UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2005  |_|
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(State
      or other jurisdiction ofincorporation
      or organization)
    11-3462369
      (IRS Employer
      Identification No.)c/o DeHeng
      Chen Chan, LLC, 225 Broadway, Suite 1910, NY, NY
      (Address of Principal Executive Offices)
    10007
      (Zip Code)  (212) 608-6500(Registrants telephone number, including area code) Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the 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. Yes |X| No |_| Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date: As of July 15, 2005, there were 11,200,000shares of common stock
outstanding. Transitional Small Business
Disclosure Format (Check one):  Yes |_|   No |X|    CHINA ELITE
INFORMATION CO., LTD.FORM 10-QSBFOR THE THREE MONTHS ENDED MAY 31, 2005


INDEX


PageNumberPART
      I.  FINANCIAL INFORMATION
    1Item
      1. Financial Statements
    1Interim
      Balance Sheet
    1Interim
      Statements of Operations
    2Interim
      Statements of Cash Flows
    3Notes
      to Interim Financial Statements
    4Item
      2. Managements Discussion and Analysis or Plan of Operations
    5Item
      3. Controls and Procedures
    7PART
      II.  OTHER INFORMATION
    7Item
      1. Legal Proceedings
    7Item
      2. Changes in Securities
    7Item
      3. Defaults Upon Senior Securities
    7Item
      4. Submission of Matters to a Vote of Security Holders
    8Item
      5. Other Information
    8Item
      6. Exhibits
    8SIGNATURES
    9
PART I.   FINANCIAL
INFORMATION




Item 1. Financial
Statements




CHINA ELITE
INFORMATION CO., LTD.(A Development Stage Company)INTERIM BALANCE
SHEET(Unaudited)May 31, 2005



(Expressed
      in U.S. Dollars)ASSETS
    $
    LIABILITIES
      AND STOCKHOLDERS DEFICIENCYCurrent
      LiabilitiesAccounts
      payable and accrued expenses
    $
    10,843Loans
      from shareholder
    
    251,948Total
      current liabilities
    
    262,791Commitments
      and Contingencies
    
    Stockholders
      DeficiencyPreferred
      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
    
    112,000Additional
      paid in capital
    
    154,465Deficit
      accumulated during the development stage
    
    (529,256
    )Total
      stockholders deficiency
    
    (262,791
    )Total liabilities
      and stockholders deficiency
    $
    See
condensed notes to financial statements.


1
CHINA ELITE
INFORMATION CO., LTD.(A Development Stage Company)INTERIM STATEMENTS OF
OPERATIONS(Unaudited)For the three and six months ended May 31, 2005 and 2004and
for the period from inception (December 19, 1997) to May 31, 2005

(Expressed
      in U.S. Dollars)
    Cumulative
      
      from 
      inception
    
    Six
      months ended
      May 31,
    
    Three
      months ended
      May 31,2005
    
    2004
    2005
    
    2004Revenues
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    General
      and administrative expensesSalaries
      and benefits
    
    181,888
    
    
    
    
    
    
    
    
    
    
    
    General
      and administrative
    
    426,500
    
    
    33,733
    
    
    13,791
    
    
    19,860
    
    
    12,144Total
      general and administrative expenses
    
    608,388
    
    
    33,733
    
    
    13,791
    
    
    19,860
    
    
    12,144Operating
      loss
    
    (608,388
    )
    
    (33,733
    )
    
    (13,791
    )
    
    (19,860
    )
    
    (12,144
    )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
    $
    (529,256
    )
    $
    (33,733
    )
    $
    (13,791
    )
    $
    (19,860
    )
    $
    (12,144
    )Basic
      and diluted net loss per share
    
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    Weighted
      average shares outstanding
    
    
    
    
    11,200,000
    
    
    11,200,000
    
    
    11,200,000
    
    
    11,200,000See
condensed notes to financial statements.


