**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-QSB**

 

| x | Quarterly report under Section 13 or 15(d) of the                            Securities Exchange Act of 1934 |
|---|--------------------------------------------------------------------------------------------------------------|

For the quarterly period ended May 31, 2007

 

| o | Transition report under Section 13 or 15(d) of the                            Securities Exchange Act of 1934 |
|---|---------------------------------------------------------------------------------------------------------------|

For the transition period from ______to ______

 

Commission file number:**000-25591**

 

| **CHINA ELITE INFORMATION CO., LTD.**                                             |
|-----------------------------------------------------------------------------------|
|                                                                                   |
| (Exact name of Registrant as Specified in its                            Charter) |

 

 

| **BRITISH VIRGIN ISLANDS**                                    |   | **11-3462369**                   |
|---------------------------------------------------------------|--------|----------------------------------|
|                                                               |   |                                  |
| (State or other jurisdiction ofincorporation or organization) |   | (IRS EmployerIdentification No.) |

 

 

| **c/o DeHeng Chen Chan, LLC, 225 Broadway, Suite 1910,                            NY, NY** | **10007**  |
|--------------------------------------------------------------------------------------------|------------|
|                                                                                            |            |
| (Address of Principal Executive Offices)                                                   | (Zip Code) |

 

 

| **(212) 608-6500**                                                                    |
|---------------------------------------------------------------------------------------|
|                                                                                       |
| (Registrant’s telephone number, including area                            code) |

 

 

Check whether the issuer (1) filed all reports required to be filed by            Section 13 or 15(d) of the Securities 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 past 90 days. YesxNo            o

 

Indicate by check mark whether the registrant is a shell company (as            defined by Rule 12b-2 of the Exchange Act). YesxNo o

 

State the number of shares outstanding of each of the issuer’s            classes of common stock, as of the latest practicable date: As of July 6, 2007, there            were 11,200,000 shares of common stock outstanding.

 

| Transitional Small Business Disclosure Format (Check                            one): Yes o                              | Nox |
|------------------------------------------------------------------------------------------------------------------------------------|-----|

 

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**CHINA ELITE INFORMATION CO., LTD.**

**FORM 10-QSB**

**FOR THE THREE MONTHS ENDED MAY 31, 2007**

 

**INDEX**

 

**Page**

**Number**

 

| **PART                            I.     FINANCIAL                            INFORMATION** | 1 |
|----------------------------------------------------------------------------------------------------------------------|---|

|   | Item 1. | Financial                            Statements | 1 |
|--------|---------|-------------------------------------------------|---|

|   | Interim                            Balance Sheet | 1 |
|--------|--------------------------------------------------|---|

|   | Interim                            Statements of Operations | 2 |
|--------|-------------------------------------------------------------|---|

|   | Interim                            Statements of Cash Flows | 3 |
|--------|-------------------------------------------------------------|---|

|   | Notes to                            Interim Financial Statements | 4 |
|--------|------------------------------------------------------------------|---|

|   | Item 2. | Management’s Discussion and Analysis                            or Plan of Operations | 5 |
|--------|---------|---------------------------------------------------------------------------------------------|---|

|   | Item 3. | Controls                            and Procedures | 6 |
|--------|---------|----------------------------------------------------|---|

| **PART                            II.** |   | **OTHER INFORMATION** | 7 |
|-----------------------------------------|--------|-----------------------|---|

|   | Item 1. | Legal                            Proceedings | 7 |
|--------|---------|----------------------------------------------|---|

|   | Item 2. | Unregistered Sales of Equity Securities                            and Use of Proceeds | 7 |
|--------|---------|----------------------------------------------------------------------------------------|---|

|   | Item 3. | Defaults                            Upon Senior Securities | 7 |
|--------|---------|------------------------------------------------------------|---|

|   | Item 4. | Submission                            of Matters to a Vote of Security Holders | 7 |
|--------|---------|--------------------------------------------------------------------------------|---|

|   | Item 5. | Other                            Information | 7 |
|--------|---------|----------------------------------------------|---|

|   | Item 6. | Exhibits | 7 |
|--------|---------|----------|---|

| **SIGNATURES** | 8 |
|----------------|---|

             

 

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| **PART** | **I.  FINANCIAL INFORMATION** |
|----------|------------------------------------|

 

| **Item 1.** | **Financial Statements** |
|-------------|--------------------------|

