RWMI RegalWorks Media Inc (PK)

AMERELITE SOLUTIONS™, INC.

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(Name of small business issuer in its Charter) 

 

 

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

PART I

Item 1.    Description of Business

AmerElite Solutions, Inc. (“AMRX”, “the Company”, “we”, “our”, or “us”) is engaged in the business of developing, manufacturing, marketing and selling the Collesense™ Premium Skin Care Collection, a revolutionary skin care line combining next generation science with nature to form the most advanced beauty treatment available today.  The Company owns the worldwide rights to its intellectual property, Collamin_G®, a revolutionary anti-aging ingredient that is the main ingredient in the Collesense™ Skin Care Collection.

PRODUCTS AND SERVICES

AmerElite Solutions, Inc. provides a full spectrum of skin care products designed to naturally improve skin wellness and provide anti-aging properties with our Collesense™ Premium Skin Care Collection.  The Collesense™ system combines next generation science with nature to form the most advanced beauty treatment available today.  Utilizing aromatherapy and a variety of specific actives that include our proprietary ingredient, Collamin_G® - our innovative, botanically based formulas deliver a dramatic improvement in the general health, well-being and increased vitality for great looking skin.  Collesense™ products stimulate cell renewal, prevent and reduce the appearance of wrinkle and fine lines, dark circles, spider veins, rosacea, varicose veins and reduce under eye puffiness.

 

Collamin_G®, our intellectual property, is a revolutionary ingredient made of ingredients native to the body that provides nourishment to the skin.  The elements of Collamin_G® are broken down approximately 200-500 times smaller than the average skin pore.  These molecules rapidly penetrate the skin delivering essential nutrients beneath the top layer of skin that the body uses in the natural process of collagen regeneration.  Studies have shown a dramatic decrease in the appearance of fine lines and wrinkles after regular use of Serum_G®, our intensive wrinkle reducing formula that contains almost 50% Collamin_G®.

Principal Products

 

The Collesense™ Premium Skin Care Collection offers a daily system designed to work with the body’s natural systems to replenish, renew, and return the skin to a healthy, youthful state.  Each and every product in the Collesense™ family contains our proprietary ingredient, Collamin_G®, combined with natural, vegan and organic ingredients.  This unique combination creates the most advanced beauty treatment available today.  Collamin_G® is designed to provide nourishment to support the body’s natural process of collagen regeneration thereby creating tighter, firmer skin and reducing wrinkles and fine lines.  Combined with the science, we have developed a skin care line based on botanical derived products.  Botanically based products offer numerous advantages for the skin.  The skin recognizes, ‘biochemically’, plant derived products better that synthetic chemicals.  The result is healthy, balanced and hydrated that is effective on all skin types and in all climates. Used on a daily basis, the skin feels restored, refreshed and renewed.  The Collesense™ System encourages a step by step program with the use of these products to maximize results.

 

 

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Item 1.    Description of Business - continued

 

PRODUCTS AND SERVICES - continued

 

Collesense™   Cleansing Milk

 

This refreshing cleansing milk has been sold in our mall based test store and on the Company’s internet site.  Cleansing Milk has been sold both as an individual product and as part of the Collesense™ System.  It gently removes the buildup of daily residue and make up, leaving the skin soft and radiant.  It will not dry out or strip your face as it cleans, soothes, and conditions the skin.

 

Collesense™ Facial Scrub

 

This micro-exfoliating scrub has been sold in our mall based test store and on the Company’s internet site.  Facial Scrub has been sold both as an individual product and as part of the Collesense™ System.  It gently and effectively aids in the removal of the accumulation of dead surface cells, and refines the pores as it brightens and polishes the skin.

Collesense™ Serum G®

 

This high potency serum has been sold in our mall based test store and on the Company’s internet site.  Serum_G® is the Company’s best selling product and has been sold both individually and as part of the Collesense™ System.  It is based on the revolutionary ingredient Collamin_G®.  Clinical studies have shown that when used daily, Serum_G® reduces the appearance of fine lines and wrinkles and the skin appears tightened.  The effectiveness of Collamin_G® is based on a formula of ingredients native to the skin that stimulates the skin’s own collagen molecules. The elements of Collamin_G® are approximately 200-500 times smaller than the pores of the skin, which means that approximately 200-500 elements penetrate the skin through a single pore at one time.  Made from ingredients native to the skin Collamin_G® contains nutrients that are essential to support the body’s natural process of collagen regeneration.

Collesense™ Eye Balm

 

This elegant blend of botanicals and anti-oxidants has been sold in our mall based test store and on the Company’s internet site.  The Eye Balm has been sold both individually and as part of the Collesense™ System.  It replenishes, revitalizes and hydrates the delicate under eye area. The texture is creamy and delivers a very fine film to moisturize and soften the under eye area with no pilling or residue.  In addition, it may reduce the appearance of puffiness, dark circles, fine lines and wrinkles. 

Collesense™ Daytime Moisturizer

 

This ultimate rejuvenating hydrator with natural sun filters has been sold in our mall based test store and on the Company’s internet site.  This Daytime Moisturizer has been sold both individually and as part of the Collesense™ System.  It delivers a sustained release of extraordinary moisture into the skin while at the same time creates a sealing barrier on the skin that offers protection from the visible effects of the environment and time.   It reduces the appearance of fine lines and wrinkles making beautiful skin a daily reality.  Contains botanically based ingredients that acts as a sun-filtering agent.

Collesense™ Night Cream

This revolutionary treatment that supplies a mega dose of anti-oxidants, botanicals and vitamins has been sold in our mall based test store and on the Company’s internet site.  This Night Cream has been sold both individually and as part of the Collesense™ System.  It is synergistically blended to deeply nourish the skin for new cellular growth and counter balance all free radical reaction that may damage the skin.  The Night Cream strengthens firms and encourages cell recovery.

The Collesense™ System offers a step by step program that cleans, exfoliates, treats, moisturizes and hydrates the skin.  The uniqueness of the system lies in the science.  Collamin_G® is an ingredient in each botanically based product.  Combining science and nature, the Collesense™ System works on top of and below the skin surface to treat the cause of the wrinkles in addition to moisturizing and hydrating the skin.  The consumer begins with the Cleansing Milk to clean away any debris and pollutants while cleaning the face.  Next is the Facial Scrub to clear away any dead skin cells and fully expose the pores.  The Serum_G® follows this with maximum penetration into the skin to support the body’s natural regeneration processes.  After the Serum_G® quickly absorbs, the Daytime Moisturizer with sun filtering agents is applied to moisturize and protect the face.  Finally, the Eye Balm is applied to energize and tone the sensitive skin around the eyes.  Now they can put on their make-up and face the day.  The Night Cream with antioxidants and vitamins is designed to revitalize the skin while sleeping.  Our Research and Development Department is working on several other products to compliment the Collesense™ family of products such as: Facial Mask, Toner, Body Wash and Body Lotion.  Using the Collesense™ System daily helps dramatically reduce the appearance of fine lines and wrinkles and improves the condition of the skin.  The skin appears lifted and restored to a youthful essence.

 

 

 

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Item 1.    Description of Business - continued

 

PRODUCTS AND SERVICES - continued

 

Marketing Plan

 

The goal of the marketing plan is to educate our target customers to truly understand the uniqueness of the Collesense™ Premium Skin Care Collection.  Our direct response plan and internet based advertising campaign fits within the overall business plan of controlling all aspects of the Collesense™ Premium Skin Care Collection line of products, from research and development, to manufacturing, warehousing, distribution and direct sales to the customer.  We intend to start with short and long form advertising broadcast nationwide.  The ads will educate the consumer to the uniqueness of Collesense™ and direct them to an informed sales representative or an Internet site.  Utilizing a professional sales team and the internet will allow the consumer to become educated to the unique benefits of using Collesense™ view testimonials and before and after photos, compare Collesense™ to existing skin care lines and place an order.

 

In addition to direct response advertising, Collesense™ will be aggressively promoted via the Internet.  We will work with outside professionals to develop, design, and implement a successful eStrategy in order to open up new markets, add in cross sales/up sells, offer new products, form qualified strategic partnerships, and launch an online affiliate solution.  

 

The second phase of our marketing plan is to roll out a kiosk program in high traffic, regional shopping centers across the country.  This will allow the consumer to experience Collesense™ as well as have a sales representative available to answer any questions.  The addition of the kiosk program will offer consumers three separate channels - telephone, Internet and retail – to research and purchase Collesense™.

 

This will be followed by regular TV ads to reinforce the message, plus radio and print ads to broaden the base of potential customers and to build product recognition. At each stage, the consumer will be invited to call an 800 number to place an order. Once a targeted level of penetration is achieved, we will add additional distribution and sales through a network of carts in regional malls selling the Collesense™ line of anti-aging/anti-wrinkle products.  Our commercial message will be updated approximately every 6 months to keep the message fresh.  We are continually testing our product line to provide exciting new items to bring to the public.

Dependence on One or More Major Customers

We do not anticipate dependence on one or more major customers for at least the next 12 months or the foreseeable future.

