U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549










Form 10-Q








[mark one]





x           QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934





For the quarterly period ended: September 30, 2012








o           TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934





For the transition period from ___________ to ____________





Commission File Number: 000-52846








AMERELITE SOLUTIONS, INC.


(Name of small business issuer in its Charter)








Nevada
76-0766174(State or other jurisdiction of
(I.R.S. EmployerIncorporation or organization)
Identification No.)








3122 W. Clarendon Ave.


Phoenix, AZ 85017


(Address of Principal Executive Offices)





602-233-0540


(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 preceding 12 months (or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days.


x Yes      o 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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large Accelerated filer
o

Accelerated Filer
oNon-accelerated filer
o

Smaller Reporting Company
x(Do not check if smaller reporting company)





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


Yes oNo x





As of November 14, 2012 the registrant had 27,362,238 shares of its common stock, $0.001 par value, issued and outstanding.





1








AmerElite Solutions, Inc.


(A Development Stage Company)





Table of Contents





PagePart I - Financial InformationItem 1.
Financial Statements
3Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011
4Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2012 and 2011
5Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2012 and 2011
6Notes to Financial Statements
8Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
10Item 3.
Quantitative and Qualitative Disclosures About Market Risk
11Item 4.
Controls and Procedures
11Part II - Other InformationItem 1.
Legal Proceedings
12Item 1A.
Risk Factors
12Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
12Item 3.
Defaults Upon Senior Securities
12Item 4.
Submission of Matters to a Vote of Security Holders
12Item 5.
Other Information
13Item 6.
Exhibits
13Signatures

13




















2





AmerElite Solutions, Inc.(A Development Stage Company)Balance Sheets





September 30


December 31,2012


2011(Unaudited)


AuditedASSETSCurrent Assets:Cash and Cash Equivalents

$
3,918


$
610Total Current Assets


3,918



610Other Assets:Deposits


1,135



1,335Total Assets

$
5,053


$
1,945LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesAccounts Payable

$
32,487


$
240,544Accrued Interest Payable


2,759



-Notes Payable


248,275



55,300Total Current Liabilities


283,521



295,844Total Liabilities


283,521



295,844Stockholders' Equity/(Deficit)Preferred Stock, authorized 2,000,000shares, par value $0.001, issued andoutstanding 1,250,000 shares


1,250



1,250Common Stock, authorized 100,000,000shares, par value $0.00127,362,238 (2012) and 14,824,353 (2011)shares issued and outstanding


27,363



18,529Additional Paid-in Capital


2,974,385



2,998,663Accumulated Deficit during Development Stage


(3,281,467
)


(3,312,341
)Total Stockholders' Equity/(Deficit)


(278,469
)


(293,899
)Total Liabilities and Stockholders' Equity

$
5,053


$
1,945The accompanying notes are an integral part of these statements
  3





AmerElite Solutions, Inc.(A Development Stage Company)Statements of Operations





Three Months Ended


Nine Months Ended


July 26, 1994September 30


September 30


September 30


September 30


(Inception)to September 302012


2011


2012


2011


2012Revenue

$
-



-






-



21,759Total Revenue


-



-



-



-



21,759Cost of Goods Sold


-



-



-



-



5,320Gross Profit


-



-



-



-



16,439Operating ExpensesSalaries and Wages


-



-











1,059,698General and Administrative


2,230



1,215



4,870



3,287



836,341Professional and Consulting


8,098



1,802



43,478



9,172



595,459Product Development


-



-











84,851Marketing


-



-











289,551Investor Relations


-



-











465,672Total Expenses


10,328



3,017



48,348



12,459



3,331,572(Loss) from Operations


(10,328
)


(3,017
)


48,348



(12,459
)


(3,315,133
)Other Income/(Expense)Other Income


-



-











4,519Interest Income


-



-











45,173Interest Expense


(87
)


-



(2,760
)






(15,977
)Total Other Income/(Expense)


(87
)


-



(2,760
)






33,715Net Income/(Loss) Before Income Taxes


(10,414
)


(3,017
)


(51,108
)


(12,459
)


(3,281,418
)Rounding Effect


1







1







1Income Tax Expense


-



-



(50
)






(50
)Net Income/(Loss)

$
(10,413
)


(3,017
)


(51,157
)


(12,459
)


