provision recorded for the year ended March 31, 2011.

During the year ended March 31, 2012, the Company wrote off defective inventory totaling $36,747. The supplier agreed to reverse this amount due to them for these defective products.

Property and Equipment
 
Property and equipment are stated at cost and are depreciated over their estimated useful lives, which differ by asset category. 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
 
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 is estimated to be equal to 10% of the original cost, except for leasehold improvements.  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, accounts receivable, prepaid expenses, and accounts payable approximate fair value as of March 31, 2012 and 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.

 
F-9

 
 
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 March 31, 2012 and 2011 property and equipment is as follows:

   
2012
   
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
   
(31,738
)
   
(20,012)
 
Property and equipment, net
 
$
37,752
   
$
37,534
 

Depreciation expense for the years ended March 31, 2012 and 2011 was $11,726 and $13,735, respectively.

NOTE 4.     INCOME TAXES

There was no net current or deferred income tax provision for the years ended March 31, 2012 and 2011.
 
The Company’s deferred tax assets and liabilities as of March 31, 2012 and 2011 consist of the following:

   
2012
   
2011
 
Deferred income tax assets:
           
          Net operating loss carryforward
 
$
207,929
   
$
120,412
 
          Other
   
452
     
492
 
               Gross deferred income tax assets
   
208,381
     
120,904
 
                Valuation allowance
   
(201,755
)
   
(116,039
)
                Deferred income tax assets
 
$
6,626
   
$
4,865
 
Deferred income tax liabilities:
               
            Depreciation
 
$
(6,626
)
 
$
(4,865
)
                Deferred income tax liabilities
 
$
(6,626
)
 
$
(4,865
)
           Net deferred income tax assets
 
$
   
$
 
 
As of March 31, 2012 and 2011, the Company had a net operating loss carryforward of $524,172 and $304,584, respectively, which is available to offset future taxable income through March 31, 2032. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. 

   
2012
   
2011
 
Statutory Federal tax rate
   
(34.0)
%
   
(34.0
)%
State income taxes (net of Federal benefit)
   
(6.0)
%
   
(6.0
)%
Effect of valuation allowance
   
40
%
   
 40
  %
Effective tax rate
   
-
%
   
-
%

 
F-10

 
 
Management believes that the Company does not have any tax positions that will result in a material impact on the Company’s consolidated financial statements because of the adoption of ASC 740.  However, management’s conclusion may be subject to adjustment at a later date based on factors including additional implementation guidance from the Financial Accounting Standards Board and ongoing analyses of tax laws, regulations and related interpretations.

The Company and its subsidiaries file U.S. federal and state income tax returns. There are no on-going examinations of income tax returns filed by the Company and its subsidiaries. U.S. federal income tax returns ending March 31, 2009 and beyond are subject to examination by the Internal Revenue Service. State income tax returns ending March 31, 2008 and beyond are subject to examination by related state tax authorities.
 
NOTE 5.     LOANS

On September 1, 2009, Mr. Lin and Mr. Luo, two of the stockholders of QGBS, loaned QGBS $100,000 and $20,000, respectively, to support its operations and expansion. The terms of both loans totaling $120,000 are at an annual interest rate of 8% and due on demand.  In September 2010, QGBS paid $50,000 of the $100,000 principal balance to Mr. Lin plus $8,000 interest. In April, September and December 2011, QGBS paid back $2,000, $2,000 and $1,000, respectively, to Mr. Lin totaling $5,000 of interest payments. In January 2012, QGBS paid $20,000 of the remaining $50,000 principal balance to Mr. Lin.  In November 2011, QGBS paid $3,333 interest payment to Mr. Luo. In January 2012, Mr. Luo and Mr. Leung (another stockholder of QGBS), loaned $15,000 each to QGBS to support its operations. The terms of both loans totaling $30,000 are at an annual interest rate of 8% and due on demand.
 
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 a 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 a 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 terms.

The Company recorded $8,837 and $8,242 of interest expenses on the above loans during the years ended March 31, 2012 and 2011, respectively, which include accrued interest as follows:

   
2012
   
2011
 
Accrued interests
               
Stockholder loans in subsidiaries
 
$
2,233
   
$
4,867
 
Directors’ loans
   
788
     
792
 
Loan from unrelated parties
   
175
     
183
 
   
$
3,196
   
$
5,842
 
 
NOTE 6.     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 $52,353 as of March 31, 2012.