Distribution Method

 

Initially, we plan to contract with a fulfillment center to ship orders received from the short and long form advertisements or taken from our Internet site.  The fulfillment center will also provide customer service support for all orders shipped and handle all credit card processing associated with the orders.  As the second phase of the marketing plan is initiated we will sell directly to licensed distributors running carts in major regional malls across the country.

 

Research & Development / New Product Development

 

The President of AmerElite Solutions is responsible for the Company’s Research and Development.  The President is performing the product development as part of his duties at no additional charge.  Our manufacturing firm is not charging the Company for their help in the development of the products other than having an exclusive agreement to manufacture the Company’s product. The Company has no expected Research and Development Expenses in the next twelve (12) months.

Since we introduced Collesense™, we have received outstanding input from our growing customer base.  Based on their comments, we have developed additional products to keep up with the evolving skin care market.  Currently ready for production is our ‘Serum_H’, an ultra-hydrator that ‘weather-proofs’ the skin.  This hydro-lipid restorer utilizes the ONLY botanically derived polymer available on the market today in order to naturally balance the moisture level of the skin for all climates.  In order to meet the growing demand from ethnic communities for a pale complexion, we have developed a skin brightening lotion that has been clinically proven to lighten the skin tone.  Products that are currently in the development stage include a lotion to reduce varicose veins, treat rosacea, a facial mask, toner, body lotion, body wash, shampoo, conditioner and a mist.  We are totally committed to the Research and Development necessary to ensure continuous flow of new and improved products to the marketplace.

 

 

 

 

 

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Item 1.    Description of Business – continued

PRODUCTS AND SERVICES - continued

Intellectual Property

 

The Company’s intellectual property includes our proprietary formulas.  Our Trade Secret program has been installed to protect these formulas.  Trade Secret Agreements have been signed by Officers & Directors, employees, vendors, consultants, and suppliers and manufactures.   To protect the formulas to our products and our products’ sales, we our relying on a combination of:

 

·	Trade secret laws

 

·	Copyright, trademark and trade name laws

 

·	Confidentially, procedures and agreements

 

·	Having unique product formulas

 

The Company has successfully registered the following marks with the United States Patent and Trademark Office:

 

·	Collamin_G®

 

·

Serum_G®

 

Existing or Probable Government Regulations

 

We believe that our business is not subject to material regulation under the laws of the United States or any of the states in which the Company plans to sell its products.   Laws and regulations often differ materially between states and within individual states such laws and regulations are subject to amendment and reinterpretation by the agencies charged with their enforcement.  Moreover, regulatory requirements are subject to change from time to time and may in the future become more restrictive, thereby making compliance more difficult or expensive or otherwise affecting or restricting the Company’s ability to conduct our business as now conducted or proposed to be conducted.

 

Facilities

Our corporate office is being provided by one of our directors at no charge.  We do not own or lease interests in any property.

Employees

We are currently in the development stage.  During this development period, we plan to rely exclusively on the services of, our officers and directors, to establish business operations and perform or supervise the minimal services our business requires at this time.  We believe that they are capable of handling our initial operations, which are primarily administrative at this time.  We have no other full or part-time employees.

There is no intention of hiring other employees until the business has been successfully launched and we have sufficient, sustained revenues flowing to AmerElite Solutions from our operations or have raised sufficient equity capital.  Human resource planning will be part of an ongoing process that will include regular evaluation of operations and revenue realization.

RESEARCH AND DEVELOPMENT

The President of AmerElite is performing the product development as part of his duties at no additional charge.  

 

 

 

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Item 1.    Description of Business – continued

 

COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

None.

Item 1A.    Risk Factors

INVESTING IN SHARES OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.   WE HAVE NOT GENERATED ANY SIGNIFICANT REVENUES AND HAVE NOT MADE A PROFIT SINCE INCEPTION.

Failure To Properly Manage Growth And Expansion Could Adversely Affect Our Business And Shareholder’s Equity.

 

We anticipate future growth from existing products and possible growth through newly developed products.   This growth will increase the demands on our management, operating systems and internal controls.  Consequently, our existing management resources and operational, financial, human and management information systems and controls may be inadequate to support its future operations.  We do not know if we will be able to manage our growth successfully.  As a result of these concerns, we may not be able to grow, or, if we do grow we do not know at what growth rate.

We Are A Development Stage Company, Have Not Generated Revenues, And May Not Generate Significant Revenues For Some Months .

 

AmerElite is a developmental stage company.  In the last 12 months we have not yet generated any revenues, and we cannot expect to generate substantial revenues until we have our advertising plan in operation.  We do not know when, if ever, our operations will be profitable.

 

Our Proposed Operations Are Subject To All Business Risks Associated With Newly Formed Enterprises That Intend To Rely On Direct Response Marketing, Including The Need To Make Substantial And Increasing Expenditures For Marketing, Research And Development.

 

Our potential success must be considered in light of the problems, expenses, difficulties, complications and delays, frequently encountered in connection with the competitive environment in which we operate.  We expect that our profitability if any will result from (a) increased revenues from sales; (b) increased consumer demand and (c) development of new products.   As with most new businesses, it may be difficult for us to generate revenues and profits in the future.

Our Business And Financial Results Cannot Be Predicted, And Will Vary From Expectations.

 

We expect that our results will vary significantly in the future due to a number of reasons, including:

 

·

Our ability to establish acceptance and usage of our products,

 

·

Our ability to contract with competent manufactures and appropriate retailers,

 

·

Costs related to future growth and capital investments

 

·

Results of strategic agreements with companies that supply and product our products,

 

·

Our ability to attract, retain and motivate qualified personnel

 

 

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Item 1A.    Risk Factors - continued

 

We Will Be Operating in a Highly Competitive Direct Response Marketing and Retail Environment.

 

We are aware of many competitors to our skin care collection, many of which are more, established and have significantly more financial resources than we do.  Our success in this industry is largely dependent on our ability to educate the consumer as to why our product is better than our competition and establish the consumer’s need for the products.  Our ability to compete effectively in this industry also depends on our ability to be competitive in pricing, servicing and performance.

  

Loss of Key Management Personnel Could Adversely Affect Our Business

 

Our success depends largely on the skills of certain key management personnel.  The loss of one or more members of our key management team may materially and adversely affect its business, financial condition, and results of operations. We particularly depend on our principal executive officers, Robert L. Knapp and Courtney Knapp. We intend on obtaining, but presently we do not have any key man insurance.

Our Officers and Directors May Be Subject to Conflicts Of Interest

Our officers and directors serve only part time and may be subject to conflicts of interest. They devote part of their working time to other business endeavors, including consulting relationships with other corporate entities, and have responsibilities to these other entities. Such conflicts include deciding how much time to devote to our business affairs, as well as what business opportunities should be presented to us. Because of these relationships, our officers and directors may be subject to conflicts of interest.

 

Dependence on Advertising and Marketing Firms.

 

AmerElite will require aggressive efforts in placing quality advertisements for the budgeted price that will reach the expected number of consumers.  We do not know if we will be able to obtain optimal advertising placement at our projected budget.

 

Failures or Lack of Reliability in Our Products Could Result in Loss of Business.

 

Only a limited amount of our products have been sold and used here in the United States.  Among other risks:

 

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Our products may fail to provide the expected results,

 

·

We may experience limited availability of quality ingredients for manufacturing

 

·

We may experience poor quality manufacturing

 

·

Our products may have new competition from other companies attempting to duplicate our formulas.

 

·

Our customers could experience results different from our test results

Dependence on Independent Operators Operating Retail Outlets for Our Products.

 

The success of our cart program in regional malls is dependent on signing license agreements with owner/operators.  The cart program is also dependent on the independent owner operators signing lease agreements with the malls. For us to continue a long-term relation with the owner/operators, the owner/operators have to be successful.  It is our intention to help the owner/operators be successful. If such owner/operators are ultimately not successful, we will need to replace the owner/operators to continue to maintain our retail outlets.  We do not know if our owner/operators will be successful or that we can replace unsuccessful owner/operators with adequate replacements.

 

Current and Potential Competition .

 

The retail industry for skin care products is tremendous.  If we are unable to educate the public through our infomercials, TV, radio and newspaper advertisements that our products are more beneficial to our customers, we may not successfully compete with others with greater financial resources and more established name recognition.

Control by Management .

 

Currently the Company’s two Officers and Directors own or control 51% of the outstanding shares of common stock.  Together with their immediate families they could control as much as 87%.  These officers with their family may be able to elect virtually all of the directors and control all operations of AmerElite Solutions, Inc.

 

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Item 1A.    Risk Factors - continued

 

Critical Accounting Policies

The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.

Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2   to the financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.

Seasonality

           

We have not noted a significant seasonal impact in our business.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.

Risks Relating to Patents, Copyrights, Trademarks, and Trade Names .

 

We believe that trade names, trademarks, and copyrights that we purchased will be increasingly important to us.  Applications will be filed to register additional trade names, trademarks and copyrights for products we will sell.  We will also institute an internal program to have all employees, consultant and vendors sign a Confidential Information and Trade Agreement.  Enforcing trade names, trademarks and copyrights against infringements, or defending against claims of infringement by others, can be time-consuming and expensive. Given our current stage of development, enforcing such claims could be cost-prohibitive to us.