(3,281,467
)Basic (Loss) per Share


(0.00
)


(0.00
)


(0.00
)


(0.00
)Weighted Average Number of Common Shares


16,250,998



15,084,353



18,784,614



15,084,353shares, par value $0.001,





The accompanying notes are an integral part of these statements








4





AmerElite Solutions, Inc.(A Development Stage Company)Statements of Cash Flows


Nine Months Ended


July 26, 1994September 30


September 30


(Inception)to September 302012


2011


2012Operating ActivitiesNet Loss


(51,157
)


(9,442
)


(3,281,467
)Adjustments to reconcile Net Loss:Stock Issued for Service


3,687



-



1,598,592Depreciation and Amortization


-



1,000



20,441Changes in Operating Assets and Liabilities(Increase)/Decrease in Deposits


200



-



(1,135
)Increase/(Decrease) in Accounts Payable


21,943



(1,888
)


1,047,454Increase/(Decrease) in Accrued Liabilities


2,760



-



72,759Write Offs


-



-



353,248Net Cash (Used) by Operating Activities


(22,567
)


(10,330
)


(190,108
)Investment ActivitiesInvestment in Trademarks and Trade Names


-



-



(13,729
)Purchase of Equipment


-



-



(20,441
)Net Cash (Used) by Investment Activities


-



-



(34,170
)Financing ActivitiesPre-Paid Expenses


-



-



-Proceeds from Loans


25,875



10,450



333,885(Repayment) of Loans


-



-



(366,563
)Proceeds from the Sale of Stock


-



-



260,872Net Cash Provided by Financing Activities


25,875



10,450



228,194Net Increase / (Decrease) in Cash


3,308



120



3,918Cash, Beginning of Period


610



757



-Cash, End of Period


3,918



877



3,918Supplemental Information:Interest Paid


-



-



13,217Income Taxes Paid


-



-



-Significant Non-Cash Transactions:


-Stock issued to Convert Debt


62,900



-



616,132Paid in Capital - Debt Relief


-



82,031



82,031Stock Issued to Acquire Assets


-



-



400,000Stock Issued for Services


3,006



-



3,006Notes Issued for Accounts Payable


230,000



-



230,000The accompanying notes are an integral part of these statements


5
 
 AMERELITE SOLUTIONS, INC.
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 (Unaudited)





NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:





AmerElite Solutions, Inc. (the Company) was originally incorporated in the state of Nevada July 26, 1994 as ABC Home Care Specialists, Inc., and on May 18, 2005 changed its name to AmerElite Solutions, Inc. The Company is in the business of marketing and distributing skin care products.





Basis of Presentation





The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.





Cash and cash equivalents





The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.





Accounts receivable





The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.





Inventories





Inventories, consisting of building materials, are stated at the lower of cost or market (first-in, first-out method).





Property and equipment





Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life.





Revenue recognition





Revenue is recognized on an accrual basis as earned under contract terms.

















6
 
 AMERELITE SOLUTIONS, INC.
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 (Unaudited)
 
 NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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. Actual results could differ from those estimates.





Income tax





The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.





Net income (loss) per share





The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.





Financial Instruments





The carrying value of the Company’s financial instruments as reported in the accompanying balance sheet, approximates fair value.








NOTE 2.    NOTES PAYABLE





$230,000.00, Note Payable @ 2% interest, unsecured, due on demand, to unaffiliated 3rd party, acquired from officers/directors.





$18,275.00, Individuals @ 2% interest, unsecured, due on demand to unaffiliated 3rd parties.





Notes Payable have Accrued Interest Payable of $2,759.00 as of September 30, 2012.











7





Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.





The following discussion is a discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2012 and significant factors that could affect our prospective financial condition and results of operations.  Historical results may not be indicative of future performance.





This report on Form 10-Q contains forward-looking statements within the meaning of and which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements.  Forward-looking statements generally are accompanied by words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans” and similar statements and should be considered uncertain and forward-looking.  Any forward-looking statements speak only as of the date on which such statement is made, are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements, whether as a result of new information, future events or otherwise.