 

**CHINA ELITE INFORMATION CO., LTD.**

(A            Development Stage Company)

**INTERIM BALANCE SHEET**

 

| (Expressed in U.S.                            Dollars)                                                   |        |        |        | May 31,                            2007                            (Unaudited) |        |        | November 30,                            2006                            (Audited) |        |
|----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|
|                                                                                                     |        |        |        |                                                                                |        |        |                                                                                   |        |
| **ASSETS**                                                                                               |   |   |   |                                                                                |   |   |                                                                                   |   |
| Current                        Assets                                                                    |   |   |
|    Prepayment                                                                             |   |   | $      | 204                                                                            |   | $      | —                                                                           |   |
|                                                                                                          |        |        |
|    Total current                        assets                                            |   |   |   | 204                                                                            |   |   | —                                                                           |   |
|                                                                                                          |        |        |
|                                                                                                     |   |   |
| Total                        assets                                                                      |   |   | $      | 204                                                                            |   | $      | —                                                                           |   |
|                                                                                                          |        |        |
| **LIABILITIES                        AND STOCKHOLDERS’ DEFICIENCY**                                |   |   |
| Current                        Liabilities                                                               |   |   |   |                                                                           |   |   |                                                                              |   |
|                                                                                                     |   |   |
|    Accounts payable                        and accrued expenses                           |   |   | $      | 7,286                                                                          |   | $      | 26,906                                                                            |   |
|    Loans from                        shareholder                                          |   |   |   | 383,493                                                                        |   |   | 319,541                                                                           |   |
|                                                                                                          |        |        |
|    Total current                        liabilities                                       |   |   |   | 390,779                                                                        |   |   | 346,447                                                                           |   |
|                                                                                                          |        |        |
|                                                                                                     |   |   |
| Commitments and                        Contingencies                                                     |   |   |   |                                                                           |   |   |                                                                              |   |
|                                                                                                     |   |   |
| Stockholders’                        Deficiency                                                    |   |   |
|    Preferred stock:                        $0.01 par value; 10,000,000 shares authorized; |   |   |   |                                                                           |   |   |                                                                              |   |
|       issued                        and outstanding: none                  |   |   |   | —                                                                        |   |   | —                                                                           |   |
|    Common stock: $0.01                        par value; 50,000,000 shares authorized;    |   |   |
|       issued                        and outstanding: 11,200,000            |   |   |   | 112,000                                                                        |   |   | 112,000                                                                           |   |
|    Additional paid in                        capital                                      |   |   |   | 154,465                                                                        |   |   | 154,465                                                                           |   |
|    Deficit accumulated                        during the development stage                |   |   |   | (657,040                                                                       | )      |   | (612,912                                                                          | )      |
|                                                                                                          |        |        |
|    Total                        stockholders’ deficiency                            |   |   |   | (390,575                                                                       | )      |   | (346,447                                                                          | )      |
|                                                                                                          |        |        |
|                                                                                                     |   |   |
| Total liabilities                        and stockholders’ deficiency                              |   |   | $      | 204                                                                            |   | $      | —                                                                           |   |
|                                                                                                          |        |        |

 

 

**See condensed notes to financial statements.**

 

1

 

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**CHINA ELITE INFORMATION CO., LTD.**

(A            Development Stage Company)

**INTERIM STATEMENTS OF OPERATIONS**

**(Unaudited)**

**For the three and six months ended May 31, 2007 and 2006,            and**

**for the period from inception (December 19, 1997) to May 31,            2007**

 

