Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - China Elite Information Co., Ltd. | Financial_Report.xls |
| EX-32 - EXHIBIT 32 - China Elite Information Co., Ltd. | ex32.htm |
| EX-31 - EXHIBIT 31 - China Elite Information Co., Ltd. | ex31.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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x
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended May 31, 2012
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from ______to ______
Commission file number: 000-25591
| CHINA ELITE INFORMATION CO., LTD. |
| (Exact name of Registrant as Specified in its Charter) |
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BRITISH VIRGIN ISLANDS
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11-3462369
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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c/o DeHeng Chen, LLC, 225 Broadway, Suite 1910, NY, NY
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10007
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(Address of Principal Executive Offices)
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(Zip Code)
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| (212) 608-6500 |
| (Registrant’s telephone number, including area code) |
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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such filing). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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o Large accelerated filer
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o Accelerated filer
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o Non-accelerated filer
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x Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of July 16, 2012, there were 11,200,000 shares of common stock outstanding.
CHINA ELITE INFORMATION CO., LTD.
FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED MAY 31, 2012
INDEX
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Page
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Number
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1
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Item 1.
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1
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1
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2
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3
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4
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Item 2.
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5
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Item 4.
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7
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8
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Item 1.
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8
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Item 2.
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8
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Item 3.
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8
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Item 4.
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8
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Item 5.
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8
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Item 6.
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8
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9
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PART I. FINANCIAL INFORMATION
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Condensed Interim Financial Statements
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CHINA ELITE INFORMATION CO., LTD.
(A Development Stage Company)
CONDENSED INTERIM BALANCE SHEETS
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(Expressed in U.S. Dollars)
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May 31,
2012
(Unaudited)
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November 30,
2011
(Audited)
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ASSETS
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Total assets
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$ | - | $ | - | ||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
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Current Liabilities
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Accounts payable and accrued expenses
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$ | 1,975 | $ | 2,788 | ||||
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Loans from shareholder
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594,731 | 573,147 | ||||||
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Total current liabilities
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596,706 | 575,935 | ||||||
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Commitments and Contingencies
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Stockholders’ Deficiency
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Preferred stock: $0.01 par value; 10,000,000 shares authorized; issued and outstanding: none
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- | - | ||||||
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Common stock: $0.01 par value; 50,000,000 shares authorized; issued and outstanding: 11,200,000
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112,000 | 112,000 | ||||||
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Additional paid in capital
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154,465 | 154,465 | ||||||
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Deficit accumulated during the development stage
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(863,171 | ) | (842,400 | ) | ||||
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Total stockholders’ deficiency
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(596,706 | ) | (575,935 | ) | ||||
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Total liabilities and stockholders’ deficiency
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$ | - | $ | - | ||||
See condensed notes to interim financial statements.
CHINA ELITE INFORMATION CO., LTD.
(A Development Stage Company)
CONDENSED INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
For the three and six months ended May 31, 2012 and 2011, and
for the period from inception (December 19, 1997) to May 31, 2012
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Cumulative from
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Six months ended
May 31,
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Three months ended
May 31,
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(Expressed in U.S. Dollars)
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inception
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2012
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2011
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2012
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2011
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Revenues
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
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General and administrative expenses
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||||||||||||||||||||
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Salaries and benefits
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181,888 | - | - | - | - | |||||||||||||||
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General and administrative
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610,415 | 20,771 | 18,222 | 7,883 | 7,794 | |||||||||||||||
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Consulting fees – related party
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150,000 | - | - | - | - | |||||||||||||||
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Total general and administrative expenses
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942,303 | 20,771 | 18,222 | 7,883 | 7,794 | |||||||||||||||
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Operating loss
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(942,303 | ) | (20,771 | ) | (18,222 | ) | (7,883 | ) | (7,794 | ) | ||||||||||
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Other income (expense)
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Loss on disposal of property and equipment
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(1,473 | ) | - | - | - | - | ||||||||||||||
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Interest expense
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(53,956 | ) | - | - | - | - | ||||||||||||||
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Interest income
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134,561 | - | - | - | - | |||||||||||||||
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Total other income (expense)
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79,132 | - | - | - | - | |||||||||||||||
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Net loss
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$ | (863,171 | ) | $ | (20,771 | ) | $ | (18,222 | ) | $ | (7,883 | ) | $ | (7,794 | ) | |||||
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Basic and diluted net loss per share
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
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Weighted average shares outstanding
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11,200,000 | 11,200,000 | 11,200,000 | 11,200,000 | ||||||||||||||||
See condensed notes to interim financial statements.
CHINA ELITE INFORMATION CO., LTD.
