PINX:LNDG Landmark Energy Enterprise Inc Annual Report 10-K/A Filing - 1/31/2012

Effective Date 1/31/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K/A
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE ANNUAL PERIOD ENDED JANUARY 31, 2012

Commission file number: 333-147685

Landmark Energy Enterprise Inc.
(Exact name of small business issuer as specified in its charter)

Nevada
N/A
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

1404 E Joppa Road, Towson, MD 21286
           (Address of principal executive offices)

Phone:  443-956-2392  
(Issuer’s telephone number)

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

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value per share
(Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days.  YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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

The aggregate market value of the voting and non-voting stock (9,125,000 shares of common stock) held by non-affiliates of the registrant, as of May 12, 2012, was approximately $ 25,641,250, computed by reference to the last reported sale price of $ 2.81per share on April 21, 2011.  All executive officers and directors of the registrant have been deemed, solely for the purpose of the foregoing calculation, to be "affiliates" of the registrant.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 17,200,000  Shares of Common Stock, as of January 31, 2012 and May 12, 2012.

Explanatory Note

The purpose of this Form 10-K/A Amendment is furnish the Interactive data files pursuant to Rule 405 of Regulation S-T.
 
 
 
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TABLE OF CONTENTS
 
PART I
Page
   
Item 1.     Business.
 
Item 1A.  Risk Factors.
 
Item 2.     Properties.
 
Item 3.     Legal Proceedings.
 
Item 4.     Submission of Matters to a Vote of Security Holders.
 
   
PART II
 
   
Item 5.     Market for Common Equity, Related Shareholder Matters and Small Business Issuer Purchases of Equity Securities.
 
Item 6.     Selected Financial Data.
 
Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
 
Item 8.     Financial Statements and Supplementary Data.
 
Item 9.     Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
 
Item 9A.  Controls and Procedures.
 
Item 9B.  Other Information.
 
   
PART III
 
   
Item 10.   Directors, Executive Officers and Corporate Governance.
 
Item 11.   Executive Compensation.
 
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.
 
Item 13.   Certain Relationships and Related Transactions, Director Independence.
 
Item 14.   Principal Accountant Fees and Services.
 
Item 15.   Exhibits, Financial Statement Schedules.
 
Annex: Financial Statements
 

 
 
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PART I
 
When we use the terms ”we,” ”us,” ”our” and “the Company,” we mean Landmark Energy Enterprise Inc, a Nevada corporation and its wholly owned subsidiary Dalian Landmark Energy Technology Co, Ltd, a limited liability company formed under the laws of the People’s Republic of China.


ITEM 1. BUSINESS
 
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 wide industrial and commercial uses, such as welding, cutting, braising and motor vehicle engine carbon cleaning.


History

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 July 26, 2010, we formed a wholly owned subsidiary company, Dalian Landmark Energy Technology Co, Ltd (“Dalian Landmark”), in Dalian, the People’s Republic of China. We completed all the necessary governmental registration of the Dalian Landmark on February 20, 2011.
 
 
 
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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. Under the Rescission Agreement, all parties to the Share/Ownership Transfer Agreement rescind, ab initio all of the transactions contemplated by the Share/Ownership Transfer Agreement and all parties agree that all of documents and instruments relating to the Share/Ownership Transfer Agreement dated September 15, 2010, including any and all promissory notes or similar instruments issued by Dalian Landmark to pay Te Hung Chou were terminated, rescinded and rendered null and void, ab initio.

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. 

Market

As of January 31, 2012, we just launched the business of developing hydrogen and oxygen generating technologies and designing and selling hydrogen and oxygen generating equipments. Our business operations will be mainly carried out by our wholly owned Chinese subsidiary Dalian Landmark Energy Technology Co, Ltd in China. Our products have large market in China due to the facts that our products generate hydrogen which can be used a cleaner and more efficient source of energy for a variety of industrial and commercial uses. As an emerging market with massive manufacturing and construction industries, China has strong demands for cleaner and more efficient energy sources. As to our motor vehicle engine carbon cleaning products, they also have large market in China due to the fact that there are a growing number of automobile vehicles produced and sold in China. Growing environmental concerns encourage the car inspectors and car users take measures to reduce the carbon accumulation in the engines of their vehicles.

Suppliers

Pursuant to the License and Manufacture Agreement,, 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, manufactures the hydrogen and oxygen generating machines with the license right granted by us and sells the manufactured products to us at cost.  For the year ended January 31, 2012, Dalian Aquarius was our sole supplier.

Customers

Since our products will have wide industrial and commercial uses, our customers will be those companies and businesses that require heavy load of cutting, welding and brazing work  during their manufacturing or production process, such as ship builders, mining companies, metal works, etc. Our automobile engine carbon cleaning devices are used by car inspection stations, dealerships, mechanic shops and individual car owners.
 
 
 
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Competitions

To our knowledge, there are several other companies in China that also produce the hydrogen and oxygen generating machine. Changsha Okay Energy Series Equipment Company Ltd. and Shanghai COCH Energy Co. Ltd  are examples of the competitors. We have the technological advantage compared to our competitors in China because our machines were able to produce dehydrogated mixture of hydrogen and oxygen which is more suitable for industrial and commercial uses, while our competitors’ products do not have this capacity. We also constantly improve our technologies in order keep our competitive advantage.

Employee

As of January 31, 2012, we have 25 employees.
 
 
Manufacturing

As of January 31, 2012, we have our own manufacturing facility.

Intellectual Property

As of January 31, 2012, we owned two patents registered with the State Intellectual Property Office of the People’s Republic of China. The patent numbers are 200820218700.8 and 200820218701.2. One patent is regarding the technologies for hydrogen and oxygen generating devices and the other one is regarding the technologies for solar energy emergency sensory LED lighting devices.

Environmental Law
 
There were many new laws, regulations, rules and notices regarding the environment and energy production adopted, promulgated and put into force during past years.  The Chinese government is putting more stringent requirements and urgency on reducing pollution and emissions and improving energy efficiency nationwide. Our products are designed and constructed to comply with the environmental laws and regulations of China. 

ITEM 1A. RISK FACTORS
 
Risks Related to our Common Stock
 
The market price for our common stock may be volatile.
 