 
F-11

 
 
Rent expense was $88,364 and $89,432 during the years ended March 31, 2012 and 2011, respectively.

Capital Leases

QGBS leases a forklift under a capital lease. The following is the equipment recorded under capital lease at March 31, 2012 and 2011.

   
2012
   
2011
 
Forklift
 
$
17,800
   
$
17,800
 
Less accumulated depreciation
   
(12,887
)
   
(9,612)
 
   
$
4,913
   
$
8,188
 

As of March 31, 2012, the total future minimum lease payments under capital lease are $3,511, including $120 of interest payments. The capital lease will mature in September 2012.
 
NOTE 7.     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, as of March 31, 2012 and 2011, there were no diluted shares outstanding.

     
2012
     
2011
 
Numerator:
               
Net loss
 
$
(358,505
)
 
$
(279,371)
 
Less: Net loss allocated to noncontrolling interest
   
(102,152
)
   
(58,255)
 
Net loss attributable to the Company common stockholders—basic
 
$
(256,353
)
 
$
(221,116)
 
Denominator:
               
Weighted average common shares
   
30,024,015
     
26,340,955
 
Net loss attributable to the Company common stockholders per share—basic
 
$
(0.01
)
 
$
(0.01)
 
 
NOTE 8.     STOCKHOLDERS’ EQUITY

Common Stock

On March 28, 2008, the Company authorized 1,000,000,000 shares of common stock at par value of $0.000001. On March 24, 2010, the Company decreased its authorized common stock from the initially 1,000,000,000 shares to 50,000,000 shares. The holders of common stock are entitled to one vote per share. The Company has issued common stock to investors for cash.
 
During the year ended March 31, 2010, the Company issued 2,916,666 shares at $0.012 per share and 4,007,622 shares at $0.06 per share, for total cash proceeds of $155,456 and a $120,001 subscription receivable.
 
The Company collected the above stock subscription receivables of $110,001 in April 2010 and $10,000 in May 2010.

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

 
F-12

 
 
NOTE 9.     CONCENTRATIONS

The Company has three customers accounting for approximately 43% of the sales for the year ended March 31, 2012. The Company also has three customers, which account for approximately 61% of the accounts receivable at March 31, 2012. Further, the Company also has five customers, which account for approximately 72% of the accounts receivable at March 31, 2011.
 
The Company purchased approximately 84% of goods from one vendor for the year ended March 31, 2012, and purchased approximately 92% of goods from two vendors for the years ended March 31, 2011.  If the suppliers were to have operational problems or cease supplying the Company, operations would be adversely affected.
 
In addition, the Company’s products are currently manufactured by its suppliers in the People’s Republic of China (“PRC”). The Company’s business is subject to the risks generally associated with doing business abroad and the industry. Those risks may include, but are not limited to governmental regulations/inspections, weather conditions, disruptions or delays in shipments and changes in economic conditions.  The Company’s business is also subject to the risks generally associated with changes and economic conditions in which the Company’s business is concentrated. Currently, there are no PRC regulations in the lighting industry. We will have no control over future regulations made by governmental agencies.

NOTE 10.      RELATED PARTY TRANSACTIONS

The Company had purchases of $893 from and sales of $32, 577 to an entity that is wholly-owned by a shareholder of the Company during the year ended March 31, 2012 and had a receivable of $1,360 and payable of $23,823 as of March 31, 2012. The Company paid $720 to this same entity for leasehold improvements during the year ended March 31, 2012.  The Company had a payable of $23,736 and sales of $12,503 to this entity as of and during the year ended March 31, 2011.
 
The Company also had sales of $13,105 to an entity which is 95% owned by a director of the Company during the year ended March 31, 2012 and had a receivable of $3,628 as of March 31, 2012. The Company also had a receivable of $11,556 and sales of $51,658 to this entity as of and during the year ended March 31, 2011.
 
The Company had purchases of $55,657 from and sales of $5,446 to an entity that is wholly-owned by the wife of a director of the Company during the year ended March 31, 2012 and had a payable of $6,989 as of March 31, 2012. The Company had purchases of $19,852 from and sales of $38,847 to the same entity during the year ended March 31, 2011.