|                                                                                     | Cumulative                            from                            inception | Six months ended                        May 31, | Three months                        ended                        May 31, |
|-------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|-------------------------------------------------|--------------------------------------------------------------------------|
||
|                                                                                |                                                                                 |                                                 |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Revenues**                                                                        |                                                                            |                                            | $                                                                        | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **General and                        administrative expenses**                      |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|    Salaries and                        benefits                      |                                                                            |                                            |                                                                     | 181,888 |   |   | — |   |   | — |   |   | — |   |   | — |   |
|    General and                        administrative                 |                                                                            |                                            |                                                                     | 404,284 |   |   | 44,128 |   |   | 21,690 |   |   | 25,155 |   |   | 7,703 |   |
|    Consulting fees                        – related party      |                                                                            |                                            |                                                                     | 150,000 |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|    Total general and                        administrative expenses  |                                                                            |                                            |                                                                     | 736,172 |   |   | 44,128 |   |   | 21,690 |   |   | 25,155 |   |   | 7,703 |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Operating                        loss**                                           |                                                                            |                                            |                                                                     | (736,172 | ) |   | (44,128 | ) |   | (21,690 | ) |   | (25,155 | ) |   | (7,703 | ) |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Other income                        (expense)**                                   |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|    Loss on disposal of                        property and equipment |                                                                            |                                            |                                                                     | (1,473 | ) |   | — |   |   | — |   |   | — |   |   | — |   |
|    Interest                        expense                           |                                                                            |                                            |                                                                     | (53,956 | ) |   | — |   |   | — |   |   | — |   |   | — |   |
|    Interest                        income                            |                                                                            |                                            |                                                                     | 134,561 |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|    Total other income                        (expense)               |                                                                            |                                            |                                                                     | 79,132 |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Net                        loss**                                                 |                                                                            |                                            | $                                                                        | (657,040 | ) | $ | (44,128 | ) | $ | (21,690 | ) | $ | (25,155 | ) | $ | (7,703 | ) |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Basic and diluted                        net loss per share**                     |                                                                            |                                            |                                                                     |  |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |
|                                                                                |                                                                            |                                            |                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Weighted average                        shares outstanding**                      |                                                                            |                                            |                                                                     |  |   |  | 11,200,000 |   |   | 11,200,000 |   |   | 11,200,000 |   |   | 11,200,000 |   |
|                                                                                     |                                                                                 |                                                 |                                                                          |  |  |

 

 

**See condensed notes to financial statements.**

 

2

 

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**CHINA ELITE INFORMATION CO., LTD.**

(A            Development Stage Company)

**INTERIM STATEMENTS OF CASH FLOWS**

**(Unaudited)**

**For the three and six months ended May 31, 2007 and 2006,            and**

**for the period from inception (December 19, 1997) to May 31,            2007**

 