The market price for our common stock is highly volatile and subject to wide fluctuations in response to factors including the following: actual or anticipated fluctuations in our quarterly operating results, changes in the economic performance or market valuations of other companies involved in the same industry, announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments,  additions or departures of key personnel, potential litigation, or conditions in the market.

In addition, the securities markets from time to time experience significant price and volume fluctuations that are not related to the operating performance of particular companies.  These market fluctuations may also materially and adversely affect the market price of our common stock.
 
Shareholders could experience substantial dilution.
 
We may issue additional shares of our capital stock to raise additional cash for working capital. If we issue additional shares of our capital stock, our shareholders will experience dilution in their respective percentage ownership in the company.
 
We have no present intention to pay dividends.
 
We have not paid dividends or made other cash distributions on our common stock during any of the past three years, and we do not expect to declare or pay any dividends in the foreseeable future. We intend to retain any future earnings for working capital and to finance current operations and expansion of our business.
 
A large portion of our common stock is controlled by a small number of shareholders.
 
A large portion of our common stock is held by a small number of shareholders. As a result, these shareholders are able to influence the outcome of shareholder votes on various matters, including the election of directors and extraordinary corporate transactions including business combinations.  In addition, the occurrence of sales of a large number of shares of our common stock, or the perception that these sales could occur, may affect our stock price and could impair our ability to obtain capital through an offering of equity securities. Furthermore, the current ratios of ownership of our common stock reduce the public float and liquidity of our common stock which can in turn affect the market price of our common stock.
 
 
 
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We may be subject to “penny stock” regulations.
 
The Securities and Exchange Commission, or SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and our sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. These additional sales practice and disclosure requirements could impede the sale of our securities. Whenever any of our securities become subject to the penny stock rules, holders of those securities may have difficulty in selling those securities.

Risks Related to Our Business Operations

Our heavy reliance on the experience and expertise of our management may cause adverse impacts on us if a management member departs.
 
We depend on key personnel for the success of our business. Our business may be severely disrupted if we lose the services of our key executives and employees or fail to add new senior and middle managers to our management.
 
Our future success is heavily dependent upon the continued service of our key executives. We also rely on a number of key technology staff for the operation of our company. Our future success is also dependent upon our ability to attract and retain qualified senior and middle managers to our management team. If one or more of our current or future key executives or employees are unable or unwilling to continue in their present positions, we may not be able to easily replace them, and our business may be severely disrupted. In addition, if any of these key executives or employees joins a competitor or forms a competing company, we could lose customers and suppliers and incur additional expenses to recruit and train personnel.
 
We may need more capital for the operation and failure to raise the capital we need may delay the development plan and reduce the profits.
 
If we don’t have adequate income or our capital can’t meet the requirement for expansion of operations, we will need to seek financing to continue our business development. If we fail to acquire adequate financial resources at acceptable terms, we might have to postpone our proposed business development plans and reduce projections of our future incomes.
 
Risks Related to the People’s Republic of China
 
China’s economic policy may affect our business.
 
As of January 31, 2012, most of our future assets are expected to be in China, and  our revenue is expected to come from business in China. Therefore, our business and prospects will be tied to China’s economic, political and legal development.

China’s economy has quickly developed over the past 20 years. The Chinese government has taken many measures to balance the economic development and the allocation of resources. Some measures may have adverse effect on our industry. For example, the government’s excessive investment control and changes in tax law may have adverse impacts on us.
 
China’s economy had been changed from a planned economy into a market economy. In recent years, the government has taken many measures to strengthen market forces to reduce state-owned assets and set up joint ventures. However, a great portion of Chinese assets still remains controlled by the government. In addition, the government plays a great role in industrial development. The great level of interference of government in the business and industrial development might have an adverse impact on us because we are not part of the state-owned business, and our relationship with the governmental authorities might not be as strong as those state-owned enterprises.
 
China’s regulation of foreign currency exchange and cash out-flow may prevent us from remitting profits and dividends to the United States.
 
 
 
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China has adopted complicated rules that govern foreign currency exchange and cash out-flow. Although we believe we meet the requirements of those rules, we may not be able to remit all of our profits to the United States and distribute dividends to our shareholders if those rules are substantially changed to restrict the cash out-flow.  Foreign currency exchange rate changes might also have negative impact on our financial performance.
 
We may face the hindrance of China’s bureaucratic system.
 
Foreign companies face the political, economic and legal risks when developing business in China. China’s bureaucratic system might hinder investment from foreign countries.
 
The legal system in China has some uncertainties, which may affect the implementation of laws.
 
The legal system in China is a system of civil laws, based on provisions and written codes, therefore precedents and cases are not binding on the future decisions of the courts. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general and encourage foreign investment in China.  Although the influence of the law has been increasing, in certain rural areas the legal system and its enforcement are not well implemented.  In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience on new business and new polices or regulations in certain less developed areas causes uncertainty and may affect our business.   In some provincial areas, the government agencies and the courts are protectionist and may not fully enforce contractual rights against local parties.  In certain areas, the intellectual property and trade secret protections are not as effective as those in the other areas in China or in the U.S. in general.  Consequently, we cannot clearly foresee the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in the less developed areas in China. The uncertainties, including new laws and regulations and changes of existing laws, as well judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible problems to foreign investors.
 
Where You Can Find More Information
 
We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
 
 

ITEM 2. PROPERTIES

As of January 31, 2012, we leased an office space at 1404 E Joppa Road, Towson, MD 21286, the monthly rent for this office space is $ 2,500 . We also leased a show room located at 706 N. Crain Highway, Glen Burnie, MD, 21076 and the monthly rent for the show room is $ 1,062.75.


ITEM 3. LEGAL PROCEEDINGS
 
We are not a party to any legal proceedings that we believe will have a material adverse effect upon the conduct of our business or our financial position.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
There were no matters submitted to our stockholders during the year ended January 31, 2012.
 
 
 
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PART II
 
ITEM 5. MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.


Our common stock is currently traded on the Over-the-Counter Bulletin Board under the symbol “LNDG.” (“RFXC” prior to April 19, 2010). 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. Therefore, we changed our symbol to LNDG to reflect both the name change and the forward stock split.

