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| LNDG > SEC Filings for LNDG > Form 10-K/A on 17-May-2012 | All Recent SEC Filings |
17-May-2012
Annual Report
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believes,"
"project," "expects," "anticipates," "estimates," "intends," "strategy," "plan,"
"may," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor
provisions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
Overview
We mainly engage in the research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications.
Our main products are hydrogen and oxygen generating machines, which have widely industrial and commercial uses, such as welding, cutting, braising and motor vehicle engine carbon cleaning.
We were incorporated under the name "Reflex Inc" in the State of Nevada on October 4, 2007. Initially we were engaged in the business of developing, manufacturing, and selling degradable fast-food packaging specifically for use as heating systems in Indonesia, China and other Asian countries. Budi Setyawan and Herdiansyah Milana were the members of board of directors and the officers from our inception to December 2009.
On December 09, 2009, Budi Setyawan and Herdiansyah Milana executed and consummated an Affiliate Stock Purchase Agreement under which they sold all the 1,200,000 shares of common stock they owned in the Company, representing approximately 55.8% of the total issued and outstanding shares of common stock of the Company, to a group of individual purchasers Nai Sung Chou, Yidian Dong, Di Zhang, Te Hung Chou, and Zemin Su for a total price of $ 180,000.00.
In connection with the share purchase transaction, Budi Setyawan and Herdiansyah Milana resigned from all the positions they held in the Board of Directors and the executive office of the Company. Nai Sung Chou, Yidian Dong, David Chung, Di Zhang, Te Hung Chou, Zemin Su, Tonghuai Wang were elected as the members of the Board Director of the Company. Nai Sung Chou was appointed as the President of the Board of Directors and the Chief Executive Officer of the Company. Di Zhang was appointed as the Secretary of the Board of Directors. Yidian Dong was appointed as the Treasurer of the Board of Directors and the Chief Financial Officer of the Company. On November 16, 2010, Nai Sung Chou resigned as the Chief Executive Officer and Yidian Dong was appointed the Chief Executive Officer.
On December 21, 2009, we changed our name to "Landmark Energy Enterprise, Inc".
On April 19, 2010, we effectuated a 8:1 forward stock split which increase the total number of shares of issued and outstanding common stock to 17, 200,000 (There are 2,150,000 shares of issued and outstanding common stock prior to the stock split). The par value of the common stock remains the same, which is $ 0.001.
On September 15, 2010, we, along with Dalian Landmark, entered a Share/Ownership Transfer Agreement with Te Hung Chou and Dalian Aquarius Energy Technology U.S.A..Co., Ltd ("Dalian Aquarius"), a limited liability company formed under the laws of the People's Republic of China. The actual transfer of the Dalian Ownership described above has not been carried out and none of the parties to the Share/Ownership Transfer Agreement has performed its obligations. On January 14, 2011, we, along with Dalian Landmark entered an Agreement of Rescission ("Rescission Agreement") with Te Hung Chou and Dalian Aquarius to rescind the Share/Ownership Transfer Agreement we entered on September 15, 2010.
On September 15, 2010, Dalian Landmark entered a Patent and Assets Transfer Agreement with Dalian Aquarius that has developed one or more patents for the generation of hydrogen through proprietary designed machines ("Machines") and owns certain assets related to Machines. Under the Patent and Assets Transfer Agreement, Dalian Aquarius transferred and assigned to Dalian Landmark the said patents ("Patents") and assets ("Assets") related to the Machines. In exchange for the Patents and Assets, Dalian Landmark shall execute and deliver to Dalian Aquarius a Promissory Note, to pay US $ 2,780,000.00 (or RMB 18,848,400.00 Yuan) ("Transfer Price") to Dalian Aquarius. At the option of Dalian Aquarius and its assigns or successors and subject to our consent, the said Promissory Note may be converted into 1,000,000 shares of common stock of Landmark Energy Enterprise Inc. As a result of the Patent and Assets Transfer Agreement, Dalian Landmark owns all right, title and interest in and to the patent rights and the related documents and material ("Patent Rights") for the generation of hydrogen through Machines.
On September 15, 2010, Dalian Landmark and Dalian Aquarius entered a License and Manufacture Agreement, in which Dalian Landmark granted to Dalian Aquarius a non-exclusive and non-transferrable license to use Patent Rights to manufacture the Machines in the People's Republic of China. Dalian Aquarius shall not permit and allow any third party to use the Patent Rights without the prior written approval of Dalian Landmark. Under the terms of the License and Manufacture Agreement, Dalian Aquarius will not claim ownership rights to Patent Rights, other than the right to use the Patent Rights; also both Dalian Aquarius and Dalian Landmark may appoint one representative to each other's Board of Directors or the equivalent governing body. Dalian Aquarius also agrees to manufacture and sell the Machines Dalian Landmark at cost and provide technical support, which means no profit will be made from the sale of the Machines to Dalian Landmark. Dalian Aquarius also agrees that in the event that Dalian Aquarius sells the Machines to any other third party with the express permission of Dalian Landmark, Dalian Aquarius shall pay a license fee equal to 6% of the total sales price to Dalian Landmark. Dalian Landmark agrees to provide the working capital for Dalian Aquarius to launch the manufacturing of the Machines and the provided working capital shall be used solely for the purpose of the production of the Machines and the related administrative expenses, with all provided working capital to be properly accounted for and managed pursuant to a financial oversight committee consisting of two representatives each of Dalian Landmark and Dalian Aquarius. At the option of Dalian Landmark, Dalian Aquarius shall display with all units of the Machines an approved symbol notifying the consumer of the patent and/or trademark rights owned by and licensed to Dalian Landmark.