2
CHINA ELITE INFORMATION
CO., LTD.(A Development Stage Company)INTERIM STATEMENTS OF CASH
FLOWS(Unaudited)For the six months ended May 31, 2005 and 2004and for the period
from inception (December 19, 1997) to May 31, 2005


(Expressed
      in U.S. Dollars)
    Cumulative
      
      from 
      inception
    
    Six
      months ended
      May 31,2005
    
    2004Cash
      flows from operating activitiesNet loss
    $
    (529,256
    )
    $
    (33,733
    )
    $
    (13,791
    )Adjustments
      to reconcile net loss to net cash flows used inoperating
      activitiesDepreciation
      and organization costs
    
    11,492
    
    
    
    
    
    750Loss
      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 accounts payable and accrued expenses
    
    10,843
    
    
    (13,547
    )
    
    3,949Net
      cash flows used in operating activities
    
    (458,531
    )
    
    (47,280
    )
    
    (9,092
    )Cash
      flows from investing activitiesCash
      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 activitiesLoans
      from shareholder
    
    266,345
    
    
    47,280
    
    
    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
    
    469,996
    
    
    47,280
    
    
    Increase
      (decrease) in cash and cash equivalents
    
    
    
    
    
    
    
    (9,092
    )Cash
      and cash equivalents, beginning of period
    
    
    
    
    
    
    
    9,092Cash 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
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, 2004 included in its Annual Report on Form
10-KSB.


Loss Per Share


Basic loss per share 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.


Recent
Accounting Pronouncements


In December 2004, the FASB issued
SFAS No. 123 (Revised 2004) Share-Based Payment (SFAS No. 123R).
SFAS No. 123R addresses all forms of share-based payment (SBP) awards,
including shares issued under employee stock purchase plans, stock options, restricted
stock and stock appreciation rights. SFAS No. 123R will require the Company to expense SBP
awards with compensation cost for SBP transactions measured at fair value. On March 29,
2005, the SEC issued Staff Accounting Bulletin (SAB) 107 which expresses the views of the
SEC regarding the interaction between SFAS No. 123R and certain SEC rules and regulations
and provides the SECs views regarding the valuation of share-based payment
arrangements for public companies. In April 2005, the SEC issued a release which amends
the compliance dates for SFAS No. 123R. The adoption of SFAS No. 123R and SAB 107
does not currently have any impact on the Companys financial statements.


In May 2005, the FASB issued SFAS
No. 154,  Accounting Changes and Error  Corrections.  SFAS No. 154 replaces
APB Opinion No. 20 Accounting Changes and SFAS No. 3, Reporting
Accounting Changes in Interim Financial Statements.  SFAS No. 154 requires
 retrospective  application to prior periods financial  statements of changes in
accounting  principle,  unless it is impracticable to determine either the
 period-specific effects or the cumulative  effect of the change.  We do not expect the
adoption of SFAS No. 154 to have any impact on the Companys  financial statements.


4
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 equity 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 capital or that such
additional funds will be available for the Company on acceptable terms, if at all. The
Companys President has verbally agreed to fund its operations for the next twelve
months, 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 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, 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
$251,948 on May 31, 2005 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 within the
meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act),
and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).
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,


5
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 we believe 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.


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.


The Company has no current plans (i)
for the purchase or sale of any plant or equipment, (ii) to make any changes in 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.


6
Capital Resources and
Liquidity


The Company does not currently have
any cash in bank, however management believes, based on its 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 the Companys 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 has no
revenues and its need for capital may change dramatically if it acquires a suitable
business opportunity during that period. 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) maintains 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, the Certifying Officer evaluated the effectiveness of the design and operation
of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under
the Exchange Act) within 90 days prior to the filing date of this report. Based upon that
evaluation, the Certifying Officer concluded that our disclosure controls and procedures
are effective in timely alerting them to material information relative to our company
required to be disclosed in our periodic filings with the SEC.


Changes in Internal
Controls


Our Certifying Officer has indicated
that there were no significant 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.
Changes in Securities


None.




Item 3. Defaults
Upon Senior Securities


None.


7
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 2002.8
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.


Date: July 15, 2005
    
    CHINA
      ELITE INFORMATION CO., LTD.
      By /s/ Li Kin Shing
             
             Li Kin Shing
             President and Chief Executive
      Officer9