The Company had a payable of $500 to a firm wholly-owned by an officer of the Company for accounting services rendered and recorded $27,425 of professional service expenses during the year ended March 31, 2012.The Company had a payable of $2,115 and accrued expenses of $10,260 to the firm for accounting services rendered and recorded $25,470 of professional service expenses during the year ended March 31, 2011. The Company also had payables of $418 to another entity majority-owned by the same officer for professional services rendered and recorded $2,232 of professional service expenses related to compliance fillings during the year ended March 31, 2012. The Company also had a payable of $272 and accrued expenses of $120 to the same entity for professional services rendered and recorded $2,315 of professional service expenses related to compliance fillings during the year ended March 31, 2011.
 
The Company had sales of $13,152 to an entity wholly-owned by a director during the year ended March 31, 2012 and had a receivable of $1,454 as of March 31, 2012.  The Company paid this entity $5,680 for leasehold improvements during the year ended March 31, 2012. The Company had a receivable of $4,126 and sales of $7,482 to this entity as of and during the year ended March 31, 2011.  The Company paid $300 to this entity for marketing expenses during the year ended March 31, 2011.

The Company had purchases of $549 from an entity majority-owned by a director of the Company during the year ended March 31, 2012.

 
F-13

 
 
As discussed in Note 5, prior to March 31, 2010, QGBS entered into promissory notes agreements with two of its stockholders (Stockholder A and Stockholder B) totaling $120,000. Principal and/or interest payments were paid to these two stockholders totaling $28,333 and $58,000 during the years ended March 31, 2012 and 2011, respectively. In addition, QGBS entered into promissory notes agreements with Stockholder B and another of its stockholder (Stockholder C) totaling $30,000 in January 2012.

As discussed in Note 5, in December 2010, the Company entered into promissory note agreements with seven of its directors in the amount of $5,000 each, totaling $35,000. The Company paid $350 interest to each of these seven directors in December 2011. In December 2011, each of these loans from the seven directors was renewed to extend its maturity for one additional year from the original maturity date with the same terms. 

NOTE 11.     SIGNIFICANT AGREEMENTS
 
On October 12, 2010, QGBS signed a distributorship agreement with Apollo Solar Lighting & Pole LLC, an unrelated Oregon company (“Apollo”). Under the 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 12.     GOING CONCERN
 
As reflected in the accompanying consolidated financial statements, the Company had a net loss of $256,353, used $239,715 of cash in operating activities during the year ended March 31, 2012, and has an accumulated deficit of $556,674 at March 31, 2012.  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 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.
 
NOTE 13.     SUBSEQUENT EVENTS

On June 13, 2012, the Board unanimously approved the issuance of shares to its Directors in order to raise funds for the Company’s operations.
 
 
F-14

 
 
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.
 
ITEM 9A.   CONTROLS AND PROCEDURES
 
Evaluation of 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 Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), 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 CEO and CFO 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 CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. 
 
Management's Annual Report on Internal Control Over Financial Reporting
 
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  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 the Company’s internal control over financial reporting as of March 31, 2012.  The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of March 31, 2012, the Company’s internal control over financial reporting were fully effective for the purposes for which it is intended.
 
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission adopted as of September 21, 2010 that permit the Company to provide only management’s report in this annual report.
 
Changes in Internal Control over Financial Reporting
 
No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
11

 
PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Company in its early stage has limited funding to employ full-time senior management team. Thereby the Company has adopted the strategy of electing founders as board members to work together to execute the goals and objectives of the Company. As the Company matures, the Board would review and make the necessary changes.
 
The following table sets forth the name and age of officers and director as of the date hereof. Our executive officers are elected annually by our board of directors. Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.
 
Directors and Executive Officers
 
Name
Age
Position
Ai Huan Liu
54
Chairwoman of the Board of Directors
     
George Ma
60
Vice Chairman of the Board of Directors
     
Spencer Luo
47
President, Chief Executive Officer and Director
     
Stephen Wan
53
Chief Financial Officer, Treasurer and Director
     
Miles Xu
43
Secretary and Director
     
Chung Tung Lim
49
Vice President, Chief Operating Officer and Director
     
Lampo Joanna Cheung
45
Vice President of Marketing and Director
     
Tony Lee
43
Vice President of Products Development and Director
     
Justin Luo
52
Vice President of Technical Service and Director
     
Tony Jiang
58
Director
 
 
Set forth below is a brief description of the background and business experience of our executive officers and directors during the past five (5) years.