Factors that could cause such results to differ materially from the results discussed in such forward looking statements include, without limitation; uncertain continued ability to meet our operational needs in view of continued severe ongoing working capital constraints; need for substantial additional capital to fully implement our plan of operations; no assurances of and uncertainty of profitability; no assurances of the Company’s ability to effect sufficient product sales so as to maintain exclusivity in certain territorial markets, the result of which could materially adversely affect the Company’s results of operations; need for additional management, sales and marketing personnel, which is contingent upon our receipt of additional capital; competition from companies having substantially greater financial, marketing and other resources than the Company, including name and brand recognition; the impact of competitive services and pricing; changing consumer tastes and trends; and the legal, auditing and administrative cost of compliance associated the Sarbanes Oxley Act.





Many of such factors are beyond our control.  New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each factor on our business or the extent to which any factor, or combination of factors may cause actual results to differ materially from those contained in any forward looking statements.  In light of these risks and uncertainties, there can be no assurance that the results anticipated in these forward-looking statements in this report will in fact occur.  All forward-looking statements wherever they may appear are expressly qualified in their entirety by the cautionary statements in this section.  We undertake no obligation to update any such forward-looking statements.





Overview





AmerElite Solutions, Inc. is a development stage company with limited operations and revenues to date, limited financial backing and its assets are predominately intangible.   The current stage of our Business Plan  is to establish ourselves as a company that has developed and manufactured and is attempting to obtain financing so that it can market and sell the CollesenseTM Premium Skin Care Collection.  Distribution will initially be based on direct response and Internet based advertising campaign.  As a follow up, we plan to introduce CollesenseTM  on a kiosk program in high traffic, regional shopping centers across the country.  We are planning to target the rapidly growing baby boomers generation offering a full spectrum of skin care products designed to naturally improve skin wellness and provide anti-aging properties.  These markets continue to expand with double-digit annual growth.





As of September 30, 2012, the Company’s outstanding Notes Payable balance was $248,275 along with Accrued Interest of $2,759. The Company’s Accounts Payable balance as of September 30, 2012 was $32,487.  Currently, the Company has an average of $2,500 per month in cash expenditures that it cannot accrue or pay in the form of equity.  The Company’s President has made arrangements to borrow these funds on an interim basis until the Company can obtain funds to capitalize itself.





During the first stages of AmerElite’s growth, our officers and directors will provide the majority of all the labor required to execute our business plan.  The officers, directors and a key consultant have agreed to take the company’s restricted common stock in lieu of any monetary compensation.  Since we intend to operate with very limited administrative support, the officers and directors have decided to work with industry experts in order to produce and market our direct-response advertisements and Internet sales sites. In order to fully execute the business management will need to hire 2-3 part time workers to handle order confirmation, customer support and accounting.




During the first year of operations, we will rely on third party’s to properly analyze and select the necessary time slots, channels and regions in which to air our  short and long form advertising.  In addition,  we will contract with an outside  expert to develop a comprehensive Internet eStrategy to capitalize of one of the fastest growing channels for cosmetic products.  At present, we have no plans to market our products outside of the United States.





8





Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations- continued





In May 2005 AmerElite Solutions, Inc. purchased our intellectual property – the anti-aging ingredient we have named Collamin_G®.  This ingredient became the basis for our first product Serum_G®.  We conducted two separate studies to determine the efficacy of our anti-aging serum.  Over half of the participants volunteered to have before and after photos taken over the test period.  Participants in each of the studies were asked to fill out a subjective questionnaire daily in which they answered questions and were encouraged to write additional comments regarding the effects that resulted from using Serum_G® twice a day.





After the first two test groups completed their test period and the results were analyzed we contracted with a manufacturing firm based in Phoenix, AZ to produce a full line of skin care products.  An initial set of samples was produced in order to obtain feedback on the quality of each product.  We commissioned several focus groups comprised of cosmetologists, aestheticians and consumers.  Each of the individuals was presented product samples and then asked to evaluate and respond to the following:





·
Absorption


·
Fragrance


·
Texture


·
Color





The results of both the Serum_G® test and of the focus groups were valuable and overwhelmingly positive.  The study of the absorption of Serum_G® and the instant and lasting effect of Serum_G® on the appearance of fine lines and wrinkles showed encouraging results.  These positive responses have had a direct effect on the message that we are conveying to our target market.  The before and after photos that were taken are not retouched and show a significant improvement in the skin around the eyes.  These photos have also been used in our marketing materials, and promotional videos.  Several participants have given testimonials as to the results of using Serum_G® and have signed affidavits verifying the validity of such statements.