|                                                                                                                                     |        |        |        | Cumulative                            from                            inception |   | Six months ended                        May 31, |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------|--------|-------------------------------------------------|
||
|                                                                                                                                |   |   |   |                                                                                 |   |                                            |  |   |   |  |   |
| Cash flows from                        operating activities                                                                         |   |   |   |                                                                            |   |                                            |   |   |   |   |   |
| **Net                        loss**                                                                                                 |   |   | $      | (657,040                                                                        | )      | $                                               | (44,128 | ) | $ | (21,690 | ) |
|                                                                                                                                     |        |        |        |
|    **Adjustments to                        reconcile net loss to net cash flows used in**                            |   |   |   |                                                                            |   |                                            |   |   |   |   |   |
|      **operating                        activities**                                                       |   |   |   |                                                                            |   |                                            |   |   |   |   |   |
|    Depreciation and                        organization costs                                                        |   |   |   | 11,492                                                                          |   |                                            | — |   |   | — |   |
|    Loss on disposal of                        property and equipment                                                 |   |   |   | 1,473                                                                           |   |                                            | — |   |   | — |   |
|    Common stock issued                        for services                                                           |   |   |   | 48,400                                                                          |   |                                            | — |   |   | — |   |
|        (Increase)                        decrease in interest receivable                         |   |   |   | (1,483                                                                          | )      |                                            | — |   |   | — |   |
|        (Increase)                        decrease in prepayment                                  |   |   |   | (204                                                                            | )      |                                            | (204 | ) |   | (175 | ) |
|         Increase                        (decrease) in accounts payable and accrued expenses |   |   |   | 7,286                                                                           |   |                                            | (19,620 | ) |   | (10,383 | ) |
|                                                                                                                                     |        |        |        |
| Net cash flows used                        in operating activities                                                                  |   |   |   | (590,076                                                                        | )      |                                            | (63,952 | ) |   | (32,248 | ) |
|                                                                                                                                     |        |        |        |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| **Cash flows                        from investing activities**                                                                     |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
|    Cash paid for note                        receivable                                                              |   |   |   | (1,117,602                                                                      | )      |                                            | — |   |   | — |   |
|    Cash received from                        note receivable                                                         |   |   |   | 1,117,602                                                                       | )      |                                            | — |   |   | — |   |
|    Cash paid for                        equipment                                                                    |   |   |   | (11,465                                                                         | )      |                                            | — |   |   | — |   |
|                                                                                                                                     |        |        |        |
| Net cash flows used                        in investing activities                                                                  |   |   |   | (11,465                                                                         | )      |                                            | — |   |   | — |   |
|                                                                                                                                     |        |        |        |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| **Cash flows                        from financing activities**                                                                     |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
|    Loans from                        shareholder                                                                     |   |   |   | 397,890                                                                         |   |                                            | 63,952 |   |   | 32,248 |   |
|    Proceeds from                        issuance of stock                                                            |   |   |   | 1,531,250                                                                       |   |                                            | — |   |   | — |   |
|    Cash paid for stock                        redemption                                                             |   |   |   | (150,000                                                                        | )      |                                            | — |   |   | — |   |
|    Deferred offering                        costs against capital                                                    |   |   |   | (25,927                                                                         | )      |                                            | — |   |   | — |   |
|    Acquisition of                        treasury stock                                                              |   |   |   | (1,151,672                                                                      | )      |                                            | — |   |   | — |   |
|                                                                                                                                     |        |        |        |
| Net cash flows                        provided by financing activities                                                              |   |   |   | 601,541                                                                         |   |                                            | 63,952 |   |   | 32,248 |   |
|                                                                                                                                     |        |        |        |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| Increase (decrease)                        in cash and cash equivalents                                                             |   |   |   | —                                                                         |   |                                            | — |   |   | — |   |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| Cash and cash                        equivalents, beginning of period                                                               |   |   |   | —                                                                         |   |                                            | — |   |   | — |   |
|                                                                                                                                     |        |        |        |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| Cash and cash                        equivalents, end of period                                                                     |   |   | $      | —                                                                         |   | $                                               | — |   | $ | — |   |
|                                                                                                                                     |        |        |        |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| **Cash paid for                        interest and income taxes**                                                                  |   |   |   |                                                                            |   | $                                               | — |   | $ | — |   |
|                                                                                                                                |   |   |        |                                                                                 |        |                                                 |  |  |  |  |  |
| **Supplemental                        noncash investing and financing activities:**                                                 |   |   |   |                                                                            |   |                                            |   |   |   |   |   |
|    Common stock issued                        for services                                                           |   |   | $      | 48,400                                                                          |   | $                                               | — |   | $ | — |   |
|                                                                                                                                     |        |        |        |
|    Loans payable                        converted to additional paid in capital                                      |   |   | $      | 14,397                                                                          |   | $                                               | — |   | $ | — |   |
|                                                                                                                                     |        |        |        |

 

 

**See condensed notes to financial statements.**

 

3

 

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**CHINA ELITE INFORMATION CO., LTD.**

(A            Development Stage Company)

**NOTES TO INTERIM FINANCIAL STATEMENTS**

 

----

 

**NOTE            1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**

 

The            accompanying unaudited financial statements have been prepared in conformity with            generally accepted accounting principles in the United States of America. However,            certain information and footnote disclosures normally included in financial statements            prepared in accordance with generally accepted accounting principles have been omitted            or condensed pursuant to the rules and regulations of the Securities and Exchange            Commission (“SEC”). In the opinion of management, all adjustments of a            normal recurring nature necessary for a fair presentation have been included. The            results for interim periods are not necessarily indicative of results for the entire            year. These condensed financial statements and accompanying notes should be read in            conjunction with the Company’s annual financial statements and the notes thereto            for the fiscal year ended November 30, 2006 included in its Annual Report on Form            10-KSB.

 

**Loss Per Share**

 

Basic earnings or (loss) per share (“EPS”) is computed as            net loss divided by the weighted average number of shares outstanding during the period            in accordance with Statement of Financial Accounting Standards (“SFAS”) No.            128, “Earnings Per Share”. Diluted EPS includes the effect from potential            dilutive securities and is equal to basic loss per share for all periods presented            because there are no potential dilutive securities. All per share and per share            information is adjusted retroactively to reflect stock splits and changes in par            value.

