China Elite Information (PFOO) 10-Q2021 Q1 Quarterly report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒   No ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☒   No ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of April 12, 2021, there were 11,200,000 shares of common stock outstanding.

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, 2020 included in its Annual Report on Form 10-K.

In March 2020, World Health Organization declared the outbreak of COVID-19 as a pandemic. The outbreak of COVID-19 caused by a novel strain of coronavirus has spread to over 150 countries. The COVID-19 pandemic has created significant volatility, uncertainty and disruption to the worldwide economy. Nevertheless, in view of the Company’s current level of limited operations, it has no significant adverse impact on our business, financial condition, results of operations and cash flows, as of the date of this filing.

Basic loss per share is computed as net loss divided by the weighted average number of shares outstanding during the period. There is no diluted per share information presented due to losses in all periods. In addition, there are no potentially dilutive securities outstanding.

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, as is evident in the accompanying financial statements, Management has considered that the Company has no assets, limited operations and has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit of $1,165,785.  For the three months ended February 28, 2021, the Company had a net loss of $3,871. As a result of its evaluation of conditions and events, Management has concluded they are of such significance as to raise substantial doubt as to the Company’s ability to meet its financial obligations as they come due and continue as a going concern.

The Company’s cash requirements for working capital have been satisfied for the past several years through loans from its majority shareholder and the Company plans to seek additional capital as needed through shareholder loans and/or a debt or equity financing to continue its operations.  The Company’s President, who is also the majority shareholder, has orally agreed to fund its operations for at least the next twelve months.  However, Management believes that the Company’s need for capital may change dramatically if it identifies and acquires a suitable business opportunity during that period.  In view of these matters, the continued existence of the Company and its ability to succeed in any future operations is dependent upon its ability to meet its financing requirements on a continuing basis.

There can be no assurance that such additional funds will be available for the Company on acceptable terms, if at all.  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.  These financial statements do not include any adjustments that might result from this uncertainty.

Management currently has no specific plan to address these conditions except to continue to maintain its status as a reporting public shell for the foreseeable future.

Amount due to a stockholder of $893,038 at February 28, 2021 (at November 30, 2020: $879,798) 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.

The entity is taxable only in a foreign jurisdiction where Net Operating Loss (“NOL”) carryforwards are not available.

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.  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 a 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.

The Company has limited operations solely intended to maintian its status as a reporting public shell and has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit of $1,165,785 as at February 28, 2021.

Based on the Company’s current level of limited operations, the Company does not believe it has any critical accounting policies or estimates at this time.

In March 2020, World Health Organization declared the outbreak of COVID-19 as a pandemic. The outbreak of COVID-19 caused by a novel strain of coronavirus has spread to over 150 countries. The COVID-19 pandemic has created significant volatility, uncertainty and disruption to the worldwide economy. Nevertheless, in view of the Company’s current level of limited operations, we do not expect it has material adverse effect on our business, financial condition, results of operations and cash flows.

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 February 28, 2021 increased 110.6%, or $2,033 to $3,871 from $1,838 for the three-month period February 29, 2020. The higher expenses were primarily due to the increase in legal expenses and stock registration fees.

The Company does not currently have any cash or any other significant assets.  However, the Company believes that, based on its oral commitment from its President and majority stockholder 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 three months ended February 28, 2021 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 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.

Accordingly, in their report dated March 15, 2021, our independent registered public accounting firm expressed substantial doubts as to the Company’s ability to continue as a going concern.

Certain conflicts of interest have existed and will continue to exist between management, their affiliates and the Company.  Management has other interests including business interests to which he devotes his primary attention.  Management may continue to do so notwithstanding the fact that management time should be devoted to the business of the Company and in addition, management may negotiate an acquisition resulting in a conflict of interest.

We do 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 conditions, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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 Securities Exchange Act of 1934 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.

There were no changes in our internal controls over financial reporting identified in connection with this evaluation that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.