Dividend Policy

We did not pay any cash dividends on our common stock in the year ended January 31, 2012. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and the expansion of our business.

Recent Sales of Unregistered Securities

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.

Equity Compensation Plan Information

We do not have any equity compensation plan as of January 31, 2012

ITEM 6.  SELECTED FINANCIAL DATA.
 
Not applicable.
 
ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.   These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.


Overview

We mainly engage in the research and development of hydrogen and oxygen generation technologies, designing, manufacturing and selling hydrogen and oxygen generating machines and the related industrial and commercial applications. 
 
 
 
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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.
 
 
 
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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
 
 
 
10

 

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
January 31,
   
For the Year ended
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 )


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.


 
11

 

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  
                 

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  


 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.
 

 
 
12

 

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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See the financial statements annexed to this annual report immediately after the signature page.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 
(a)  
Dismissal of Silberstein Ungar, PLLC

On November 30, 2011 (the "Dismissal Date"), the Board of Directors of Landmark Energy Enterprise, Inc (the "Registrant") dismissed Silberstein Ungar, PLLC as its independent registered public accounting firm.

The reports of Silberstein Ungar, PLLC on the Company’s financial statements for the years ended October 31, 2010 and 2009 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. The reports did include an explanatory paragraph about the uncertainty of the Registrant's ability to continue as a going concern. During the Registrant's two most recent fiscal years and the subsequent interim periods through to the Dismissal Date, there were no disagreements (as defined in Item 304 of Regulation S-K) with Silberstein Ungar, PLLC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Silberstein Ungar, PLLC, would have caused it to make reference in connection with any opinion to the subject matter of the disagreement. Further, during the Registrant's most recent fiscal year and the subsequent interim periods through to the Dismissal Date, there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

(b) Engagement of Patrizio & Zhao, LLC

On November 30, 2011 (the "Engagement Date"), the Registrant's Board of Directors approved the appointment of Patrizio & Zhao, LLC, an independent registered public accounting firm which is registered with, and governed by the rules of, the Public Company Accounting Oversight Board, as the Registrant's independent registered public accounting firm. During the Registrant's two most recent fiscal years, the subsequent interim periods thereto, and through the Engagement Date, neither the Registrant nor anyone on its behalf consulted the Patrizio & Zhao, LLC regarding either (1) the application of accounting principles to a specified transaction regarding the Company, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements; or (2) any matter regarding the Company that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
 
 
 
13

 


ITEM 9A. CONTROLS AND PROCEDURES.

Management’s Report on Internal Control over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
 
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of January 31, 2012, the Company’s internal control over financial reporting was not effective because we mistakenly failed to include a management’s report on internal control over financial reporting in the Form 10-K for year ended October 31, 2010 and an effective internal control would have detected the omission of such material information.

The management has also determined that our internal control over financial reporting was subject to the material weaknesses of inadequate staffing and supervision within the accounting operations of our company: the relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.

The Company’s management has identified the steps necessary to address the material weaknesses existing in the year ended January 31, 2012 described above, as follows:

1.     Hiring additional accounting and operations personnel and engaging outside contractors with technical accounting expertise, as needed, and reorganizing the accounting and finance department to ensure that accounting personnel with adequate experience, skills and knowledge relating to complex, non-routine transactions are directly involved in the review and accounting evaluation of our complex, non-routine transactions;

2.     Involving both internal accounting and operations personnel and outside contractors with technical accounting expertise, as needed, early in the evaluation of a complex, non-routine transaction to obtain additional guidance as to the application of generally accepted accounting principles to such a proposed transaction. 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of January 31, 2012.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer.   We mistakenly failed to include a management’s report on internal control over financial reporting in the Form 10-K for year ended October 31, 2010 and an effective disclosure control would have detected the omission of such material information.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of January 31, 2012, our disclosure controls and procedures were not effective.
 
 
 
14

 

Changes in Internal Controls
 
We have also evaluated our internal controls for financial reporting, and there have been no change in our internal control over financial reporting that occurred during the year ended January 31, 2012 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
 
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.


ITEM 9B. OTHER INFORMATION.
 
Not applicable.
 
 
 
15

 

PART III
 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Below are the names and certain information regarding our current executive officers and directors:

Name
 
Age
 
Current Position
Held Position Since
 
Nai Sung Chou
 
78
Director
As Director from December 09, 2009 to present
as Chief Executive Officer from December 09, 2009 to November 16, 2010
As President of the Board till February 16, 2012
Yidian Dong
 
60
Chief Executive Officer, Director, Treasurer of the Board
December 09, 2009 to present
As Chairman of the Board from March 29, 2012 to Present
As Chief Financial Officer from December 09, 2009 to March 29, 2012)
As Chief Executive Officer from November 16, 2010 to present
Di Zhang
 
40
Secretary, Director
 
December 09, 2009 to present
 
Zeming Su
33
Chief Financial Officer, Director
 
As Director from December 09, 2009 to present
As Chief Financial Officer from March 29, 2012 to Present
 
Te Hung Chou
40
Director
(no longer the Director of the Company)
December 09, 2009 to March 29, 2012
 
David Chung
76
Director (no longer the Director of the Company)
December 09, 2009 to March 29, 2012
 
Tonghuai Wang
50
Director
December 09, 2009 to present
 
Sue Zhao
40
Director
 
March 29, 2012 to Present
 
Pik Hang Lew
55
Director
March 29, 2012 to Present
 
 
Officers are elected annually by the Board of Directors, at our annual meeting, to hold such office until an officer's successor has been duly appointed and qualified, unless an officer sooner dies, resigns or is removed by the Board.

Background of Executive Officers and Directors

Nai Sung Chou earned his Bachelor’s degree in Mechanical Engineering from Nan Shan Institute of Industrial Technology, Taiwan, in 1954. He earned his Master’s degree in Business Administration from Soochow University, Taiwan in 1957. From 1958 to 1984, he was the president of Industrial Textile Mill, Yuan Shan Aquarium Restaurant, Rong Pin Restaurant, Yi Pin Import Export Trading Co Ltd, Rui Xiang Jewelry Co Ltd and Rong Tai Restaurant, respectively. From 1985 to 1988, he was the board director, chairman and operating officer of Hong Yuan Financial Group Ltd, Taiepei Tourism Association, Miss China Beauty Pageant, and the International Miss Wonder Beauty Pageant, respectively. From 1991 to 1994, he was the president, CEO and chairman of Milan Fashion & Clothing Co, Ltd, Dalian International Fashion Festival and Guoda Jewelry Co Ltd, respectively.