Ai Huan Liu, Age 54, Chairwoman of the Board of Directors

Mrs. Liu, has over thirty years in management and marketing industry in China. She was appointed as the Chairwoman of the Board of Directors of the Company In April 2011. Before joining the Company, Mrs. Liu was the Vice President of the Chinese Business Association of Hunan Province since 2009. From 2005 to 2009, she was the founder and owner of Huihuan Consulting, Inc., a U.S. company founded by Mrs. Liu after she immigrated to United States from China with her family. From 2004 to 2005, she was the Vice President of the Women’s Chamber of Commerce of Hunan Province. From 1990 to 2004, she was the Vice President of the Federation of Industry and Commerce of Hunan Province. Before that, Mrs. Liu worked as the President of Chenzhou XuHui QiTi Co., Ltd since 1988, the first acetylene manufacturing plant and the largest gas manufacturing plant in Hunan Province, China producing various gas products to customers throughout the major cities throughout the southern part of China, such as Guangzhou, Zhuhai, Shaoguan, and Shenzhen.  Mrs. Liu graduated from Hunan Arts and Crafts Vocational College in 1979 with a Bachelor degree. Mrs. Liu is committed to devote 20% of her time in the Company’s business. We believe with Mrs. Liu’s extensive experience in the energy industry and her strong business relationships with provincial authorities in China, will contribute exceptional value to the shareholders of Elite Energies.
 
 
12

 
 
George Ma, Age 60, Vice Chairman of the Board of Directors
 
Mr. Ma is one of our founders and has been the Chairman of our Board of Directors from 2008 to April 2011. He is a seasoned executive with many years of experience in creative marketing.  His career path started from film and television productions to working at a mass media advertising agency in Hong Kong. After immigrating to the United States in 1984, and settling in California, he founded Infinitel Communications, Inc. which has later grown to be one of the largest Asian owned cellular and communications products retail chain stores in Northern California. In 2000, Mr. Ma and other investors formed Global Talker Inc. to tap into the global communication applications in the wireless market. Mr. Ma graduated from Hong Kong Technical College in 1972.  Mr. Ma is committed to devote 35% of his time in running our business.  We believe that Mr. Ma’s experience in management and US public companies, as well as his educational background qualify him as the Vice Chairman of the Board of Directors.
 
Spencer Luo, Age 47, President, CEO and Director
 
Mr. Luo has been our President, CEO and a member of our Board of Directors since 2008. He is a well-known real estate investment professional in residential and commercial properties. From 1996 to 1999, Mr. Luo was the Vice President of Operation at Honway International Company with a California pistachio processing capacity of over 150 containers each year. His major duties included signing processing contracts for “closed shell” pistachios for U.S. processors, monitoring processing facilities in China, and making corporate strategies for trading pistachios with Asian clients and U.S. processors. He joined Re/Max San Francisco from 2004 to 2007 as the Vice President of Sales and has received the Chairman Award with the franchise.  He is an active investor in projects such as telecommunications, and renewable energies for the last few years. Mr. Luo received a Bachelor’s degree in Business Administration from San Francisco State University in California in 1994.  Mr. Luo is committed to devote 65% of his time in running our business. We believe that Mr. Luo’s previous working experience as a Vice President and his knowledge in the renewable energies industry qualify him as the President, Chief Executive Officer and Director of our company.
 
Stephen Wan, Age 53, Chief Financial Officer, Treasurer and Director
 
Mr. Wan has been our Treasurer and a member of the Board of Directors since 2008. He is a Certified Public Accountant with the State of California. Mr. Wan has more than 20 years of accounting experience in diverse entities including a NYSE listed company, a foreign conglomerate, a regional public accounting firm and local tax consulting practice.  Since 2005, he has been managing a public accounting firm in the San Francisco Bay Area.  He also served  as the CFO of Atman Hospitality Group, Inc., a company renowned for the development of pioneering green hotels from 2005 to 2011. Mr. Wan received a Bachelor of Science degree from the University of Illinois in 1982. Mr. Wan is committed to devote 20% of his time in running our business. We believe that Mr. Wan’s accounting experience and his educational background qualify him to be the Chief Financial Officer, Treasurer and Director of our company.
 