In January of 2007 we manufactured 6 products for our CollesenseTM Premium Skin Care Collection.  In February of 2007 we opened a kiosk in a local regional shopping center to run a market test and gain additional feedback regarding the products and price points.  In March of 2007 we contracted with a local company to run short features on Saturday mornings on a local TV station.  We ran four different offers featuring various combinations of CollesenseTM products at four different price points.





Based on input from industry professionals, management continues to review several alternative names for a product line that will consist of the same 6 products that made up the CollesenseTM  Premium Skin Care Collection.  This new product line will be manufactured and packaged for both the domestic and international markets with labeling consistent with the domestic and international market that it is intended for.





During the quarter ended September 30, 2012 we have continued to implement the following steps of our business plan:





·           Conducted research on new products and packaging


·           Explored opportunities with other companies to distribute our product through a private label program


·           Met with public relation firms


·           Meeting with representatives of e-commerce firms in order to market our product





We are a startup business engaged in the development, manufacturing and marketing of a premium skin care collection designed to provide a full spectrum of skin care products that naturally improve skin wellness and provide anti-aging properties to a rapidly expanding health and wellness market.





We have earned no revenues in 2012 from our business operations.  Accordingly, we may be required to raise cash from sources other than our operations in order to continue our business plan.  We may raise this additional capital either through debt or equity.  No assurance can be given that such efforts will be successful.  We have no specific plans at present for raising additional capital.





Since our inception, we have been engaged in business planning activities, including the launch of our product line, product research with professional focus groups, production of an infomercial, launch of a e-commerce website, developing our economic models and financial forecasts.







9





Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations- continued





Results of Operations:





Three Months Ended September 30, 2012 and September 30, 2011





During the three months ended September 30, 2012 we generated $0 in revenue compared to revenues of $0 for the same period ended September 30, 2011.  Net loss for the three months ended September 30, 2012 was $6,726 compared to a net loss of $3,017 for the same period ended September 30, 2011. , This loss for the three months ended September 30, 2012 was primarily attributable to continued administrative expenses, professional and consulting fees related to our efforts to the continued pursuit of our business plan.





For the three months ended September 30, 2012 we had no retail sales of our CollesenseTM Premium Skin Care Collection.  The Company needs working capital/financing in order to restart the manufacture of its product.    Total Operating Expenses for the three months ended September 30, 2012 was $6,640.  The increase in Operating Expenses for the three months ended September 30, 2012 was attributable to an increase in consulting fees and expenses incurred.  With Gross Profit of $0 and Operating Expenses totaling $6,640, the Company had a loss from operations for the three months ended September 30, 2012 of $6,640.





Nine Months Ended September 30, 2012 and September 30, 2011





During the nine months ended September 30, 2012, we generated $0 in revenue compared to revenues of $0 for the same period ended September 30. 2011.  Net loss for the nine months ended September 30, 2012, was $47,420 compared to net loss of $12,459 for the same period ended September 30, 2011. This loss for the nine months ended September 30, 2012was primarily attributable to continued administrative expenses, professional and consulting fees related to our efforts in regaining a listing on the OTC:BB and continued pursuit of our business plan.





Liquidity and Capital Resources:





At September 30, 2012, the Company’s current assets of $5,053, exceeded by current liabilities of $283,521 created negative working capital of $278,468. The Company at September 30, 2012 had cash on hand of $3,918.





On August 2, 2012, the Company and holders of notes totaling $62,900 entered into an agreement to issue shares of common stock of the Company in exchange for the debt. The Company agreed to exchange a total of 12,580,000 shares of common stock for these three Notes Payable totaling $62,900 or $0.005 per share.  Two of the Notes were held by affiliate companies controlled by Courtney Knapp, a Director of our Company, for notes payable  totaling $52,050 that  were exchanged for 10,410,000 shares of common stock. The conversion or settlement price per share was $0.005. These issuances were completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend.




On July 2, 2012, the Company entered into a consulting arrangement with Capital Path Securities, LLC (“Capital Path”).  Capital Path was issued 500,000 shares of Rule 144 restricted shares. The shares were issued in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares carry a restrictive legend under Rule 144.