Yidian Dong earned his Bachelor’s degree in Chinese Literature from Fuzhou Normal University, China, in 1979. He was the president of Three River Groups Co from 1984 to 1987. From 1987 to 2003, he developed his career in food service industry and became the owner and operating officer of Great Wall Restaurant, Good Taste Cake Manufacture and Wholesole Co., Great Fortune Buffet Restaurant and Jade Garden Buffet Restaurant, respectively. Since 2005, he has been engaged in business in commercial real estate development in New York.

Di Zhang earned her Bachelor’s degree in Accounting from Beijing Normal University, China, in 1994. She earned her Master’s degree in Business Administration from University of Baltimore in 2001. She was the accountan of Calberson Transportation LLC from 1994 to 1998. She was the accountant of Halliberton Beijing Branch from 1998 to 2000. She was the manager of Herbal Healthcare LLC from 2001 to 2005. Currently she is the accountant of Aquarius Energy LLC.
 
 
 
16

 

David Chung earned his Bachelor’s degree in Physics from National Taiwan University in 1958. He earned his Master’s and PhD’ degrees in Physics from University of British Columbia in 1962 and 1966, respectively. From 1966 to 1967, he was a research physicist at National Bureau of Standards in Washington, D.C. From 1967 to 2006, he was an Assistant Professor, Associate Professor and Professor at Howard University, respectively. David Chung’s research areas include solid state physics, low temperature physics, fiber optics, acoustics, fluid dynamics, magnetic fluids, the use of permanenet magnetes, condense matter nuclear science, electrochemmistry, hydrogen gas generations, and new energy research, etc. 

Zemin Su earned his Bachelor’s degree in Chemistry from Nankai University, China in 2001. He earned his Master’s degree in Chemistry from Pennsylvania State University in 2005. In 2008, he formed D & S Evergreen Corporation and has been the sole owner to present.

Te Hung Chou earned his academic degrees Business Administration Department and International Trade and Education Promotion Department, Taiwan Cultural University. He was the manager, deputy general manager, general manager and board director of Taiwan Carnews Advertising Company, CONOCO Oil Company Taiwan Branch, Taiwan Exclusive News Co, Ltd, Taiwan Standard Energy Tech Co Ltd, Tianyuan Tech Co Ltd, and Natural Power Energy Co Ltd, respectively. He is currently the general manager of China Dalian Aquarius Energy Co Ltd. De Hong Chou is the son of Nai Sung Chou, our President and Chief Executive Officer.

Tonghuai Wang graduated from the People’s Liberation Army Air Force Shanghai Political Academy, China, in 1983. From 1972 to 2000, he served in the Air Force of the People’s Liberation Army of China. In 2003, he became director of a Chinese local television station. In 2004, he became the Deputy General Manager of China Dalian Huaxi Co Ltd. From 2006 to present, he is the Deputy General Manager of China Dalian Aquarius Energy Co Ltd.

Pik Hang Lew graduated from Brooklyn College Designer School. He is experienced and specialized in designing jewelry, repair, and customer relations. From 1984 to 1985, he was sample maker for Salame. From 1985 to 1986, he was Sample maker for Salame. From 1987 to present, he was Manager of P.H Lee Jewelry.
 
Sue Zhao earned a Bachelor of Applied Science in Industrial Engineering in Information System from University of Toronto, Toronto, Canada. From July 1997 to May 1999, Sue Zhao worked as a Technical System Analyst for RBC Capital Market Financial Engineering. From May 1999 to January 2002, Sue Zhao was Application Developer for Goldman Sachs Group Private Wealth Management. From May 2003 to August 2006, Sue Zhao was Senior Programmer Analyst for Global Fixed Income Technology, Citigroup FX Front Office – FX Analytics & Smith Barney Asset Management. From August 2006 to September 2010, Sue Zhao was Senior Programmer Analyst for Barclay Capitals / Lehman Brothers Foreign Exchange Options Trading Technology. From October 2010 to present, Sue Zhao works in Metlife.


Corporate Governance Matters
 
Audit Committee
 
Currently we do not have an audit committee or committee performing similar functions.
  
Compensation Committee
 
Currently we do not have a compensation committee or committee performing similar functions.

Nominating Committee
 
Currently we do not have a nominating committee or committee performing similar functions.

Code of Ethics

Currently we have not adopted a code of ethics.
 
 
 
17

 


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10 percent; shareholders are required by the Securities and Exchange Commission regulations to furnish our Company with copies of all Section 16(a) reports they file.
 
To the Company's knowledge, based solely on a review of the copies of the reports furnished to the Company, our directors Di Zhang, Te Hung Chou, Sue Zhao, Pik Hang Lew and Zemin Su did not file Form 3s when they acquired shares of Company. Di Zhang, David Chung and Nai Sung Chou did not file Form 4s to report the change of their percentage of ownership.


ITEM 11. EXECUTIVE COMPENSATION
 
The following table sets forth all cash compensation paid by us to our principal executive officer for the year ended January 31, 2012

Summary Compensation Table

 
Name
 
Principal
Position
   
Salary
($)
 
Bonus
($)
 
Option
Awards
($)
 
All Other
Compensation
($)
 
Total
($)
 
 
Yidian Dong
 
 
Chief Executive Officer
 
   
8,000
per month
 
 
 
 
8,000
per month
 
 
Di Zhang
 
Secretary
   
8,000
per month
 
 
 
 
8,000
per month
 
 
 
Stock-Based Compensation
 
During the year ended January 31, 2012, none of our officers or other employees have been granted stock options or stock appreciation rights, or paid any other stock-based compensation, by our company or any of our subsidiaries.
 
Director Compensation

During the year ended January 31, 2012, none of the members of the board of directors receive compensation from Company for serving as board directors.