 

 

 

 

 

 

 

 

 

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Item 1A.    Risk Factors - continued

   

If We are Unable to Protect Our Intellectual Property, Our Business Could Suffer .

 

Our future sales and expansion into additional markets will depend heavily upon our products that have been developed and upon products that are currently being developed.  Our Trade Secret program is currently being instituted to protect our proprietary formulas and these formulas are always at risk.  There is no assurance you that we can adequately protect this intellectual property.  If we fail to protect our intellectual property, we may lose any competitive advantage over our competitors, and our business could suffer.

To protect the formulas to our products and our products’ sales we may rely on a combination of:

 

·	Trade secret laws,
·	Copyright, trademark and trade name laws,
·	Confidentiality procedures and agreements,
·	Having unique product formulas.

 

These methods of protection may not be adequate to protect against using our technology and business methods. Accordingly, we cannot assure you that we will be able to maintain the advantage associated with our business methods, services or competitive features.

 

Despite our efforts to formally protect our intellectual property and keep information confidential, we may not be able to protect and use our intellectual property.  We may not be able to protect our formulations because:

 

·	Even if issued, new patents, trademarks, trade name or copyright registration may be challenged, invalidated or designed around.
·	We may not be granted adequate protection for our products, formulations and processes and parts of our technology may be found to be unable to be registered.
·	Time-consuming and costly litigation may be necessary to protect the Company’s proprietary technologies.
·	Policing unauthorized use of our intellectual property may be difficult and expensive.
·	Competitors may independently develop similar technology or design around our intellectual property.

Third Parties May Prevent Us from Developing or Using Intellectual Property.

 

We may not be able to use the intellectual property or further develop our business because of third parties.  We cannot assure you that third parties will not in the future claim infringement by us with respect to the current or future products.  These claims of infringement, whether successful or not, could seriously harm our business, or results of operations.

Third parties:

 

·	May bring claims of copyright, trade name or trademark infringement against us,
·	May obtain patents or other intellectual property rights which may limit our ability to use certain technologies or require us to license or cross license technology, or
·	May bring costly, time-consuming lawsuits.

 

We are not aware of any issued patents that cover formulations similar to the formulations in the products we have developed.

 

 

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Item 1A.    Risk Factors - continued

 

Receive a ‘Going Concern Opinion’ from Auditor.

For our 2012 and 2011 financial statements, the Company has received a “Going Concern Opinion” from its auditors.  The Company’s ability to execute its Business Plan is dependent upon its ability to raise funds for its direct-response marketing program.  Management’s plan is to raise capital by borrowing funds and/or offering shares of its common stock, $0.001 par value, on a “Best Efforts” basis to accredited investors only, pursuant to the exemption from registration contained in Section 4(2) and Regulation D adopted under the Securities Act of 1933 as amended.  Because the outcome of this future event is not susceptible to reasonable estimation by management it was determined that a “Going Concern Opinion” was appropriate.

Earnings Needed for Expansion .

We intend to retain most future earnings, net of dividends that may be paid on common stock, to fund the operation and expansion.  We may not generate profits and that will not permit us to pay cash dividends on our common shares.

We Will Require Additional Funding in the Future.

Based upon our historical losses from operations, we will require additional funding in the future. If we cannot obtain capital through financings or otherwise, our ability to execute our future exploration programs will be greatly limited. Our current plans require us to make capital expenditures for the future exploration of our natural resources properties. Historically, we have funded our operations through the issuance of equity and short-term debt financing arrangements. We may not be able to obtain additional financing on favorable terms, if at all. Our future cash flows and the availability of financing will be subject to a number of variables, including potential production and the market prices of certain resources. Further, debt financing could lead to a diversion of cash flow to satisfy debt-servicing obligations and create restrictions on business operations. If we are unable to raise additional funds, it would have a material adverse effect upon our business operations.

Government Regulation and Legal Uncertainties Could Adversely Affect the Company’s Business.

 

We believe that our business is not subject to material regulation under the laws of the United States or any of the states in which it plans to sell its products.  Laws and regulations often differ materially between states and within individual states such laws and regulations are subject to amendment and reinterpretation by the agencies charged with their enforcement.  If we become subject to any licensing or regulatory requirements, the failure to comply with any such requirements could lead to a revocation, suspension or loss of licensing status, termination of contracts and legal and administrative enforcement actions.  We cannot be sure that a review of our current and proposed operations will not result in a determination that could materially and adversely affect our business, results of operations and financial condition.  Moreover, regulatory requirements are subject to change from time to time and may in the future become more restrictive, thereby making compliance more difficult or expensive or otherwise affecting or restricting our ability to conduct our business as now conducted or proposed to be conducted.

Nevada Law and Our Articles Of Incorporation May Protect Our Directors from Certain Types of Lawsuits.

Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

Risks Associated With Our Common Stock

 

Absence of Public Market for Our Common Stock Creates Uncertainty in Liquidity and in Market Price.

 

There is presently no public trading market for our common stock; however it is likely that an active public trading market can be established and sustained in the near term.  We intend to have our common stock quoted on the OTC Bulletin Board as soon as practicable.  However, there can be no assurance that AMRX’s shares will be quoted on the OTC Bulletin Board.  Until there is an established trading market, holders of our common stock may find it difficult to sell their stock or to obtain accurate quotations for the price of the common stock.  If a market for our common stock does develop, our stock price may be volatile.

 

 

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Item 1A.    Risk Factors - continued

 

Broker-Dealers May Be Discouraged from Effecting Transactions in Our Shares Because They are Considered Penny Stocks and are Subject to the Penny Stock Rules.

 

There Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934 impose sales practice and disclosure requirements on FINRA broker-dealers who make a market in “penny stocks”.  A penny stock generally includes any non-Nasdaq equity security that has a market price of less than $5.00 per share. The Company’s 15c-211 application with FINRA was approved on May 11, 2012, and our shares are now eligible to be quoted on the OTC/Bulletin Board or “OTCBB”.  Our stock is considered as a “Penny Stock”.  Purchases and sales of our shares will be generally facilitated by FINRA broker-dealers who act as market makers for our shares.  The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sales of our shares in the secondary market.

Under  the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 together with his or his spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer’s account and information with respect to the limited market in penny stocks.

We Became Subject to the Periodic Reporting Requirements of the Securities Exchange Act Of 1934, Which Required Us to Incur Audit and Legal Fees in Connection with the Preparation of Such Reports.  These Additional Costs Will Negatively Affect Our Ability to Earn a Profit.

The issuer has been a fully-reporting Company since the second quarter of 2008 and is required to file periodic reports with the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934, and the rules and regulations hereunder.  In order to comply with such requirements, we utilize an outside accounting firm to prepare our financial statements and our independent registered auditors will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis.  Moreover, our legal counsel will have to review and assist in the preparation of such reports.  The costs charged by the by these professionals for such services cannot be accurately predicted at this time.  The incurrence of such costs will obviously be an expense to our operations, when incurred.

 

Because We Do Not Intend to Pay Any Dividends on Our Common Stock, Investors Seeking Dividend Income or Liquidity Should Not Purchase Shares of Our Common Stock.

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.  Investors seeking dividend income or liquidity should not invest in our common stock.

 

Because We Can Issue Additional Shares of Common Stock, Purchasers of Our Common Stock May Incur Immediate Dilution and May Experience Further Dilution.

We are authorized to issue up to 100,000,000 share of common stock of which 22,928,688 shares are issued and outstanding as of December 31, 2012.  We are authorized to issue up to 10,000,000 shares of preferred stock, of which 0 shares are issued and outstanding as of December 31, 2012.  Our Board of Directors has the authority to cause us to issue additional shares of common stock and preferred stock, and to determine the rights, preferences and privilege of such shares, without consent of any of our stockholders.   Consequently, the stockholders may experience more dilution in their ownership of AMRX in the future.

 

 

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Item 1B.    Unresolved Staff Comments

As of the date of this Annual Report, there are no unresolved comments pending from the Securities and Exchange Commission.

 

Item 2.    Description of Property

We do not own or lease interests in any property.

We do not intend to renovate, improve, or develop any real property. We are not subject to competitive conditions for property and currently have no property to insure.  We have no policy with respect to investments in interests in real estate and no policy with respect to investments in real estate mortgages.  Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities.

Item 3.    Legal Proceedings

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that has been threatened against us or our properties.

Item 4.   Unregistered Sales of Equity Securities and Use of Proceeds .

On August 2, 2012, the Company and holders of notes to affiliates 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 at $0.005 per share.

 

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 at $0.005 per share of Rule 144 restricted common 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.

In July 2012 the Directors authorized the Company and in September 2012 the Company converted $230,000 in accounts payable due to the Officers and Directors into two  convertible notes payable, with the holder having the right for twelve months to convert the notes into common stock at $.005, or 46,000,000 total common shares, which was considered to be the Company’s current fair market value.  The Company recognized no beneficial conversion feature expense on the notes.  Subsequently, the notes were acquired by an unaffiliated third party and consolidated into one note.  As of 12/31/12 the holder has not exercised the conversion of the note.