Miles Xu, Age 43, Secretary and Director
 
Mr. Xu is one of our founders and has been our Secretary and Director since 2008. He has many years of sales and marketing experience in high technology area. After graduating from San Jose State University, Mr. Xu worked for several high tech companies in the Silicon Valley, California as Purchasing Manager and Vice President of Sales. While working at Suncrest, Inc, a company that sells computer peripherals such as CPUs, memories, hard drives, motherboards and other computer related products, Mr. Xu has successfully doubled the company’s monthly sales volume within six months during his tenure. In March 2004, Mr. Xu started and is currently operating his own company SP Peripherals Inc.  Mr. Xu is committed to devote 30% of his time in running our business. We believe that Mr. Xu’s experience in sales and marketing qualifies him as the Secretary and Director of our company.
 
Chung Tung Lim, Age 49, Vice President, COO and Director
 
Mr. Lim has been serving as our Vice President, COO and a member of the Board of Directors since 2008. In 1989, he immigrated to the United States and worked in various management positions before becoming a consultant for E-Four Flooring Co. in 2003. In 2004, he joined East Star Building Supply Co. as a consultant and in 2006, established Quality Home Building Supplies Company, a corporation distributing building materials in Portland, Oregon. As a consultant, his job responsibility include sourcing for building supplies, quality control, negotiating finance terms, and building loyalty with suppliers. Mr. Lim manages our daily operations. Mr. Lim graduated from TaiShan Academy School, China, in 1981. Mr. Lim is committed to devote 65% of his time in running our business. We believe that Mr. Lim’s management experience and his educational background qualify him as the Vice President, Chief Operating Officer and Director of our company.
 
Lampo Joanna Cheung, Age 45, Vice President of Marketing and Director
 
Ms. Cheung is our Vice President of Marketing and Director. She joined us in March 2010 to develop a new cabinetry product line to further invigorate our growth. Since 2005, Ms. Cheung is a renowned entrepreneur and has set up and operated various businesses, including a wholesaler and retailer for cabinets and vanities. Ms. Cheung graduated with a BS degree in Business Administration from the  San Francisco State University in 1997. Ms. Cheung is committed to devote 40% of her time in running our business. We believe that Ms. Cheung’s experience and skills in marketing and management and her educational background qualify her as the Vice President of Marketing and Director of our company.
 
 
13

 
 
Tony Lee, Age 43, Vice President of Products Development and Director
 
Mr. Lee has been our Vice President of Products Development and a member of the Board of Directors since 2008. He is the founder of K&K Machinery Inc., a fiber optic component and fiber conductor manufacturer, in the Silicon Valley of California. Since 1994, Mr. Lee has over 10 years of operation and marketing experience on fiber optic, semiconductor & telecommunication components.  His clientele are major brand-name companies in the valley, including Cisco, HP, JDSU, AMAT and many others. Mr. Lee invested into TLMS International, Inc. for opportunities in the communications and renewable energy businesses. Mr. Lee graduated from South China Institute of Technology, China, in 1987. Mr. Lee is committed to devote 30% of his time in running our business. We believe that Mr. Lee’s experience in production and management, as well as his educational background qualify him as the Vice President of Products Development and Director of our company.

Justin Luo, Age 52, Vice President of Technical Service and Director
 
Mr. Luo has been our Vice President of Technical Service and a member of the Board of Directors since 2008. He immigrated to the United States in 1989 and worked in the electrical field for various residential builders. In 1999, Mr. Luo earned his general and electrical contractor licenses from the State of California. Since then, he started his own residential development business, Luo’s Construction, to build residential houses. Mr. Luo has further advanced his professional knowledge and polished his skills by attending classes related to renewable energies organized by PG&E of California. Mr. Luo graduated from Guangzhou Electrical Technical College in Guangdong Province, China. Mr. Luo is committed to devote 30% of his time in running our business. We believe that Mr. Luo’s construction experience and knowledge in renewable energies industry, as well as his educational background qualify him as the Vice President of Technical Service and Director of our company.