(A Development Stage Company)
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended May 31, 2012 and 2011, and
for the period from inception (December 19, 1997) to May 31, 2012
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(Expressed in U.S. Dollars)
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Cumulative
from
inception
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2012
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2011
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Cash flows from operating activities
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Net loss
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$ | (863,171 | ) | $ | (20,771 | ) | $ | (18,222 | ) | |||
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Adjustments to reconcile net loss to net cash flows used in operating activities
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Depreciation and organization costs
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11,492 | - | - | |||||||||
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Loss on disposal of property and equipment
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1,473 | - | - | |||||||||
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Common stock issued for services
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48,400 | - | - | |||||||||
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Changes in assets and liabilities
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Interest receivable
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(1,483 | ) | - | - | ||||||||
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Accounts payable and accrued expenses
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1,975 | (813 | ) | 7,527 | ||||||||
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Net cash flows used in operating activities
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(801,314 | ) | (21,584 | ) | (10,695 | ) | ||||||
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Cash flows from investing activities
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Cash paid for note receivable
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(1,117,602 | ) | - | - | ||||||||
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Cash received from note receivable
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1,117,602 | - | - | |||||||||
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Cash paid for equipment
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(11,465 | ) | - | - | ||||||||
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Net cash flows used in investing activities
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(11,465 | ) | - | - | ||||||||
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Cash flows from financing activities
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Loans from shareholder
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609,128 | 21,584 | 10,695 | |||||||||
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Proceeds from issuance of stock
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1,531,250 | - | - | |||||||||
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Cash paid for stock redemption
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(150,000 | ) | - | - | ||||||||
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Deferred offering costs against capital
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(25,927 | ) | - | - | ||||||||
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Acquisition of treasury stock
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(1,151,672 | ) | - | - | ||||||||
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Net cash flows provided by financing activities
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812,779 | 21,584 | 10,695 | |||||||||
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Increase (decrease) in cash
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- | - | - | |||||||||
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Cash, beginning of period
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- | - | - | |||||||||
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Cash, end of period
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$ | - | $ | - | $ | - | ||||||
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Cash paid for interest and income taxes
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$ | - | $ | - | $ | - | ||||||
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Supplemental noncash investing and financing activities:
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Common stock issued for services
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$ | 48,400 | $ | - | $ | - | ||||||
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Loans payable converted to additional paid in capital
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$ | 14,397 | $ | - | $ | - | ||||||
See condensed notes to interim financial statements.
CHINA ELITE INFORMATION CO., LTD.
(A Development Stage Company)
CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. However, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of results for the entire year. These condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto for the fiscal year ended November 30, 2011 included in its Annual Report on Form 10-K.
Loss Per Share
Basic earnings or (loss) per share (“EPS”) is computed as net loss divided by the weighted average number of shares outstanding during the period in accordance with Earnings Per Share Topic of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Diluted EPS includes the effect from potential dilutive securities and is equal to basic loss per share for all periods presented because there are no potential dilutive securities and the Company has incurred a net loss. All per share information is adjusted retroactively to reflect stock splits and changes in par value.
NOTE 2 – GOING CONCERN
The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern. However, the Company has limited operations and has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit. The Company’s cash requirements for working capital have been satisfied through loans from its majority shareholder and the Company expects to obtain additional capital through shareholder loans and/or a debt or equity financing to continue its operations. There is no assurance the Company will be successful in raising the needed additional capital or that such additional funds will be available for the Company on acceptable terms, if at all. The Company’s President, who is also the majority shareholder, has orally agreed to fund its operations for the next twelve months, based on the Company’s current level of expenditures, as necessary. However, the Company’s need for capital may change dramatically if it acquires a suitable business opportunity during that period. In view of these matters, the continued existence of the Company is dependent upon its ability to meet its financing requirements on a continuing basis and to succeed in its future operations.
Management’s plans are to identify and pursue profitable business opportunities through mergers and acquisitions, so as to diversify the business risks and maximize the returns to stockholders.
To meet these objectives, the Company plans to seek potential merger candidates and expects to raise additional capital, through private equity and/or debt investment in order to support existing operations and expand the range and scope of its business. There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all. Management believes that actions presently taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern. The Company’s ability to achieve these objectives cannot be determined at this time. If the Company is unsuccessful in its endeavors, it may have to cease operations.
NOTE 3 – RELATED PARTY TRANSACTIONS
Amount due to a stockholder of $594,731 at May 31, 2012 (at November 30, 2011: $573,147) represents a series of advances from the majority stockholder to fund working capital requirements. There is no note and the amounts are unsecured, interest-free, and repayable on demand. The majority stockholder, who is also the Company’s President, has orally agreed to fund the Company’s operations for at least the next twelve months.
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Form 10-Q that are not purely historical are forward-looking statements. These include statements about the Company’s expectations, beliefs, intentions or strategies for the future, which are indicated by words or phrases such as “anticipate”, “expect”, “intend”, “plan”, “will”, “the Company believes”, “management believes” and similar words or phrases. The forward-looking statements are based on the Company’s current expectations and are subject to certain risks, uncertainties and assumptions. The Company’s actual results could differ materially from results anticipated in these forward-looking statements. All forward-looking statements included in this document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. Readers are also urged to carefully review and consider the various disclosures made by the Company that are to advise interested parties of the factors which affect the Company’s business, in this report, as well as the Company’s periodic reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission.