 

Item 5.    Submission of Matters to a Vote of Security Holders

None

 

 

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PART II

Item 6.    Market for the Registrant’s Common Equity, Related Shareholders Matters and Issuer Purchases of Equity Securities

The issuer’s 15c-211 application with FINRA was approved on May 11, 2012, and our common stock shares are now eligible for quotation on the OTC/Bulletin Board or “OTCBB” trading system.  The issuer’s assigned symbol is “AMRX”.

Holders

As of December 31, 2012, there were 73 holders of record of our common stock

Dividends

No dividends have ever been declared by the Board of Directors on our common stock. We do not anticipate paying cash dividends on our common stock in the foreseeable future.

Equity Compensation Plan

 

We do not have any equity compensation plans authorized or adopted however, we reserve the right to do so at a later date.

Unregistered Securities Sold

 

As of the date of this Annual Report and during fiscal year ended December 31, 2012, we did not issue any shares of our common stock to provide capital through private placement offerings.

Preferred Stock

 

The Company has 10,000,000 shares of authorized Class A Convertible Preferred Stock having a par value of $0.001 per share, as of December 31, 2012, and there are no (0) shares issued and outstanding.  The Preferred Stock, when issued, shall have the right to be converted at any time after two (2) years from the date of issuance into two (2) shares of common stock.

Ranking:    Our Series A Preferred Stock (“Class A Stock”) ranks, as to dividends and upon liquidation, senior and prior to our common stock, par value $0.001 per share (the “Common Stock”) and to all other classes of class of stock issued by the Issuer, except as otherwise approved by the affirmative vote or consent of the holders of a majority of the shares of outstanding Class A Stock.

 

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Item 6.    Market for the Registrant’s Common Equity, Related Shareholders Matters and Issuer Purchases of Equity Securities - continued

 

Liquidation Rights:   With respect to rights on liquidation, the Class A Stock shall rank senior and prior to our Common Stock and to all other classes or series issued by us, except as otherwise approved by the affirmative vote or consent of the holders of at least a majority of outstanding Class A Stock.

Shareholder Matters

As an issuer of "penny stock" the protection provided by the federal securities laws relating to forward looking statements does not apply to us if our shares are considered to be penny stocks which they currently are and probably will be for the foreseeable future. Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.

 

As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law described below create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.

 

Directors' Duties. Section 78.138 of the Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our board of directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause us to file for bankruptcy protection

 

Dissenters' Rights .  Among the rights granted under Nevada law which might be considered material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see Nevada Revised Statutes ("NRS") 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either by Nevada law or by the terms of the articles of incorporation.

 

A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:

 

·              listed on a national securities exchange,

·              included in the national market system by the National Association of Securities Dealers, or

·              held of record by not less than 2,000 holders.

This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.

 

Inspection Rights . Nevada law also specifies that shareholders are to have the right to inspect company records (see NRS 78.105). This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of:

 

                    i.         the articles of incorporation, and all amendments thereto,

 

                   ii.         bylaws and all amendments thereto; and

 

                  iii.         a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.

 

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Item 6.    Market for the Registrant’s Common Equity, Related Shareholders Matters and Issuer Purchases of Equity Securities - continued

 

In lieu of the stock ledger or duplicate stock ledger, Nevada law provides that the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.

 

Control Share Acquisitions . Sections 78.378 to 78.3793 of Nevada law contain provisions that may prevent any person acquiring a controlling interest in a Nevada-registered company from exercising voting rights. To the extent that these rights support the voting power of minority shareholders, these rights may also be deemed material. These provisions will be applicable to us as soon as we have 200 shareholders of record with at least 100 of these having addresses in Nevada as reflected on our stock ledger. While we do not yet have the required number of shareholders in Nevada or elsewhere, it is possible that at some future point we will reach these numbers and, accordingly, these provisions will become applicable. We do not intend to notify shareholders when we have reached the number of shareholders specified under these provisions of Nevada law. Shareholders can learn this information pursuant to the inspection rights described above and can see the approximate number of our shareholders by checking under Item 5 of our annual reports on Form 10-K. This form is filed with the Securities and Exchange Commission within 90 days of the close of each fiscal year hereafter. You can view these and our other filings at www.sec.gov in the "EDGAR" database.

 

Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in company shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested shareholders at a special shareholders' meeting held upon the request and at the expense of the acquiring person. If the acquiring person's shares are accorded full voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any shareholder, other than the acquiring person, who does not vote for authorizing voting rights for the control shares, is entitled to demand payment for the fair value of their shares, and we must comply with the demand. An "acquiring person" means any person who, individually or acting with others, acquires or offers to acquire, directly or indirectly, a controlling interest in our shares. "Controlling interest" means the ownership of our outstanding voting shares sufficient to enable the acquiring person, individually or acting with others, directly or indirectly, to exercise one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more of the voting power of our shares in the election of our directors. Voting rights must be given by a majority of our disinterested shareholders as each threshold is reached or exceeded. "Control shares" means the company's outstanding voting shares that an acquiring person acquires or offers to acquire in an acquisition or within 90 days immediately preceding the date when the acquiring person becomes an acquiring person.

 

These Nevada statutes do not apply if a company's articles of incorporation or bylaws in effect on the tenth day following the acquisition of a controlling interest by an acquiring person provide that these provisions do not apply.

 

According to NRS 78.378, the provisions referred to above will not restrict our directors from taking action to protect the interests of our Company and its shareholders, including without limitation, adopting or executing plans, arrangements or instruments that deny rights, privileges, power or authority to a holder of a specified number of shares or percentage of share ownership or voting power. Likewise, these provisions do not prevent directors or shareholders from including stricter requirements in our articles of incorporation or bylaws relating to the acquisition of a controlling interest in the Company.

 

Our articles of incorporation and bylaws do not exclude us from the restrictions imposed by NRS 78.378 to 78.3793, nor do they impose any more stringent requirements.

 

Certain Business Combinations . Sections 78.411 to 78.444 of the Nevada law may restrict our ability to engage in a wide variety of transactions with an "interested shareholder." As was discussed above in connection with NRS 78.378 to 78.3793, these provisions could be considered material to our shareholders, particularly to minority shareholders. They might also have the effect of delaying or making more difficult acquisitions of our stock or changes in our control. These sections of NRS are applicable to any Nevada company with 200 or more stockholders of record and that has a class of securities registered under Section 12 of the 1934 Securities Exchange Act, unless the company's articles of incorporation provide otherwise. By this registration statement, we are registering our common stock under Section 12(g) of the Exchange Act.  Accordingly, upon the effectiveness of this registration statement on Form 10-SB we will be subject to these statutes as our Articles of Incorporation do not exempt us from them.

 

These provisions of Nevada law prohibit us from engaging in any "combination" with an interested stockholder for three years after the interested stockholder acquired the shares that cause him to become an interested shareholder, unless he had prior approval of our board of directors. The term "combination" is described in NRS 78.416 and includes, among other things, mergers, sales or purchases of assets, and issuances or reclassifications of securities. If the combination did not have prior approval, the interested shareholder may proceed after the three-year period only if the shareholder receives approval from a majority of our disinterested shares or the offer meets the requirements for fairness that are specified in NRS 78.441-42. For the above provisions, "resident domestic corporation" means a Nevada corporation that has 200 or more shareholders. An "interested stockholder" is defined in NRS 78.423 as someone who is either:

 

 

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Item 6.    Market for the Registrant’s Common Equity, Related Shareholders Matters and Issuer Purchases of Equity Securities - continued

 

§            the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding voting shares; or

 

§            our affiliate or associate and who within three years immediately before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding shares at that time.

Amendments to Bylaws -   Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the board of directors. In exercising this discretion, our board of directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.

Voting:   The Class A Stockholders shall be entitled to ten (10) votes for each share of Class A Stock held on any matters requiring a shareholder vote of AMRX.

 

Conversion:   Any Class A Stockholder shall have the right, at any time after two (2) years from the date of issuance, to convert any or all of its Class A Stock into two (2) shares of fully paid and non-assessable shares of Common Stock for each share of Class A Stock so converted.

 

Item 7.    Selected Financial Data

Not Applicable

Item 8.  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 12 months ended December 31, 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-K 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 Collesense™ 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 Collesense™ 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.

 

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Item 8.  Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

 

As of December 31, 2012, the Company’s Notes Payable was $249,775.  Currently, the Company has an average of $1,200 per month in costs and expenses.  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 Company’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.  

 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 2007 we manufactured the 6 products in the Collesense™ Premium Skin Care Collection.  In February 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 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 Collesense™ products at four price points.

Based on input from industry professionals, management is reviewing several alternative names for a product line that will consist of the same 6 products that made up the Collesense™ Premium Skin Care Collection.  The new product line will be manufactured and packaged for both domestic and international markets.

 

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Item 8.  Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

 

During the year ended December 31, 2012 we have continued the following steps to implement our business plans:

·

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 an e-commerce website, developing our economic models and financial forecasts.

Results of Operations:

 

For the year ended December 31, 2012, we generated $0 in revenue compared to revenues of $0 for the same period ending December 31, 2011. Net losses for the twelve months ending December 31, 2012 were $(62,273) compared to net losses of $(13,701) for the same period ending December 31, 2011, and were primarily attributable to administrative expenses, professional and consulting fees.  One of the officers is providing office space to the company at no charge as of the same date.