Outstanding Equity Awards at Fiscal Year End

There has been no outstanding equity awards at transition period ended January 31, 2012.
 
 
 
18

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
 
The following table sets forth certain information, as of January 31, 2012 with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.

 
Name and Address of Beneficial Owner
 
Number of Common Stock
Beneficially Owned
 
Percentage Of Common Stock
Outstanding (1)
     
Executive Officers and Directors
 
   
Nai Sung Chou
7700 Ridge Rd,
Hanover, MD 21076
 
1,438,000
8.36%
Yidian Dong
2222 Estridge Rd.
Timonium, MD 21093
 
4,032,000
23.44%
Di Zhang
107 Edgerton Rd.
Towson, MD 21286
 
1,050,000
6.10%
Te Hung Chou
(Former Director)
7700 Ridge Rd,
Hanover, MD 21076
 
480,000
2.79%
Zemin Su
125 Clemson Ct.
State College, PA 16803
 
480,000
2.79%
David Chung
(Former Director)
133 Wooton Oaks Ct.
Rockville, MD 20852
 
215,000
1.25%
Sue Zhao
187 Warren St. #408
Jersey City, NJ 07302
 
70,000
0.41%
Pik Hang Lew
15005 Damson Ter
North Potomac, MD 20878
310,000
1.80%
     
Total
 
8,075,000
46.95%
(1) Calculated based on 17, 200,000 shares of common stock issued and outstanding as of January 31, 2012.
 
 
 
 
19

 

 
Name and Address of Beneficial Owner
 
Number of Common Stock
Beneficially Owned
 
Percentage Of Common Stock
Outstanding (1)
     
5% or More Stockholders
 
   
Nai Sung Chou
7700 Ridge Rd,
Hanover, MD 21076
 
1,438,000
8.36%
Yidian Dong
2222 Estridge Rd.
Timonium, MD 21093
 
4,032,000
23.44%
Di Zhang
107 Edgerton Rd.
Towson, MD 21286
 
1,050,000
6.10%
Xiu Lin
2222 Estridge Rd.
Timonium, MD 21093
 
963,160
5.60%
Hekong Ni
338 Oak Manor Dr.
Glen Bumie, MD 21061
1,112,160
6.47%
     
Total
8,595,320
49.97%

(1) Calculated based on 17, 200,000 shares of common stock issued and outstanding as of January 31, 2012.

Securities Authorized for Issuance under Equity Compensation Plans
 
The Company had no equity compensation plans for the year ended January 31, 2012.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

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.
 
 
 
20

 
 
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.

The above described transactions are “related Person Transaction” because Te-Hung Chou, who was the director and general manager of Dalian Aquarius, was also at the same time the director and shareholder of Company. He is the son of Nai Sung Chou, our largest shareholder and president of the board.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


1) Audit Fees
 
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

Year Ended
January 31, 2011
9,250
Silberstein Ungar, PLLC
 
Year Ended
January 31, 2012
9,250
Silberstein Ungar, PLLC
 
Year Ended
January 31, 2012
15,000
Patrizio & Zhao, LLC
 
 
 
21

 

 
ITEM 15. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.
 
Description
     
3.1
 
Articles of Incorporation (1)
     
3.2
 
Bylaws (1)
     
10.1
 
Affiliate Stock Purchase Agreement (2)
     
10.2
 
Share / Ownership Transfer Agreement (3)
     
10.3
 
Agreement of Rescission (4)
     
10.4
 
Patent and Assets Transfer Agreement (3)
     
10.5
 
License and Manufacture Agreement (3)
     
31.1
 
Section 302 Certificate of Chief Executive Officer
     
31.2
 
Section 302 Certificate of Chief Financial Officer
     
32.1
 
Section 906 Certificate of Chief Executive Officer
     
32.2
 
Section 906 Certificate of Chief Financial Officer

101 
 
Interactive data files pursuant to Rule 405 of Regulation S-T. 

 
(1) Incorporated by reference to the Form SB-2 registration statement filed on November 28, 2007.
(2) Incorporated by reference to the Report on Form 8-K as filed on December 11, 2009. 
(3) Incorporated by reference to the Report on Form 8-K as filed on September 23, 2010.
(4) Incorporated by reference to the Report on Form 8-K as filed on February 7, 2011.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Landmark Energy Enterprise Inc

By:
/s/Yidian Dong
 
Yidian Dong
 
Chief Executive Officer
Director, Chairman of the Board
 
 
May 15, 2012
 

 
 
22

 

ANNEX

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

LANDMARK ENERGY ENTERPRISE, INC

CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2012 AND 2011
 
 
 
 
23

 

LANDMARK ENERGY ENTERPRISE, INC 

Consolidated Financial Statements
January 31, 2012 and 2011
 
Table of Contents

Page
Consolidated Financial Statements
 
Report of Independent Registered Public Accounting Firm
1
Consolidated Balance Sheets
2
Consolidated Statements of Operations and Comprehensive Loss
3
Consolidated Statements of Changes in Stockholders’ deficit
4
Consolidated Statements of Cash Flows
5
Notes to Consolidated Financial Statements
6

 
 
 
24

 
 
Patrizio & Zhao, LLC

Certified Public Accountants and Consultants          322 Route 46 West 
  Parsippany, NJ 07054 
07054   
  Tel:  (973) 882-8810 
Member of   
Fax: (973) 882-0788
Alliance of worldwide accounting firms   www.pzcpa.com 
    
Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Landmark Energy Enterprise, Inc.