These risks and uncertainties, many of which are beyond our control, include (i) the sufficiency of existing capital resources and the Company’s ability to raise additional capital to fund cash requirements for future operations; (ii) uncertainties involved in the acquisition of an operating business in targeted industry and/or a targeted geographic region; (iii) the Company’s ability to achieve sufficient revenues through an operating business to fund and maintain operations; (iv) volatility of the stock market; and (v) general economic conditions. Although the Company believes the expectations reflected in these forward-looking statements are reasonable, such expectations may prove to be incorrect. Investors should be aware that they could lose all or substantially all of their investment.
Critical Accounting Policies
Based on the Company’s current level of limited operations and development stage status, the Company does not believe it has any critical accounting policies at this time.
Results of Operations – The Three Months Ended May 31, 2012 Compared to the Three Months Ended May 31, 2011
Revenues
The Company did not recognize any revenue in each of the three-month periods ended May 31, 2012 and May 31, 2011.
General and Administrative
General and administrative expenses consist primarily of public company compliance expenses, including legal and accounting expenses. General and administrative expenses for the three-month period ended May 31, 2012 increased 1.1%, or $89, to $7,883 from $7,794 for the three-month period ended May 31, 2011.
Other (Income) Expense
The Company did not incur any interest expense or earn any interest income for the three-month periods ended May 31, 2012 and May 31, 2011.
Results of Operations – The Six Months Ended May 31, 2012 Compared to the Six Months Ended May 31, 2011
Revenues
The Company did not recognize any revenue in each of the six-month periods ended May 31, 2012 and May 31, 2011.
General and Administrative
General and administrative expenses consist primarily of public company compliance expenses, including legal and accounting expenses. General and administrative expenses for the six-month period ended May 31, 2012 increased 14.0%, or $2,549, to $20,771 from $18,222 for the six-month period ended May 31, 2011. The higher expenses in current six-month period were primarily due to the increase of audit fee and EDGAR filing fees.
Other (Income) Expense
The Company did not incur any interest expense or earn any interest income for the six-month periods ended May 31, 2012 and May 31, 2011.
Capital Resources and Liquidity
The Company does not currently have any cash or have any other significant assets. However, the Company believes that, based on an oral commitment from its majority stockholder, who is also the President of the Company, to fund the Company’s operating activities at its current level of expenditures, it has sufficient resources to meet the anticipated needs of its operations, such as maintaining its required continuous disclosure and reporting requirements with the Securities and Exchange Commission, for the next twelve months, though there can be no assurances to that effect. The Company had no revenues for the six months ended May 31, 2012 and its need for capital may change dramatically if it acquires a suitable business opportunity during the next twelve months. Therefore, the Company plans to rely on shareholder loans and the raising of debt or equity capital to continue its operations. There is no assurance the Company will be successful in raising the needed capital.
We have incurred net losses since inception, expect to incur losses in the future associated with the costs of operating as a public company, and may never achieve revenues or profitability unless we complete a successful merger. We are a development stage company and have never recognized any revenue from the sale of products or any other source. Our operating losses have had, and will continue to have, an adverse impact on our working capital, total assets and stockholders’ equity. We do not know when or if we will ever generate revenue or become profitable because of the significant uncertainties with respect to our ability to acquire a suitable business opportunity.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officer”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Certifying Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a) accumulated and communicated to our management, including to our Certifying Officer, as appropriate to allow timely decisions regarding required disclosure; and (b) recorded, processed, summarized and reported within the time specified in the SEC’s rules and forms. Since that evaluation process was completed, there have been no significant changes in our disclosure controls or in other factors that could significantly affect these controls.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting identified in connection with this evaluation that occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II.
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OTHER INFORMATION
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Legal Proceedings
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None.
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Unregistered Sales of Equity Securities and Use of Proceeds
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None.
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Defaults Upon Senior Securities
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None.
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Mine Safety Disclosures
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Not applicable.
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Other Information
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None.
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Exhibits
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(a)
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Exhibits:
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Exhibit 31 - Certification of President, Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32 - Certification of President, Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS - XBRL Instance Document
Exhibit 101.SCH - XBRL Schema Document
Exhibit 101.CAL - XBRL Calculation Linkbase Document
Exhibit 101.DEF - XBRL Definition Linkbase Document
Exhibit 101.LAB - XBRL Label Linkbase Document
Exhibit 101.PRE - XBRL Presentation Linkbase Document
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CHINA ELITE INFORMATION CO., LTD.
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Date: July 16, 2012
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By:
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/s/ Li Kin Shing
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Li Kin Shing
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President and Chief Executive Officer
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