For the year ended December 31, 2012, we continued to promote the six products that make up the Collesense Premium Skin Care Collection.  Due to the absence of an advertising and marketing budget and retail operation in 2012, we had no revenue from sales.  The total Operating Expenses for the period ending December 31, 2012 were $58,209.  These expenses were comprised of $0 for salaries and wages; $51,488 for professional and consulting fees; $6,762 for general and administrative expense.  With a Gross Profit of $0 and operating expenses totaling $62,224, the Company had a loss from operation in the twelve (12) months ending December 31, 2012 of $62,224.

Liquidity and Capital Resources:

 

At December 31, 2012, the Company’s total current liabilities of $291,281 exceeded total assets of $1,696. We had cash on hand of $561.  The Company’s current cash requirement is an average of $1,200 per month.   AmerElite does not anticipate cash flows from revenues will be adequate to fund our operations and business plan over the next twelve (12) months.  We have no lines of credit or other bank financing arrangements.  The Company’s management made arrangements to borrow $27,375 to pay for the necessary expenses during the year ending December 31, 2012.  The Company’s management plans to raise the majority of this capital needed by borrowing funds and/or from private placement of equity.  However, there is no assurance that financing will be available on reasonable terms or at all.  AmerElite Solutions intends to use its working capital principally to purchase inventory, fund media advertising and fund the Company’s overhead and operating costs.

On December 17, 2012 the Directors authorized the Company to cancel 1,250,000 shares of Class A Preferred Stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company. The Company has no Class A Preferred Stock issued or outstanding as of December 31, 2012.

 

On December 17, 2012 the Directors authorized the Company to cancel 4,433,550 shares of the Company’s common stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company.

 

On August 2, 2012, the Company and holders of notes to affiliates 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 at $0.005 per share. These shares are restricted and include an appropriate restrictive legend.

 
 

 

  

 

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Item 8.  Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

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, at $0.005 per share, of Rule 144 restricted common 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.

In July 2012 the Directors authorized the Company and in September 2012 the Company converted $230,000 in accounts payable due to the Officers and Directors into two convertible notes payable, with the holder having the right for twelve months to convert the notes into common stock at $.005, or 46,000,000 total common shares, which was considered to be the Company’s current fair market value.  The Company recognized no beneficial conversion feature expense on the notes.  Subsequently, the notes were acquired by an unaffiliated third party and consolidated into one note.  As of 12/31/12 the holder has not exercised the conversion of the note.

 

On March 15, 2013 the Company executed a binding Letter of Intent to merge with RegalWorks Media Group, Inc. (RWMG).  The Company, upon completion of the merger, will change its name to Regal Works Media Group, Inc. RWMG is building an integrated media holding company for today’s media entertainment environment.  The Letter of Intent requires the issuer to tender all outstanding obligations prior to closing, and affect a reverse stock split of the Company’s common stock at a ratio of 50 to 1 or such other ratio as deemed suitable by both parties. The Company may have as much as 70,000,000 shares of common stock issued and outstanding prior to the reverse stock split.  The transaction will take the form of a “reverse acquisition” with the owners of RWMG initially controlling 80% of the outstanding stock of the Company in a tax free exchange and with RWMG’s executive team replacing AmerElite’s officers and directors.  The completion of the transaction will be subject to a number of conditions precedents, including satisfactory completion of due diligence, completion and execution of definitive documentation, and approval of the Company’s shareholders and Board of Directors and other conditions.  There can be no assurance that all conditions will be satisfied or that, if satisfied the transaction will close.

The Company has limited capital resources as, among other things, the Company is a startup company with limited operating history.  The Company has not generated any revenues for 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 Collesense™ product line which will produce product for sale.  Production is predicated on financing or loans from various parties.

The Company’s cash reserves are not sufficient to meet its 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 as to how we will obtain such funding; however, we anticipate that such 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 include 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 8A.  Quantitative and Qualitative Disclosers About Market Risk.

We are a smaller reporting company as defined by Rule 126-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

 

 

 

 

 

 

 

 

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Item 9.  Financial Statements and Supplementary Data

 

 

 

 

 AmerElite Solutions, Inc.

(A Development Stage Company)

 

Index to Financial Statements

 

	Page
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2012 and 2011	F-2
Statements of Operations for the Years Ended December 31, 2012 and 2011 and from Inception (July 26, 1994) to December 31, 2012	F-3
Statements of Stockholders' Equity from Inception (July 26, 1994) to December 31, 2012	F-4 to F-6
Statements of Cash Flows for the Years Ended December 31, 2012 and 2011 and from Inception (July 26, 1994) to December 31, 2012	F-7
Note to the Financial Statements	F-8 to F-12

 

 

 

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RONALD R. CHADWICK, P.C.

Certified Public Accountant

2851 South Parker Road, Suite 720

Aurora, Colorado  80014

Telephone (303)306-1967

Fax (303)306-1944

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

AmerElite Solutions, Inc.

Phoenix, Arizona

 

I have audited the accompanying balance sheets of AmerElite Solutions, Inc. (a development stage company) as of December 31, 2012 and 2011, and the related  statements of operations, stockholders’ equity and cash flows for the years then ended, and for the period from July 26, 1994 (inception) through December 31, 2012. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. The financial statements for the period from July 26, 1994 (inception) through December 31, 2007 were audited by other auditors, whose report expressed a going concern on those statements. The financial statements for the period from July 26, 1994 (inception) through December 31, 2007 included a net loss of $2,120,634. My opinion on the statements of operations, stockholders’ equity and cash flows for the period from July 26, 1994 (inception) through December 31, 2012, insofar as it relates to amounts for prior periods through December 31, 2007, is based solely on the report of other auditors.

 

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.

 

In my opinion, the financial statements referred to above present fairly, in all material respects, the  financial position of AmerElite Solutions, Inc. as of December 31, 2012 and 2011 and the results of its operations and its cash flows for the years then ended, and for the period from July 26, 1994 (inception) through December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying  financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements the Company has suffered losses from operations and has a working capital deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Aurora, Colorado	/s/ Ronald R. Chadwick, P.C.
March 30, 2013	RONALD R. CHADWICK, P.C.

 

 

 

F-1

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Am erElite Solutions, Inc.

(A Development Stage Company)

 

Balance Sheets

 

		December 31				December 31,
		2012				2011
		Audited				Audited
ASSETS
Current Assets:
Cash and Cash Equivalents		$	561			$	610
Total Current Assets			561				610
Other Assets:
Deposits			1,135				1,335
Total Assets		$	1,696			$	1,945
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable		$	37,491			$	240,544
Accrued Expenses			4,015				-
Notes Payable (Note 4)			249,775				55,300
Total Current Liabilities			291,281				295,844
Total Liabilities			291,281				295,844
Stockholders' Equity/(Deficit): (Note 5)
Preferred Stock, Par Value $0.001 per share; authorized
10,000,000 and 2,000,000 shares in 2012 and 2011, respectively;
issued and outstanding -0- and 1,250,000 shares in 2012
and 2011, respectively			-0-				1,250
Common Stock, Par Value $0.001;
Authorized 100,000,000 and
20,000,000 shares in 2012 and 2011, respectively; issued and
outstanding 22,928,688 and 14,824,353 shares in  2012 and
2011, respectively.			22,929				14,824
Additional Paid-in Capital			3,062,100				3,002,368
Accumulated Deficit during Development Stage			(3,374,614	)			(3,312,341	)
Total Stockholders' Equity/(Deficit)			(289,585	)			(293,899	)
Total Liabilities and Stockholders' Equity		$	1,696			$	1,945
The accompanying notes are an integral part of these statements

 

 

 

 

 

F-2

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AmerElite Solutions, Inc.

(A Development Stage Company)

 

  Statements of Operations

			Year Ended				Year Ended				July 26, 1994
			December 31				December 31				(Inception)
											to December 31
			2012				2011				2012
Revenue			$	0			$	0			$	21,759
	Total Revenue			0				0				21,759
Cost of Goods Sold				0				0				5,320
Gross Profit				0				0				16,439
Operating Expenses
	Salaries and Wages											1,059,698
	General and Administrative			6,812				4,249				920,314
	Professional and Consulting			51,448				9,452				603,428
	Product Development											84,851
Current Liabilities:
	Marketing											289,551
	Investor Relations											465,672
	Accrued Expenses
	Notes Payable (Note 4)			58,209				13,701				3,423,514
(Loss) from Operations				(58,209	)			(13,701	)			(3,407,075	)
Other Income/(Expense)
	Other Income											4,519
	Interest Income											45,173
	Interest Expense			(4,014	)							(17,231	)
	Total Other Income/(Expense)			(4,014	)							32,461
Net Income/(Loss) Before Income Taxes
	Income/(Loss) Before Income Taxes			(62,223	)			(13,701	)			(3,374,614	)
	Income Tax Expense			-				-				-
Net Income(Loss)
	Income/(Loss)		$	(62,273	)		$	(13,701	)		$	(3,374,614	)
Basic (Loss) per Share			$	(0.003	)		$	(0.001	)
Weighted Average Number of Common Shares				19,521,379				15,041,020
The accompanying notes are an integral part of these statements

 

 
 

 

 

 
 

 

F-3

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AmerElite Solutions, Inc.