We have audited the accompanying consolidated balance sheets of Landmark Energy Enterprise, Inc. (the “Company”) as of January 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these 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 financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial position of Landmark Energy Enterprise, Inc. as of January 31, 2012 and 2011, and the consolidated results of their operations and their consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 11 to the financial statements, the Company does not have sufficient revenues to support its cost of operations, and there are no guarantees that the Company will be able to secure financing until a new source of revenue can be established. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 11. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Patrizio & Zhao, LLC

Parsippany, New Jersey
May 15, 2012
 
 
 
1

 
 
LANDMARK ENERGY ENTERPRISE, INC 


Consolidated Balance Sheets

   
January 31,
   
January 31,
 
   
2012
   
2011
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 19,466     $ 7,939  
Inventory
    18,032       -  
Loan to related party
    -       30,000  
Notes receivable
    177,603       177,603  
Prepaid VAT tax
    14,766       -  
Other current assets
    8,486       95  
Total current assets
    238,353       215,637  
                 
Property and equipment, net
    33,026       -  
                 
Total assets
  $ 271,379     $ 215,637  
                 
Liabilities and stockholders’ deficit
               
Current liabilities:
               
Accrued expenses
  $ 745,597     $ 405,250  
Due to officers
    257,707       81,500  
Advance from customer
    23,865       -  
Total current liabilities
    1,027,169       486,750  
                 
Convertible notes payable to stockholders
    480,000       455,000  
                 
Total liabilities
    1,507,169       941,750  
                 
Commitments and contingencies
    -       -  
                 
Stockholders’ deficit:
               
Preferred stock, $.001 par value, 10,000,000
               
  shares authorized, 0 shares issued and outstanding
    -       -  
Common stock, $.001 par value, 90,000,000 shares
               
  authorized, 17,200,000 shares issued and outstanding
    17,200       17,200  
Additional paid-in capital
    41,800       41,800  
Retained deficit
    (1,295,415 )     (785,113 )
Accumulated other comprehensive income
    625       -  
Total stockholders’ deficit
    (1,235,790 )     (726,113 )
                 
Total liabilities and stockholders’ deficit
  $ 271,379     $ 215,637  
                 

The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
2

 

LANDMARK ENERGY ENTERPRISE, INC 

 
Consolidated Statements of Operations and comprehensive loss

   
January 31,
   
January 31,
 
   
2012
   
2011
 
             
Sales
  $ 212,233     $ -  
                 
Cost of sales
    107,400       -  
                 
Gross profit
    104,833       -  
                 
Operating expenses:
               
Selling expenses
    17,164       -  
General and administrative expenses
    600,147       688,745  
Total operating expenses
    617,311       688,745  
                 
Loss from operations
    (512,478 )     (688,745 )
                 
Other income
               
Interest income
    2,176       132  
Total other income
    2,176       132  
                 
Loss before provision for income taxes
    (510,302 )     (688,613 )
                 
Provision for income taxes
    -       -  
                 
Net loss
    (510,302 )     (688,613 )
                 
Other comprehensive income
               
Foreign currency translation adjustment
    625       -  
                 
Comprehensive loss
  $ (509,677 )   $ (688,613 )
                 
Weighted average number of common shares outstanding
               
Basic and diluted
    17,200,000       17,200,000  
                 
Loss per common share
               
Basic
  $ (0.03 )   $ ($0.04 )
Diluted
  $ (0.03 )   $ ($0.04 )


 
 
 
 
3

 
 
LANDMARK ENERGY ENTERPRISE, INC 

 
Consolidated Statements of Changes in Stockholders’ Deficit

                                       
Accumulated
       
                           
Additional
         
Other
   
Total
 
   
Preferred Stock
   
Common Stock
   
Paid-in
   
Retained
   
Comprehensive
   
Stockholders’
 
   
Shares
   
Par Valve
   
Shares
   
Par Valve
   
Capital
   
deficit
   
Income
   
Deficit
 
                                                 
Beginning Balance at February 1, 2010
    -       -       2,150,000     $ 2,150     $ 56,850     $ (96,500 )   $ -     $ (37,500 )
                                                                 
Net Loss
    -       -       -       -       -       (688,613 )     -       (688,613 )
                                                                 
Stock split 8:1
    -       -       15,050,000       15,050       (15,050 )     -       -       -  
                                                                 
Ending Balance at January 31, 2011
    -       -       17,200,000       17,200       41,800       (785,113 )     -       (726,113 )
                                                                 
Net Loss
    -       -       -       -       -       (510,302 )     -       (510,302 )
                                                                 
Other comprehensive income:
    -       -       -       -       -       -       -       -  
                                                                 
Foreign currency translation adjustment
    -       -       -       -       -       -       625       625  
                                                                 
Comprehensive loss
    -       -       -       -       -       -       -       (509,677 )
                                                                 
Ending Balance at January 31, 2012
    -       -       17,200,000     $ 17,200     $ 41,800     $ (1,295,415 )   $ 625     $ (1,235,790 )
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
4

 
 
LANDMARK ENERGY ENTERPRISE, INC 

Consolidated Statements of Cash Flows

   
For the Years Ended January 31,
 
   
2012
   
2011
 
Cash flows from operating activities:
           
Net loss
  $ (510,302 )   $ (688,613 )
Adjustments to reconcile net loss to
               
  Net cash used in operating activities:
               
    Depreciation
    5,976       -  
    Changes in current assets and current liabilities:
               
      Inventory
    (17,630 )     -  
      Prepaid VAT tax
    (14,436 )     -  
      Other current assets
    (8,252 )     905  
      Accrued expenses
    340,342       405,250  
      Advance from customer
    23,333       -  
    Total adjustments
    329,333       406,155  
                 
    Net cash used in operating activities
    (180,969 )     (282,458 )
                 
Cash flows from investing activities:
               
Acquisition of property and equipment
    (38,265 )     -  
Loan to related party
    30,000       -  
Investment deposit
    -       (30,000 )
Note receivable
    -       (177,603 )
    Net cash used in investing activities
    (8,265 )     (207,603 )
                 
Cash flows from financing activities:
               
Proceeds from convertible notes payable to stockholders
    25,000       455,000  
Loans from officers
    174,248       43,000  
    Net cash provided by  financing activities
    199,248       498,000  
                 
Effect of foreign currency translation on cash
    1,513       -  
                 
Net increase in cash and cash equivalents
    11,527       7,939  
                 
Cash and cash equivalents – beginning
    7,939       -  
                 
Cash and cash equivalents – ending
  $ 19,466     $ 7,939  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
5

 
 
 
Note 1 – Organization and Nature of Business
 
Landmark Energy Enterprise, Inc. (formerly Reflex, Inc.) (“Landmark”) was incorporated in Nevada on October 4, 2007. The accompanying consolidated financial statements include the financial statements of Landmark and its subsidiaries (collectively, the “Company”). The Company’s primary business is to research and develop hydrogen and oxygen generation technologies, design, manufacture and sell hydrogen and oxygen generating machines and the related industrial and commercial applications.
 