 

**NOTE 2 – GOING CONCERN**

 

The            accompanying unaudited financial statements have been prepared in conformity with            generally accepted accounting principles in the United States of America, which            contemplates continuation of the Company as a going concern. However, the Company has            limited operations and has sustained substantial operating losses in recent years            resulting in a substantial accumulated deficit. The Company’s cash requirements            for working capital have been satisfied through loans from its majority shareholder and            the Company expects to obtain additional capital through shareholder loans and/or a            debt or equity financing to continue its operations. There is no assurance the Company            will be successful in raising the needed additional capital or that such additional            funds will be available for the Company on acceptable terms, if at all. The            Company’s President has orally agreed to fund its operations for the next twelve            months, based on the Company’s current level of expenditures, as necessary.            However, the Company’s need for capital may change dramatically if it acquires a            suitable business opportunity during that period. In view of these matters, the            continued existence of the Company is dependent upon its ability to meet its financing            requirements on a continuing basis and to succeed in its future operations.

 

Management’s plans are to identify and pursue profitable business            opportunities through mergers and acquisitions, so as to diversify the business risks            and maximize the returns to stockholders. Although the Company does not plan to limit            its options to any particular industry, the Company will initially target the telecom            industry in the People’s Republic of China (“PRC”), including the            Hong Kong market. Currently, the Company is exploring a possible transaction with            various telecom operators in the PRC. These telecom providers are principally engaged            in selling and distribution of telecom services and provision of value-added services,            including (but not limited

 

4

 

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to)            operating call centers, providing telemarketing services, customer relationship            management services, mobile applications and calling cards.

 

To            meet these objectives, the Company plans to seek potential merger candidates and            expects to raise additional capital, through private equity and/or debt investment in            order to support existing operations and expand the range and scope of its business.            There is no assurance that such additional funds will be available for the Company on            acceptable terms, if at all. Management believes that actions presently taken to revise            the Company’s operating and financial requirements provide the opportunity for            the Company to continue as a going concern. The Company’s ability to achieve            these objectives cannot be determined at this time. If the Company is unsuccessful in            its endeavors, it may have to cease operations.

 

**NOTE 3 – RELATED PARTY TRANSACTIONS**

 

Amount due to a stockholder of $383,493 at May 31, 2007 represents a            series of advances from the majority stockholder to fund working capital requirements.            There is no note and the amounts are unsecured, interest-free, and repayable on demand.            The Company’s President has orally agreed to fund the Company’s operations            for at least the next twelve months.

 

| **Item 2.** | **Management’s Discussion and Analysis or Plan of                            Operations** |
|-------------|-------------------------------------------------------------------------------------------------|

 

**PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

 

The            statements contained in this Form 10-QSB that are not purely historical are            forward-looking statements. These include statements about the Company’s            expectations, beliefs, intentions or strategies for the future, which are indicated by            words or phrases such as “anticipate”, “expect”,            “intend”, “plan”, “will”, “the Company            believes”, “management believes” and similar words or phrases. The            forward-looking statements are based on the Company’s current expectations and            are subject to certain risks, uncertainties and assumptions. The Company’s actual            results could differ materially from results anticipated in these forward-looking            statements. All forward-looking statements included in this document are based on            information available to the Company on the date hereof, and the Company assumes no            obligation to update any such forward-looking statements. Readers are also urged to            carefully review and consider the various disclosures made by the Company that are to            advise interested parties of the factors which affect the Company’s business, in            this report, as well as the Company’s periodic reports on Forms 10-KSB, 10-QSB            and 8-K filed with the Securities and Exchange Commission.

 

These risks and uncertainties, many of which are beyond our control,            include (i) the sufficiency of existing capital resources and the Company’s            ability to raise additional capital to fund cash requirements for future operations;            (ii) uncertainties involved in the acquisition of an operating business in targeted            industry and/or a targeted geographic region; (iii) the Company’s ability to            achieve sufficient revenues through an operating business to fund and maintain            operations; (iv) volatility of the stock market; and (v) general economic conditions.            Although the Company believes the expectations reflected in these forward-looking            statements are reasonable, such expectations may prove to be incorrect. Investors            should be aware that they could lose all or substantially all of their            investment.

 

5

 

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Management’s Plan of Operation

 

The            Company’s plan of operation for the next twelve months is to identify and acquire            a favorable business opportunity. The Company does not plan to limit its options to any            particular industry, but will evaluate each opportunity on its merits.

 

The            Company has not yet entered into any agreement, nor does it have any commitment to            enter into or become engaged in any transaction as of the date of this            filing.