During the nine months ended September 30, 2012, the Company entered into two separate, short term arrangements with both an officer and director of the company and a director of the company.  These two short term agreements total $230,000 and were comprised of accrued compensation approved by the Board of Directors of  the Company.  These two short term arrangements bear interest of 2% per annum and are payable on demand.  As of September 30, 2012, the two short term arrangements were assigned to a third party and the Company recorded accrued interest expense of approximately $1000 and the transfer of ownership.  The Company, in connection with the two other notes payable, agreed to convert the principal and interest at a conversion price of $0.005 per share which is considered to be the company’s fair market value of its common stock.  The Company, in connection with the conversion of the two notes payable on July 2, 2012, authorized the issuance of 14,000,000 and 32,000,000 shares of common stock as full satisfaction for $70,000 and $160,000 in convertible notes payable.  The Company, along with the transfer of ownership of the $230,000 in notes payable subject to conversion, may be required to issue an additional 46 million shares of common stock as full satisfaction for principal and interest.




We have limited capital resources, as, among other things, we are a startup company with a limited operating history.  We have not generated any revenues for 2011 or for the first nine months of 2012, and may not be able to generate sufficient revenues to become profitable in the future.  The Company does plan to restart its production of the CollesenseTM product line which will produce product for sale.  Production is predicated on financing or loans from various parties.






10




Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued




Our cash reserves are not sufficient to meet our obligations for the next 12-month period.  As a result, we will need to seek additional funding in order to pursue our business plan and restart our production.  We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of short-term loans or in the form of equity financing from the sale of our common stock or preferred stock on a best efforts basis.  We do not have any arrangements in place for either of these financing options. On July 11, 2012 pursuant to a vote of the majority of the shareholders of the Company we effected several changes to our authorized capital which includes par value. Par value for our common stock decreased from $0.00125 to $0.001 per share. Our authorized capital increased from 20,000,000 to 100,000,000 for our common stock and 2,000,000 to 10,000,000 for our preferred stock.





We do not anticipate the need to purchase any equipment in the near future.





We do not anticipate the need to hire any employees over the next 12 months.  We believe that our operations are currently on a scale and size that are manageable by one individual, our Chief Executive Officer, Mr. Knapp.







Item 3.  Quantitative and Qualitative Disclosure About Market Risk.





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.







Item 4.  Controls and Procedures





Evaluation of Disclosure Controls and Procedures





Robert Knapp, the Company's Principal Executive Officer and Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15e and 15d-15e under the Securities Exchange Act of 1934 (the "Exchange Act") as of September 30, 2012. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported on a timely basis and that such information is accumulated and communicated to management, including the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the Company's Principal Executive Officer and Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.





Material Weakness





Internal Controls Over Financial Reporting





In connection with the preparation of our financial statements for the quarter ended September 30, 2012, certain significant deficiencies in internal control became evident to management that represented material weaknesses, including:





i.   Lack of an audit committee. We did not have an audit committee who would be charged with the purpose of overseeing the accounting and financial reporting processes of the Company.





ii.   Insufficient segregation of duties in our accounting functions and limited personnel. During the year, we had limited staff that performed nearly all aspects of our financial reporting process including, but not limited to access to the underlying accounting records and systems, the ability to record journal entries and responsibility for the preparation of financial statements.





This created certain incompatible duties and a lack of review over the financial reporting process that could likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected in a timely manner. In addition, our Company's accounting personnel does not have sufficient technical accounting knowledge relating to accounting for complex generally accepted accounting principle matters or SEC derived public reporting and disclosure. Management with assistance of outside professionals has corrected any errors prior to the release of our Company's December 31, 2011 and September 30, 2012 financial statements.





CHANGES IN INTERNAL CONTROLS





During the three months ended September 30, 2012, the Company employed an outside accountant proficient in financial reporting and technical accounting on an ad-hoc hourly basis. As this person is interim to the hiring of a full time accounting professional and familiarity with the Company's accounting and financial reporting processes, management does not believe this material weakness is fully remediated as of September 30, 2012. Thus, management believes that there were no changes in the Company's internal controls over financial reporting that occurred during the three months ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.




11





Part II – Other Information





ITEM 1.  LEGAL PROCEEDINGS





None.