On September 15, 2010, Landmark entered into a share/ownership transfer agreement to acquire 30% ownership of Dalian Aquarius Energy Technology U.S.A. Co., Ltd (“Aquarius”). However, the Share/Ownership Transfer Agreement was never closed and the shares of Aquarius have not been transferred to the Company.
 
On October 20, 2011, the Company change the Company's fiscal year end from October 31 to January 31.
 
On January 14, 2011, the Company prepared a rescission agreement and sent it to all parties to the share/ownership transfer agreement. Upon the execution of such rescission agreement, the share/ownership transfer agreement will be officially terminated and rescinded.
 
On July 26, 2010, the Company initiated the process of forming a wholly owned subsidiary, Dalian Landmark Energy Technology Co, Ltd (“Dalian Landmark”) in Dalian, the People’s Republic of China;, the registration process was completed on February 1, 2012.
 
Note 2 – Summary of Significant Accounting Policies
 
Basis Of Presentation
 
The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United Stated of America (“US GAAP”). They include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
 
In preparing the accompanying consolidated financial statements, the Company evaluated the period from January 31, 2012 through the date the consolidated financial statements were issued for material subsequent events requiring recognition or disclosure. Events identified for this period are described in Note 14.
 
Use of Estimates
 
The preparation of financial statements in accordance with US GAAP 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include useful lives and income taxes. Actual results could differ from those estimates.
 
Cash and Cash Equivalents

In accordance with FASB ASC Topic 230, "Statement of Cash Flows", the Company considers all highly liquid instruments with original maturities of three months or less to be “cash equivalents”.

Inventory

Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value, if any. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required that could negatively impact the company’s gross margin and operating results. As of January 31, 2012 and 2011, no provisions were deemed necessary as no obsolete and slow-moving inventories were observed.
 
 
 
6

 

Note 2 – Summary of Significant Accounting Policies (continued)

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets as follows:

   
Estimated Useful Life
Electronic equipment
 
3 years
Machinery and equipment
 
5 years
Vehicles
 
4 years

Cost of repairs and maintenance is expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of operations and comprehensive income.

Revenue Recognition

Revenue is recognized in accordance with SAB No. 104, “Revenue Recognition” (codified under ASC 605 “Revenue Recognition”). It provides that revenue be recognized when products are shipped, title and risk of loss is passed to the customers and collection is reasonably assured. Payments received prior to the satisfaction of above criteria are deferred.

Income Taxes

Income taxes are accounted for under the asset and liability method. 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, and operating loss and tax credit carry forwards. 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.

A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. For the years ended January 31, 2012 and 2011, no differences were noted between the book and tax bases of the Company’s assets and liabilities, and therefore no deferred tax assets or liabilities were recorded.

Value Added Taxes

Under the Provisional Regulations of the PRC’s Value Added Tax (“VAT”) law, the Company is responsible for collecting VAT on sales of products and paying VAT on purchases of raw materials. Sales and cost of sales are reported net of VAT. At the end of each month, a net amount in favor of sales VAT is remitted to the central government while a net amount in favor of purchase VAT is carried forward to offset future sales VAT.

Fair Value of Financial Instruments

The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date;
 
Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data;
 
Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions of what the market participants would use in pricing the asset or liability based on the best available information.
 
 
 
7

 
 
Note 2 – Summary of Significant Accounting Policies (continued)

The carrying amounts reported in the balance sheets for cash, other receivables, accrued expenses and other obligations approximate their fair market value based on the short-term maturity of these instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to the Company. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with ASC 820.

Foreign Currency Translation and Transactions

The Company has evaluated the determination of its functional currency based on the guidance in ASC Topic, “Foreign Currency Matters,” which provides that an entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash.

On its own, the Company raises financing in the U.S. dollar, pays its own operating expenses primarily in the U.S. dollar. Therefore, it has been determined that the Company’s functional currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5.

The Company uses United States dollars (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in Renminbi (“RMB”), the currency of China, the economic environment in which the Company’s primary subsidiaries conduct their operations. Assets and liabilities of the subsidiaries in RMB are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income.

The exchange rates used to translate amounts in RMB into US Dollars for the purposes of preparing the condensed combined financial statements were as follows:
 
 
January 31, 2012
January 31, 2011
Balance sheet items, except for stockholders’
   
  equity items
RMB 1: US$ 0.1591
RMB 1: US$ 0.1519
     
Amounts included in the statements of operations
   
  and comprehensive income, and statements of
   
  cash flows
RMB 1: US$ 0.1555
RMB 1: US$ 0.1483
     
Stockholders’ equity items
Historical rate
Historical rate
 
Comprehensive Income

The Company has adopted FASB ASC Topic 220, “Reporting Comprehensive Income”, which establishes rules for the reporting and display of comprehensive income, its components and accumulated balances. ASC 220 defines comprehensive income to include all changes in equity, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on available-for-sale securities, except those resulting from
 
Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-12, Comprehensive Income (Topic 220) (“ASU 2011-12”). ASU 2011-12 allows deferral of the effective date for amendments to the presentation of reclassifications of items out of accumulated other comprehensive income in ASU No. 2011-05. This update is effective at the same time as the amendments in ASU No. 2011-05. The adoption of this ASU will not have a material impact on the Company’s financial statements.
 
 
 
8

 
 
 
Note 2 – Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In December 2011, FASB issued ASU No. 2011-11, Balance Sheet (Topic 210) (“ASU 2011-11). ASU 2011-11 provides enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. The objective of this update is to facilitate comparison of entities that prepare their financial statements on the basis of U.S. generally accepted accounting principles (“GAAP”) with those preparing their financial statements on the basis of International Financial Reporting Standards (“IFRS”). ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU will not have a material impact on the Company’s financial statements.

In June 2011, FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) (“ASU 2011-05). ASU 2011-05 provides guidance on presentation of comprehensive income with an objective to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. To increase the prominence of items reported in other comprehensive income and to facilitate convergence of GAAP and IFRS, FASB decided to eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, among other amendments in ASU 2011-05. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this ASU will not have a material impact on the Company’s financial statements.