 

The            management of the Company endeavors to identify and pursue profitable business            opportunities through mergers and acquisitions, so as to diversify the business risks            and maximize the returns to stockholders. Although the Company does not plan to limit            its options to any particular industry, the Company will initially target the telecom            industry in the People’s Republic of China (“PRC”), including the            Hong Kong market. Currently, the Company is exploring a possible transaction with            various telecom operators in the PRC. These telecom providers are principally engaged            in selling and distribution of telecom services and provision of value-added services,            including (but not limited to) operating call centers, providing telemarketing            services, customer relationship management services, mobile applications, and calling            cards.

 

The            management believes that, through the prospective mergers and acquisitions in the PRC,            the Company could accelerate its developing pace and benefit from the vast            opportunities brought by the continual growth in the PRC economy and the PRC’s            accession to the World Trade Organization in December 2001.

 

The            Company has no current plans to (i) purchase or sell any plant or equipment, (ii)            change the number of employees, or (iii) incur any significant research and development            expenses. The Company’s plans may change if it is able to identify and acquire a            suitable business acquisiton.

 

Capital Resources and Liquidity

 

The            Company does not currently have any cash in its bank account or have any other assets.            However, the Company believes that, based on an oral commitment from its President and            majority shareholder to fund the Company’s operating activities at its current            level of expenditures, it has sufficient resources to meet the anticipated needs of its            operations, such as maintaining its required continuous disclosure and reporting            requirements with the Securities and Exchange Commission, for the next twelve months,            though there can be no assurances to that effect. The Company had no revenues for the            three and six months ended May 31, 2007 and its need for capital may change            dramatically if it acquires a suitable business opportunity during the next twelve            months. Therefore, the Company plans to rely on shareholder loans and the raising of            debt or equity capital to continue its operations. There is no assurance the Company            will be successful in raising the needed capital.

 

| **Item 3.** | **Controls and Procedures** |
|-------------|-----------------------------|

 

Evaluation of Disclosure Controls and Procedures

 

The            Company’s Chief Executive Officer and Chief Financial Officer (the            “Certifying Officer”) maintain a system of disclosure controls and            procedures that is designed to provide reasonable assurance that information, which is            required to be disclosed, is accumulated and communicated to management timely. Under            the supervision and with the participation of management, at the end of the period            covered by this report the Certifying Officer evaluated the effectiveness of            the

 

6

 

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design and operation of our disclosure controls and procedures (as            defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon that            evaluation, the Certifying Officer concluded that the Company’s disclosure            controls and procedures are effective in timely alerting management to material            information relative to the company that is required to be disclosed in the            Company’s periodic filings with the SEC.

 

Changes in Internal Controls over Financial Reporting

 

Our            Certifying Officer has indicated that there were no changes in our internal controls or            other factors that could significantly affect such controls subsequent to the date of            his evaluation, and there were no such control actions with regard to significant            deficiencies and material weaknesses.

 

**PART            II. OTHER INFORMATION**

 

| **Item 1.** | **Legal Proceedings** |
|-------------|-----------------------|

 

|   | None. |
|--------|-------|

 

| **Item 2.** | **Unregistered Sales of Equity Securities and Use of                            Proceeds** |
|-------------|--------------------------------------------------------------------------------------------|

 

|   | None. |
|--------|-------|

 

| **Item 3.** | **Defaults Upon Senior Securities** |
|-------------|-------------------------------------|

 

|   | None. |
|--------|-------|

 

| **Item 4.** | **Submission of Matters to a Vote of Security                            Holders** |
|-------------|------------------------------------------------------------------------------------|

 

|   | None. |
|--------|-------|

 

| **Item 5.** | **Other Information** |
|-------------|-----------------------|

 

|   | None. |
|--------|-------|

 

| **Item 6.** | **Exhibits** |
|-------------|--------------|

 

|   | (a) | Exhibits: |
|--------|-----|-----------|

 

Exhibit 31 - Certification of President,            Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,            as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

             

Exhibit 32 - Certification of President,            Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,            as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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**SIGNATURES**

 

Pursuant to the requirements of Sections 13 or 15(d) of the Securities            Exchange Act of 1934, the registrant has duly caused this report to be signed on its            behalf by the undersigned, thereunto duly authorized.

 

|   | **CHINA ELITE INFORMATION CO., LTD.** |
|--------|---------------------------------------|

 

 

| Date:  July 6, 2007 | By | /s/ Li Kin                            Shing                                         |
|-------------------------------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Li Kin Shing

President and Chief Executive Officer

 

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