(A Development Stage Company)

 

 Statements of Stockholders' Equity

Inception 26-Jul-1994 to 31- December 2012

																										(Deficit)
																										Accumulated
																						Stock				During
		Preferred Stock								Common Stock								Paid in				Subscriptions				Development				Total
		Shares				Amount				Shares				Amount				Capital				(Receivable)				Stage				Equity
Balance, Inception July 26, 1994			-			$	-				-			$	-			$	-			$	-				-			$	-
Common Shares issued to founders
26-Jul-1994 @ $0.00125 per share											2,080,000				2,080				520												2,600
Common Shares issued for services
26-Jul-1994 @ $0.00125 per share											80,000				80				20												100
Net (Loss)																											(49,500	)			(49,500	)
Balance, December 31, 1994			-				-				2,160,000				2,160				540				-				(49,500	)			(46,800	)
Common Shares issued for Cash on											80,000				80				49,920												50,000
29-June-1995 @ $1.25 per share																											(181,369	)			(181,369	)
Current Liabilities:			-				-				2,240,000				2,240				50,460				-				(230,869	)			(178,169	)
Common Shares issued for Cash on
3-May-05 @ $0.50 per share											200,000				200				99,800				(85,000	)							15,000
Common Shares issued to purchase
Assets on 11-May-05 @ $0.50											800,000				800				399,200												400,000
Common Shares issued for Cash on
21-Jul-05 @ $1.00 per share											250,000				250				249,750				(250,000	)							-
Stockholders' Equity/(Deficit): (Note 5)
Common Shares issued for Service
on 13-Oct-05 @ $0.83 per share											370,000				370				443,630												444,000
Common Shares returned and cancelled
on 13-Oct-05 @ $0.83 per share											(50,000	)			(50	)			(59,950	)											(60,000	)
Net (Loss)																											(483,422	)			(483,422	)
Balance, December 31, 2005							-				3,810,000				3,810				1,182,890				(335,000	)			(714,291	)			137,409
Common Shares issued for Service on
27-Jan-06 @ $0.683 per share											205,000				205				139,795												140,000
Common Shares issued for employee
Compensation on 27-Jan-06 @ $0.60											327,500				327				196,173												196,500
Common Shares issued for Service
on 8-May-06 @ $0.828 per share											20,360				20				16,840												16,860
Common Shares issued for Service
on 14-Jul-06 @ $0.312 per share											410,000				410				127,590												128,000
Common Shares issued for Service
on 17-Jul-06 @ $0.50 per share											500,000				500				249,500												250,000
Common Shares issued for Service
on 8-Nov-06 @ $0.50 per share											30,000				30				14,970												15,000
Net (Loss)																											(936,760	)			(936,760	)

 

 

 

 

F-4

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Statements of Stockholders' Equity - continued

Balance, December 31, 2006			-				-				5,302,860				5,302				1,927,758				(335,000	)			(1,651,051	)			(52,991	)
Common Shares issued for Service
on 24-Jan-07 @ $0.33 per share											160,000				160				52,840												53,000
Cash Received on Subscriptions																							258,774								258,774
Preferred Shares issued for Officer
compensation on 20-Feb-07 @ $0.30			250,000				250												74,750												75,000
Common Shares issued for employee
compensation on 3-Jul-07 @ $0.10											900,000				900				89,100												90,000
Common Shares issued for Service
on 3-Jul-07 @ $0.10 per share											550,000				550				54,450												55,000
Preferred Shares issued for Officer
compensation on 3-Jul-07 @ $0.10			300,000				300												29,700												30,000
Common Shares issued for Service
on 10-Jul-07 @ $0.03 per share											500,000				500				14,500												15,000
Common Shares issued for Service
on 24-Jul-07 @ $0.167 per share											360,000				360				59,640												60,000
Common Shares issued to Retire Debt
on 24-Jul-07 @ $0.199 per share											892,387				892				177,585												178,477
Net (Loss)																											(469,583	)			(469,583	)
Balance, December 31, 2007			550,000				550				8,665,247			$	8,664				2,480,323				(76,226	)			(2,120,634	)			292,677
Net (Loss)																											(814,847	)			(814,847	)
Balance, December 31, 2008			550,000				550				8,665,247			$	8,664				2,480,323				(76,226	)			(2,935,481	)			(522,170	)
Common Shares returned and cancelled
in April 09 @ $0.00125 per share											(1,694,280	)			(1694	)			1694												0
Common Shares issued to Retire Debt
on 01-June-09 @ $0.03 per share											4,066,669				4,067				117,933												122,000
Common Shares issued to Retire Debt
on 08-June-09 @ $0.02 per share											125,000				125				2,375												2,500
Preferred Shares (700,000 shares at
$0.10 per share for $70,000 total) and
Common Shares (2,703,550 shares at
$0.10 per share for $270,355 total)
issues for debt relief of $283,755 and			700,000				700												69,300												70,000
$56,600 of compensation on 09-June-09											2,703,550				2,704				267,651												270,355
Common Shares issued for Service
on 09-June-09 @ $0.03 per share											908,167				908				26,337												27,245
Common Shares issued for debt relief
on 09-June-09 @ $0.10 per share											310,000				310				30,690												31,000
Net (Loss)																											(280,818	)			(280,818	)

 

 

 

F-5

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Statements of Stockholders' Equity - continued

Balance, December 31, 2009			1,250,000				1,250				15,084,353				15,084				2,996,303				(76,226	)			(3,216,299	)			(279,888	)
			-
Net (Loss)																											(82,341	)			(82,341	)
Balance, Dec., 31, 2010			1,250,000				1,250				15,084,353				15,084				2,996,303				(76,226	)			(3,298,640	)			(362,229	)
Paid in capital - Debt Relief																			82,031												82,031
Sub. Rec. reversed off as uncollectable																			(76,226	)			76,226								0
Common Shares  cancelled
in October 11 @ $0.00125 per share											(260,000	)			(260	)			260												0
Net (Loss)																											(13,701	)			(13,701	)
Balance, December 31,  2011			1,250,000				1,250				14,824,353				14,824				3,002,368				-				(3,312,341	)			(293,899	)
Common Shares Cancelled
in February 12 @ $0.001 per share											(643,265	)			(643	)			643												0
Rounding Effect															1				(1	)
Common Shares Cancelled
on August 1 @ $0.001 per share											(136,350	)			(136	)			136												0
Common Shares Issued
on August 2 @ $0.005 per share for Consulting Services											737,500				737				2,950												3687
Common Shares Issued											12,580,000				12580				50,320												62900
on August 2 @ $0.005 per share for debt relief
Common Shares Cancelled											(4,433,550	)			(4434	)			4,434												0
on December 17 @ $0.001 per share
Preferred Shares cancelled (250,000 shares)			(250,000	)			(250	)											250												0
on 12/17/12 @ $0.001 per share
Preferred Shares cancelled (300,000 shares)			(300,000	)			(300	)											300												0
on 12/17/12@ $0.001 per share
Preferred Shares cancelled (700,000 shares)			(700,000	)			(700	)											700												0
on 12/17/12@ $0.001 per share
Net (Loss)																											(62,273	)			(62,273	)
Balance, December 31,  2012
		$	-			$	-				22,928,688			$	22,929			$	3,062,100			$	-			$	(3,374,614	)		$	(289,585	)

 

The Company was inactive from 1995 to 1997 and again from 1999 through 2004. The Company has summarized the accumulated deficit for those periods in these statements.

An 8 for 1 forward stock split on April 16, 1997 and a 1 for 10 reverse stock split on December 8, 2006 have been retroactively applied to the above schedule.

The accompanying notes are an integral part of these statements

 

 

F-6

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AmerElite Solutions, Inc.

(A Development Stage Company)

 

 Statements of Cash Flows

 

		Year Ended				Year Ended				July 26, 1994
		December 31				December 31				(Inception)
										to December 31
		2012				2011				2012
Operating Activities
Net Loss		$	(62,273	)		$	(13,701	)		$	(3,374,614	)
Adjustments to reconcile Net Loss:
Stock Issued for Services			3,687				0				1,598,592
Depreciation and Amortization			0				1,941				20,441
Changes in Operating Assets and Liabilities
(Increase)/Decrease in Deposits			200				200				(1,135	)
Increase/(Decrease) in Accounts Payable			26,946				(1,487	)			1,052,458
Increase/(Decrease) in Accrued Liabilities			4,015				0				74,015
Write Offs			0				0				435,279
Net Cash (Used) by Operating Activities			(27,425	)			(13,047	)			(194,964	)
Investment Activities
Investment in Trademarks and Trade Names			0				0				(13,729	)
Current Liabilities:
Purchase of Equipment			0				0				(20,441	)
Accrued Expenses			0				0				(34,170	)
Notes Payable (Note 4)
Financing Activities
Proceeds from Loans			27,375				12,900				335,386
(Repayment) of Loans			0				0				(366,563	)
Proceeds from the Sale of Stock			0				0				260,872
Stockholders' Equity/(Deficit): (Note 5)
Net Cash Provided by Financing Activities			27,375				12,900				229,695
Net Increase / (Decrease) in Cash			(50	)			(147	)			561
Cash, Beginning of Period			610				757				-
Cash, End of Period		$	561			$	610			$	561
Supplemental Information:
Interest Paid		$	0			$	0			$	13,217
Income Taxes Paid		$	0			$	0			$	0
Significant Non-Cash Transactions:
Stock issued to Convert Debt		$	62900			$	0			$	616,132
Paid in Capital - Debt Relief		$	0			$	82,031			$	82,031
Stock Issued to Acquire Assets		$	0			$	0			$	400,000
Stock Issued for Services		$	3,006			$	0			$	3,006
Notes Issued for Accounts Payable		$	230,000			$	0			$	230,000
The accompanying notes are an integral part of these statements

 

 

F-7

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AMERELITE SOLUTIONS, INC.