ITEM 1(A).  RISK FACTORS





Not Required.








ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





On August 2, 2012, the Company and holders of notes totaling $62,900 entered into an agreement to issue shares of common stock of the Company in exchange for the debt. The Company agreed to exchange a total of 12,580,000 shares of common stock for these three Notes Payable totaling $62,900 or $0.005 per share.  Two of the Notes were held by affiliate companies controlled by Courtney Knapp, a Director of our Company, for notes payable   totaling $52,050 that  were exchanged for 10,410,000 shares of common stock. The conversion or settlement price per share was $0.005. These issuances were completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend.





On July 2, 2012, the Company entered into a consulting arrangement with Capital Path Securities, LLC (“Capital Path”).  Capital Path was issued 500,000 shares of Rule 144 restricted shares. The shares were issued in accordance with Section 4(2) of the Securities Act without any public offering or distribution. These shares carry a restrictive legend under Rule 144





On August 2, 2012 the Company issued a total of 237,500 restricted shares of common stock to seven (7) unaffiliated entities in consideration for consulting services provided to the Company. These issuances were completed in accordance with Section 4(2) of the Securities Act in an offering without any public offering or distribution. These shares are restricted securities and include an appropriate restrictive legend.





During the nine months ended September 30, 2012, the Company entered into two separate, short term arrangements with both an officer and director of the company and a director of the company.  These two short term agreements total $230,000 and were comprised of accrued compensation approved by the Board of Directors of  the Company.  These two short term arrangements bear interest of 2% per annum and are payable on demand.  As of September 30, 2012, the two short term arrangements were assigned to a third party and the Company recorded accrued interest expense of approximately $1000 and the transfer of ownership.  The Company, in connection with the two other notes payable, agreed to convert the principal and interest at a conversion price of $0.005 per share which is considered to be the company’s fair market value of its common stock.  The Company, in connection with the conversion of the two notes payable on July 2, 2012, authorized the issuance of 14,000,000 and 32,000,000 shares of common stock as full satisfaction for $70,000 and $160,000 in convertible notes payable.  The Company, along with the transfer of ownership of the $230,000 in notes payable subject to conversion, may be required to issue an additional 46 million shares of common stock as full satisfaction for principal and interest.








ITEM 3.  DEFAULTS UPON SENIOR SECURITIES





None.








ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





The following Amendment to the Articles of Incorporation was approved by a Vote of the shareholders of record on June 25, 2012.  Of the total of 14,181,088 Common Stock shares issued and outstanding, 12,798,706 voted to approve the Amendment.  Of the total of 1,250,000 Class A Preferred Stock shares issued and outstanding, 12,500,000 (ten votes per share) voted to approve the Amendment.  Said Amendment to have the effective date of July 2, 2012.





Articles VI, Section 1, Change of Authorized Capital:


(a)   the authorized common stock of 20,000,000 shares will be changed to 100,000,000 shares, and;


(b)   the authorized preferred stock of 2,000,000 shares will be changed to 10,000,000 shares, and;


(c)   the $0.00125 par value per share of the common stock will be changed to a par value of $0.001 per share. These changes to be effective July 2, 2012.





Provide the Board of Directors, at its discretion, to undertake a reverse or forward stock split of the Company’s Common Stock and Preferred Stock at a ratio of between one-for-fifty and one-for-two at any time on or prior to July 2, 2013.





Ratification of the four (4) proposed actions to AmerElite Solutions, Inc.’s Articles of Incorporation on July 2, 2012, eighteen (18) consenting shareholders representing 25,298,706 effective voting shares of the Company’s Voting Stock or 94.82% of the Company’s outstanding Voting Stock, 26,281,088 effective voting shares as of June 25, 2012 ratified the adoption of the June 25, 2012 special shareholder meeting actions.








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ITEM 5.  OTHER INFORMATION





None








ITEM 6.  EXHIBITS AND REPORTS





A. EXHIBITS





Exhibit No.
Description31.1
Certification of Principal Executive Officer and Principal Financial Officer32.1
Certification Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002








B. REPORTS





None




















SIGNATURES





Pursuant to the requirements 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.








AMERELITE SOLUTIONS, INC.Date:  November 19, 2012
By:
/s/ Robert L. KnappPrincipal Executive Officer andPrincipal Financial Officer





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