Tony Jiang, Age 58, Director
 
Mr. Jiang has been a member of our Board of Directors since late 2008. He was running a successful electronic component manufacturing and distribution business in Hong Kong before he sold it and immigrated to the United States in 1992.  In 2002, Mr. Jiang founded GPNP, a personal computer and telecom product import and export company in Silicon Valley, California. GPNP is also the sole representative in the U.S. of a domestic energy saving device manufactured by the Corona Technology, Inc. in Taiwan.   In 2007, Mr. Jiang founded Advance Solar Corporation in Shanghai, China for the purpose of helping R&D firms in the United States further develop their products.  Mr. Jiang graduated from King’s College, Hong Kong, in 1970. Mr. Jiang is committed to devote 20% of his time in running our business. We believe that Mr. Jiang’s experience and knowledge in the energy industry and his educational background qualify him as the Director of our company.
 
Family Relationships
 
Other than Justin Luo and Spencer Luo being brothers, no other family relationship exists between any director, executive officer, or any person contemplated to become such.
 
Director Independence
 
We currently do not have any independent directors serving on our board of directors.
 
Involvement in Certain Legal Proceedings
 
To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
 
Code of Business Conduct and Ethics
 
We currently do not have a Code of Business Conduct and Ethics.  We intend to adopt a code of ethics that applies to our chief executive officer and chief financial officer during the fiscal year ending March 31, 2012.

 
14

 
 
ITEM 11.   EXECUTIVE COMPENSATION

Summary Compensation Table – Fiscal Years Ended March 31, 2012 and 2011
 
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named person for services rendered in all capacities during the noted periods.
 
SUMMARY COMPENSATION TABLE
 
                                                     
Name and
Principal
Position
 
Year
Ended
March 31
 
Salary
($)
   
Bonus
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive
Plan
Compensation Earnings
($)
   
Non-
Qualified
Deferred
Compensation
Earnings
($)
   
All Other
Compensation
($)
   
Total
($)
 
                                                     
Ai Huan Liu
                                                   
Chairwoman
 
2012
    0       0       0       0       0       0       0       0  
of the Board
 
2011
    0       0       0       0       0       0       0       0  
of Directors
                                                                   
                                                                     
                                                                     
George Ma
                                                                   
Vice Chairman of
 
2012
    0       0       0       0       0       0       0       0  
the Board of
 
2011
    0       0       0       0       0       0       0       0  
Directors
                                                                   
                                                                     
Spencer Luo
                                                                   
President,
 
2012
    0       0       0       0       0       0       0       0  
CEO and
 
2011
    0       0       0       0       0       0       0       0  
Director
                                                                   
                                                                     
Stephen Wan
                                                                   
CFO,
 
2012
    0       0       0       0       0       0       0       0  
Treasurer
 
2011
    0       0       0       0       0       0       0       0  
and Director
                                                                   
                                                                     
Miles Xu
                                                                   
Secretary
 
2012
    0       0       0       0       0       0       0       0  
and Director
 
2011
    0       0       0       0       0       0       0       0  
                                                                     
Chung Tung
                                                                   
Lim
                                                                   
Vice
                                                                   
President,
 
2012
    0       0       0       0       0       0       0       0  
COO and
 
2011
    0       0       0       0       0       0       0       0  
Director
                                                                   
                                                                     
Lampo Joanna
                                                                   
Cheung
                                                                   
Vice
                                                                   
President of
 
2012
    0       0       0       0       0       0       0       0  
Marketing
 
2011
    0       0       0       0       0       0       0       0  
and Director
                                                                   
                                                                     
Tony Lee
                                                                   
Vice
                                                                   
President of
                                                                   
Products
 
2012
    0       0       0       0       0       0       0       0  
Development
 
2011
    0       0       0       0       0       0       0       0  
and Director
                                                                   
                                                                     
Justin Luo
                                                                   
Vice
                                                                   
President of
                                                                   
Technical
 
2012
    0       0       0       0       0       0       0       0  
Service and
 
2011
    0       0       0       0       0       0       0       0  
Director
                                                                   
                                                                     
Tony Jiang
 
2012
    0       0       0       0       0