(A Development Stage Company)

NOTES TO AUDITED FINANCIAL STATEMENTS

December  31, 2012 and 2011

NOTE 1     GENERAL ORGANIZATION AND BUSINESS

AmerElite Solutions, Inc. (the Company) was 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.

NOTE 2      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Financial Instruments

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

Accounting Basis

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Cash and cash equivalents

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

Earnings (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.

 

F-8

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AMERELITE SOLUTIONS, INC.

(A Development Stage Company)

NOTES TO AUDITED FINANCIAL STATEMENTS

December  31, 2012 and 2011

NOTE 2. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Furniture and equipment

The cost of furniture, equipment and computer hardware and software is depreciated over the estimated useful lives of the related assets.  The Company’s furniture and equipment has been fully depreciated and has been shown with no value on the Balance Sheet.

Long Lived Assets

In accordance with ASC350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment.  If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company, if the carrying amount of a long-lived asset exceeds its fair value.

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 carry forwards 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.

At December 31, 2012 and 2011 the Company had net operating loss carry-forwards of approximately $3,374,404 and $3,312,130, respectively, which begin to expire in 2014.  The deferred tax asset of approximately $1,181,041 and $1,159,245 in 2012 and 2011, respectively, created by the net operating losses have been offset by a 100% valuation allowance.  The change in the valuation allowance in 2012 and 2011 was $21,796 and $5,000, respectively.

 

F-9

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AMERELITE SOLUTIONS, INC.

(A Development Stage Company)

NOTES TO AUDITED FINANCIAL STATEMENTS

December  31, 2012 and 2011

 

NOTE 2. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

 

Revenue and Cost Recognition

The Company recognizes revenue from product sales upon shipment, which is the point in time when risk of loss is transferred to the customer, net of estimated returns and allowances.

Stock Based Compensation

The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred.   The Company incurred no advertising costs during the years ending December 31, 2012 and 2011.

NOTE 3.     GOING CONCERN

The Company has suffered recurring losses from operations and has a working capital deficit and stockholders’ deficit and in all likelihood will be required to make significant future expenses in connection with continuing marketing efforts along with general administrative expenses.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowing from financial institutions.  By doing so, the Company believes through increased marketing efforts to generate greater revenues from sales of its skin care products.  Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

 

F-10

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AMERELITE SOLUTIONS, INC.

(A Development Stage Company)

NOTES TO AUDITED FINANCIAL STATEMENTS

December  31, 2012 and 2011

NOTE 4.             NOTES PAYABLE

The following is a summary of Notes Payable at December 31, 2012 and 2011:

		2012				2011
2% Notes Payable to affiliates, due on demand, with
interest payable quarterly, unsecured		$	0			$	50,300
2% Notes Payable to unaffiliated third parties, due on
demand, with interest payable quarterly			249,775				5,000
		$	249,775			$	55,300

 

Notes Payable has accrued interest payable in the amount of $4,014 at December 31, 2012 with interest expense of $4,014 for the year ending December 31, 2012.

On August 2, 2012, the Company and holders of notes to affiliates 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 at $0.005 per share.

In July 2012 the Directors authorized the Company and in September 2012 the Company converted $230,000 in accounts payable due to the Officers and Directors into two  convertible notes payable, with the holder having the right for twelve months to convert the notes into common stock at $.005, or 46,000,000 total common shares, which was considered to be the Company’s current fair market value.  The Company recognized no beneficial conversion feature expense on the notes.  Subsequently, the notes were acquired by an unaffiliated third party and consolidated into one note.  As of 12/31/12 the holder has not exercised the conversion of the note.

 

F-11

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AMERELITE SOLUTIONS, INC.

(A Development Stage Company)

NOTES TO AUDITED FINANCIAL STATEMENTS

December  31, 2012 and 2011

NOTE 5.      STOCKHOLDERS’ EQUITY

Preferred Stock:

On December 17, 2012 the Directors authorized the Company to cancel 1,250,000 shares of Class A Preferred Stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company. The Company has no Class A Preferred Stock issued or outstanding as of December 31, 2012.

Common Stock:

On December 17, 2012 the Directors authorized the Company to cancel 4,433,550 shares of the Company’s common stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company.

NOTE 6.        SUBSEQUENT EVENTS:

On March 15, 2013 the Company executed a binding Letter of Intent to merge with RegalWorks Media Group, Inc. (RWMG).  The Company, upon completion of the merger, will change its name to Regal Works Media Group, Inc. RWMG is building an integrated media holding company for today’s media entertainment environment.  The Letter of Intent requires the issuer to tender all outstanding obligations prior to closing, and affect a reverse stock split of the Company’s common stock at a ratio of 50 to 1 or such other ratio as deemed suitable by both parities. The Company will have approximately 70,000,000 shares of common stock issued and outstanding prior to the reverse stock split.  The transaction will take the form of a “reverse acquisition” with the owners of RWMG initially controlling 80% of the outstanding stock of the Company in a tax free exchange and with RWMG’s executive team replacing AmerElite’s officers and directors.  The completion of the transaction will be subject to a number of conditions precedents, including satisfactory completion of due diligence, completion and execution of definitive documentation, and approval of the Company’s shareholders and Board of Directors and other conditions.  There can be no assurance that all conditions will be satisfied or that, if satisfied the transaction will close.

 

 

F-12

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Item 10.  Changes In and Disagreements with Accountants on Accounting Policies

We have had no disagreements with accountants on accounting and financial disclosure.

Item 10A.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives.  In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  The Company’s certifying officer has concluded that the Company’s disclosure controls and procedures are not effective in reaching that level as assurance.

At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.  Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  Our management evaluated, under the supervision and with the participation of our Chief Executive Officer, the effectiveness of our internal control over financial reporting as of December 31, 2012.  Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures the (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Based on its evaluation under the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission, our management concluded that our internal control over financial reporting was not effective as of December 31, 2012, due to the existence of significant deficiencies constituting material weaknesses, as described in greater detail below.  A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, management identified the following control weaknesses:

(1)           The Company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions.  The Company has not implemented measures that would prevent the individuals from overriding the internal control system.  The Company does not believe that this control weakness has resulted in deficient financial reporting because the Chief Financial Officer is aware of his responsibilities under the SEC’s reporting requirements and personally certifies the financial reports;

(2)           The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.

(3)           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.

 

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Item 10A.  Controls and Procedures - continued

 

These weaknesses create 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 December 31, 2012 financial statements.

CHANGES IN INTERNAL CONTROLS

During the twelve months ended December 31, 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 Thus, management believes that there were no changes in the Company’s internal controls over financial reporting that occurred during the twelve months ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles.  Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weakness through various steps.

Remediation Plan

We have identified that additional staff will be required to properly segment the accounting duties of the Company.  However, we do not currently have resources to fulfill this part of our plan and will be addressing this matter once sufficient resources are available.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2012 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

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

 

Item 10B.  Other Information

None

 

 
 

 

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PART III

 

Item 11. Directors, Executive Officers and Corporate Governance

 

Our Bylaws provide that we must have at least one director. Each director will serve until our next annual shareholder meeting, to be held sixty days after the close of the fiscal year, or until a successor is elected who accepts the position. Directors are elected for one-year terms. Our Board of Directors may elect our officers at any regular or special meeting of the Board of Directors.

Vacancies may be filled by a majority vote of the remaining directors then in office. Our directors and executive officers are as follows:

Name	Age	Position
Robert L. Knapp	44	Director/President
Courtney Knapp	40	Director

 

Business Experience

The following is a brief description of the education and business experience of each director and officer during at least the past five years, indicating each person's business experience, principal occupation during the period, and the name and principal business of the organization by which he was employed.

 

Rob Knapp, President/Director

 

As President, Mr. Knapp has over 14 years of executive experience serving both public and private companies.  His experience includes; executive management, business development, e-commerce, product launch and development, marketing, systems management & budgeting and forecasting.

Since 2005, Mr. Knapp has served as CEO/President of AmerElite Solutions, Inc.  During this time Mr. Knapp has spearheaded the development and launch of six products that make the Collesense™ Premium Skin Care Collection.  He also has secured over 1 million dollars used to fund research and development, manufacturing, advertising and marketing, investor relations and daily operations.  Additionally, he has overseen the company’s retail operations and an e-commerce site in which Collesense™ is currently available for sale.  Mr. Knapp received his BS from Michigan State University.  Mr. Knapp is currently devoting approximately 10 hours a week of his time to the Company, and is planning to continue to do so during the next 12 months of operation.