Upon the consummation of the above described Patent and Assets Transfer Agreement and License and Manufacture Agreement, we officially launched the business of research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications.
Critical Accounting Policies and Estimates
Change in Fiscal Year End
On October 20, 2011, Company changed its fiscal year end from October 31 to January 31.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting). Company's fiscal year end was October 31 through the fiscal year ended October 31, 2010 and on October 20, 2011, the Company has adopted a January 31 fiscal year end.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary (Dalian Landmark Energy Technology Co.). All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents, prepaid expenses, interest receivable, accrued expenses and amounts due to an officer. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of January 31, 2012.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Recent Accounting Pronouncements
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flow.
Results of Operations
Summary of Statement of Operations
For the Year ended For the Year ended
January 31, January 31,
2012 2011
Sales $ 212,233 $ -
Gross profit 104,833 -
Operating expenses 617,311 688,745
Total other income 2,176 132
Net loss (510,302 ) (688,613 )
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Sales:
Our sales for the year ended January 31, 2012 were $ 212,233, an increase of $ 212,233 from our sales of $0 for the year ended January 31, 2011. Such increase was mainly due to our carbon removal service for the cars.
Gross Profit:
As a result of the foregoing, we generated a gross profit of $104,833 for year ended January 31, 2012.
Operating Expenses:
Operating expenses, including selling expenses, and general and administrative expenses, were $ 617,311 for the year ended January 31, 2012, slightly decreased as compared to $ 688,745 for the year ended January 31, 2011. The decrease of these major expenses was mainly due to decrease of the total salary.
Net Loss:
Net Loss for the year ended January 31, 2012 was $510,302, a decrease of $178,311 compared with $ 688,613 of the year ended January 31, 2011. This decrease in net loss was the result of the revenues that we have generated from our business operations in the year ended January 31, 2012.
Summary of Balance Sheets
January 31, January 31,
2012 2011
Assets
Total current assets 238,353 215,637
Property and equipment, net 33,026 -
Total assets $ 271,379 $ 215,637
Total current liabilities 1,027,169 486,750
Convertible notes payable to stockholders 480,000 455,000
Total liabilities 1,507,169 941,750
Total stockholders' deficit (1,235,790 ) (726,113 )
Total liabilities and stockholders' deficit $ 271,379 $ 215,637
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As of January 31, 2012, we had cash and cash equivalents of $ 19,466. Our current assets were $ 238,353 and our current liabilities were $1,027,169 as of January 31, 2012.
We received loans from seven stockholders until January 31, 2012. The loans are due five years from the date the funds were received. The loans are non-interest bearing and can be converted to stock at $1.00 per share at any time by the note holders. The loans are all due between April and December 2015. The balance due on these convertible notes was $480,000 and $455,000 as of January 31, 2012 and January 31, 2011, respectively.
Total stock holders' deficit as of January 31, 2012 was $ 1,235,790.
Liquidity and Capital Resources
The following table sets forth a summary of our cash flows for the periods indicated:
For the years Ended January 31,
2012 2011
Net cash used in operating activities (180,969 ) (282,458 )
Net cash used in investing activities (8,265 ) (207,603 )
Net cash provided by financing activities 199,248 498,000
Cash and cash equivalents - beginning 7,939 -
Cash and cash equivalents - ending $ 19,466 $ 7,939
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Net cash used in operating activities was $180,969 for the year ended January 31, 2012, a decrease of $101,489 from $ 282,458 for the year ended January 31, 2011 primarily as a result of the decrease in net loss.
Net cash used investing activities was $ 8,265 for the year ended January 31, 2012, which was an decrease of $199,338 from net cash used in investing activities was $207,603 for the year ended January 31, 2011 primarily result of decrease loan to the others.
Net cash provided by financing activities amounted to $199,248 for the year ended January 31, 2012, compared to net cash provided by financing activities of $498,000 for the year ended January 31, 2011. The decrease of cash provided by financing activities was primarily results of decrease loan from borrowers.
Off Balance Sheet Arrangements
As of January 31, 2012, there were no off balance sheet arrangements.
Going Concern
We have incurred losses since inception, and have not yet received revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management's plans include selling our equity securities and obtaining debt financing to fund out capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.
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