In May 2011, FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) (“ASU 2011-04). ASU 2011-04 provides amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments are effective for public entities for interim and annual periods beginning after December 15, 2011, and should be applied prospectively. Early adoption is not permitted for public entities. The adoption of this ASU will not have a material impact on the Company’s financial statements.

Reclassification

Certain amounts as of January 31, 2011 were reclassified for comparative presentation purposes.

Note 3– Inventory

Inventory by major categories as of January 31, 2012 and 2011  is summarized as follows:
 
     
January 31, 2012
   
January 31, 2011
 
               
 
Raw materials
  $ 9,167     $ -  
 
Supplies
    8,865       -  
 
    Total Inventory
  $ 18,032     $ -  

Note 4– Notes Receivable

On October 12, 2010, Landmark loaned $174,075 to Aquarius. The loan is unsecured, bears 1% interest and is due on demand.  On December 15, 2010, Landmark loaned $3,528 to a third party entity. The loan is unsecured, non-interest bearing and is due on demand.

Note 5 – Property and Equipment

Property and equipment as of January 31, 2012 and 2011 consisted of the following:
 
 
 
9

 

     
January 31, 2012
   
January 31, 2011
 
               
 
Electronic equipment
  $ 5,782     $ -  
 
Machinery and equipment
    13,565       -  
 
Vehicles
    19,791       -  
 
    Subtotal
    39,138       -  
 
  Less: Accumulated depreciation
    6,112       -  
 
  Total
  $ 33,026     $ -  

 
Depreciation expense for the years ended January 31, 2012 and 2011 was $5,976 and -0-, respectively.
 
Note 6 – Accrued Expenses

Accrued expenses as of January 31, 2012 and 2011 consisted of the following:

     
January 31, 2012
   
January 31, 2011
 
               
 
Accrued wages
  $ 588,585     $ 377,000  
 
Accrued rent
    52,500       22,500  
 
Accrued accounting & audit fee
    104,512       5,750  
 
    Total accrued expenses
  $ 745,597     $ 405,250  
 
The carrying value of the current portion of accrued expenses approximates fair value due to the shrot-term nature of these obligations.
 
Note 7 – Due to Officers

The executive officers of the Company Tonghuai Wang, Di Zhang, Pik Hang Lew and Yidian Dong from time to time, provide non-interest bearing advances to the Company for working capital. As of January 31, 2012 and 2011, the Company owes an amount of $257,707 and $81,500, respectively, to the executive officers.
 
During the period ended October 31, 2010, a former officer agreed to convert the prior balance due to the officer of $16,000 to capital.  The amount has been recorded as additional paid in capital as of January 31, 2011.
 
Note 8– Convertible Notes Payable to Stockholders

The Company 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 common stock at $1.00 per share at any time by the note holders.  The loans are 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.
 
Note 9 – Common Stock

The Company has 90,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock authorized.
 
On April 19, 2010, the Company declared an 8:1 stock split which has been presented retroactively in the statement of changes in stockholders’ deficit and the weighted average shares outstanding calculation.
 

 
10

 
 
The Company has 17,200,000 shares of common stock and -0- shares of preferred stock issued and outstanding as of January 31, 2012.
 
Note 10 – Commitments and Contingencies

The corporate office lease requires rent of $2,500 per month through January 31, 2012 and month to month thereafter.
 
The show room lease requires monthly rent of approximately $1,063 through January 31, 2012 and month to month thereafter.
 
Neither lease required a security deposit.  Accrued rent on the office lease was $52,500 and $ 30,000 as of January 31, 2012 and January 31, 2011.
 
The Company also entered into three employment agreements on January 1, 2010.  The agreements call for total monthly wages of $28,000 beginning February 1, 2010. On March 31, 2011, one employment agreement terminated and the monthly wages decrease to $20,000. The minimum annual wages due on these agreements for the year ended January 31, 2012 was $240,000.
 
The total amount accrued for the above contracts was $745,597 and $405,250 as of January 31, 2012 and January 31, 2011, respectively.
 
Note 11 – Liquidity and Going Concern

The Company has negative working capital and has incurred losses since inception.  These factors create a substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
 
The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling its equity securities and obtaining debt financing to fund requirement and ongoing operations; however, there can be no assurance that the Company will be successful in these efforts.
 
Note 12 – Concentration of Credit Risk
 
For the year ended January 31, 2012, all of the Company’s sales arose in the PRC.China.  For the year ended January 31, 2012, no single vendor accounted for more than 10% of the Company’s raw materials.

For the year ended January 31, 2012, two major customers accounted for approximately 97% for the Company’s sales for the year ended January 31, 2012. Total sales to these customers were $ 206,201 for the year ended January 31, 2012.
 
 
 
11

 

Financial instruments which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions where the Company maintains its cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments.

Note 13 – Income Taxes

As of January 31, 2012, the Company had net operating loss carry forwards of approximately $1,295,415 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is not likely to occur.

Note 14 – Loss Per Share

The Company presents loss per share on a basic and diluted basis. Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss by the weighted average number of shares outstanding plus the dilutive effect of potential securities.

   
For the Years Ended
 
   
January 31
 
   
2012
   
2011
 
             
Net loss
  $ (510,302 )   $ (688,613 )
                 
Weighted average common shares
    17,200,000       17,200,000  
  (denominator for basic loss per share)
               
                 
Effect of dilutive securities:
               
                 
Weighted average common shares
    17,200,000       17,200,000  
  (denominator for diluted loss per share)
               
                 
Basic loss per share
  $ (0.03 )   $ (0.04 )
Diluted loss per share
  $ (0.03 )   $ (0.04 )

 
Note 15 – Subsequent event
 
On February 10, 2012, the notes payable to six shareholders in the amount of 42,000 were assigned to Tonghuai Wang, an executive officer of Dalian. The company fully consents to the assignment of loans and acknowledges that the assigned loans have the same terms binding upon the Company.
 
 
 
12

 
 

 


PINX:LNDG Landmark Energy Enterprise Inc Annual Report 10-K/A Filling

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PINX:LNDG Landmark Energy Enterprise Inc Annual Report 10-K/A Filing - 1/31/2012
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