Mr. Knapp is not an officer or director of any reporting company that files annual, quarterly, or periodic reports with the United States Securities and Exchange Commission.

Courtney Knapp, Director

 

Courtney Knapp, Director of AmerElite Solutions, graduated from Michigan State University with a Bachelor of Arts in Business Administration, Materials and Logistics Management.  In 1995 she went to work in Commercial Real Estate in some of Chicago’s premier office properties.  Managing both historical and modern properties she was responsible for the budget development, management and reporting, construction and maintenance projects, contract management and tenant relations.  

Since 2005, Ms. Knapp has been actively involved with the development and implementation of a number of corporate web sites for several different companies.  She has set up e-commerce sites and coordinated with outside professionals to strategically and successfully market these sites via search engines and email campaigns.   Ms. Knapp recently designed and developed web sites for two publicly traded companies, and has written product testing protocols for AmerElite Solutions, assisted in writing and posting Company news releases, manufactured the Company’s intellectual property, Collamin_G®, and assisted in the development, texture, fragrance and color of the Collesense™ product line.  She brings her experience with e-commerce, web site development and Internet marketing as well as product development and procurement to AmerElite Solutions.

Ms. Knapp is currently devoting approximately 2-3 hours a week of her time to the Company, and is planning to continue to do so during the next 12 months of operation.

Ms. Knapp is not an officer or director of any reporting company that files annual, quarterly, or periodic reports with the United States Securities and Exchange Commission.

Committees of The Board Of Directors

As of the date of this Annual Report, we have not established an audit committee, compensation committee or a nominating committee. However, we intend to establish such committees and adopt and authorize certain corporate governance policies and documentation as reasonably possible with the addition of new members to our Board of Directors.

 

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Item 12. Executive Compensation

 

SUMMARY COMPENSATION TABLE

Name and Principal Position		Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Robert L. Knapp		2012 2011		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-
Courtney Knapp		2012 2011		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-		-0- -0-

 

As of December 31, 2012 and 2011, there were no:

	·	Grants or other plan-based awards outstanding;
	·	Options outstanding or exercised; and
	·	No pension benefit plans

Directors’ Compensation

 

We have no formal plan for compensating our directors for their services in their capacity as directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director undertaking any special services on behalf of the Company other than services ordinarily required of a director. Since inception to the date hereof, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments.

 

Item 13.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of December 31, 2012, by (i) our directors; (ii) our named executive officers; and (iii) each person or entity known by us to beneficially own 5% or more of our outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.

 

 

 

 

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Item 13. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters - continued

 

Security Ownership of Certain Beneficial Owners

 

Name and Address of Beneficial Owner	Amount of Common Stock Shares	Percentage of Class
Ameritech International Corp. 23233 N Pima Rd Scottsdale, AZ  85255	1,870,000 shares	8.156%
Cavalier Products Courtney Knapp, President 4411 Umatilla Denver, CO  80211	6,576,667 shares	28.683%
Cinnabar Group Inc. Courtney Knapp, President 4411 Umatilla Denver, CO  80211	5,033,334 shares	21.952%
GR Hanby Co., Inc. Stephanie Knapp, President 8110 E. Williams Dr. Scottsdale, AZ  85255	766,850 shares	3.344%
Stephanie Knapp 8110 E. Williams Dr. Scottsdale, AZ  85255	600,000 shares	2.617%
Robert L. Knapp 3122 W. Clarendon Phoenix, AZ 85017	33,150 shares	0.144%
Oakpoint Distributors Nancy vonBargen, President 13500 Edmonthorpe Midlothian, VA  23113	1,300,500 shares	5.672%
Nancy vonBargen 13500 Edmonthorpe Midlothian, VA   23113	794,100 shares	3.464%
Total Common Stock Shares	16,974,601	74.032%

Notes to the table:

1)

Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as amended, beneficial ownership of a security consists of sole or shared voting power (including the power to vote or direct the voting) and/or sole or shared investment power (including the power to dispose or direct the disposition) with respect to a security whether through a contract, arrangement, understanding, relationship or otherwise. Unless otherwise indicated, each person indicated above has sole power to vote, or dispose or direct the disposition of all shares beneficially owned.

2)

This table is based upon information obtained from our stock records. We believe that each shareholder named in the above table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.  Robert Knapp President, CEO, Director and Courtney Knapp, Director are both promoters and control persons of the company within the meaning of the rules promulgated under the Securities Act 1933, as amended, by virtue of their respective share ownership, their ability to influence the activities of the company and their respective positions of Director/President/CEO and Director of the company.  Robert Knapp and Courtney Knapp are brother and sister.

 

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Item 13. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters - continued

 

3)	Robert Knapp, President/CEO, Director owns 33,150 shares of common stock.  Mr. Knapp has no influence or control over his siblings’ financial affairs or business interests.

4)

Courtney Knapp, Director, owns no shares of common stock and no shares of Series A Preferred Stock.  Ms. Knapp owns a controlling interest in two non-public companies, Cavalier Products and Cinnabar Group, that both own shares in AmerElite Solutions.  Cavalier Products owns 6,576,667 shares of common stock of the Company.  Cinnabar Group owns 5,033,334 shares of common stock of the company.  Ms. Knapp has no influence or control over her siblings’ financial affairs or business interests.

5)

G.R. Hanby Co, Inc. owns 766,850 shares of common stock.  Ms. Stephanie Knapp owns a controlling interest in G.R. Hanby.  Stephanie Knapp owns no shares of common stock and no shares of Series A Preferred Stock.  Ms. Knapp has two minor children, Nicholas Knapp-Gutierrez and Skylar Knapp-Gutierrez.  Each child owns 300,000 shares of common stock of the company for which Ms. Knapp has custodial control.  Ms. Knapp is the sister of both Robert Knapp and Courtney Knapp.  Ms. Stephanie Knapp has no influence or control over her siblings’ financial affairs or business interests.

6)

Nancy vonBargen owns 794,100 shares of common stock.  Ms. vonBargen owns a controlling interest in a non-public company, Oakpoint Distributors.  Oakpoint Distributors owns 1,300,500 shares of common stock of the company.  Ms. vonBargen is an aunt to Robert Knapp, Courtney Knapp, and Stephanie Knapp.  Ms. vonBargen has no influence or control over her nephew or nieces’ financial affairs or business interests.

7)

Ameritech International owns 1,870,000 shares of common stock.  Ameritech is a non-public company controlled by James L. Knapp.  Mr. Knapp is the father of Robert Knapp, Courtney Knapp, and Stephanie Knapp.  Mr. Knapp has no influence or control over his children’s and other family members’ financial affairs or business interests.

Item 14. Certain Relationships and Related Transactions, and Director Interdependence

The Company has not entered into any transaction nor are there any proposed transactions in which any director, executive officer, shareholder of AmerElite Solutions or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.

 

In July 2012 the Directors authorized the Company and in September 2012 the Company converted $230,000 in accounts payable due to the Officers and Directors into two  convertible notes payable, with the holder having the right for twelve months to convert the notes into common stock at $.005, or 46,000,000 total common shares, which was considered to be the Company’s current fair market value.  The Company recognized no beneficial conversion feature expense on the notes.  Subsequently, the notes were acquired by an unaffiliated third party and consolidated into one note.  As of 12/31/12 the holder has not exercised the conversion of the note.

 

On December 17, 2012 the Directors authorized the Company to cancel 1,250,000 shares of Class A Preferred Stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company. The Company has no Class A Preferred Stock issued or outstanding as of December 31, 2012.

 

On December 17, 2012 the Directors authorized the Company to cancel 4,433,550 shares of the Company’s common stock with the accession of the related party shareholders, to reduce outstanding capitalization at no cost to the Company.

 

 

 

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Item 15. Principal Accounting Fees and Services

 

Audit Fees

 

The following table presents the fees for professional audit services rendered by Ronald R. Chadwick, P.C., CPA (“RC”) for the audit of the Company’s annual financial statements for the years ended December 31, 2012 and December 31, 2011 and fees billed for other services rendered by RC during those periods. All services reflected in the following fee table for 2012 and 2011 were pre - approved, respectively, in accordance with the policy of the Board of Directors.

 

		December 31, 2012				December 31, 2011
Audit fees (1) - RC		$	10,000			$	8,140
Audit-related fees - RC			-				-
Tax fees - RC			-				-
All other fees - RC			-				-
TOTAL FEES		$	10,000			$	8,140

 

NOTES:

 

(1) Audit fees consist of audit and review services, consents and review of documents filed with the SEC.

 In its capacity the Board of Directors pre-approves all audits (including audit-related) and permitted non-audit services to be performed by the independent auditors. The Board of Directors annually approves the scope and fee estimates for the year-end audit to be performed by the Company’s independent auditors for the fiscal year. With respect to other permitted services, the Board of Directors pre-approves specific engagements, projects and categories of services on a fiscal year basis, subject to individual project and annual maximums. To date, the Company has not engaged its auditors to perform any non-audit related services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PART IV

 

Item 16. Exhibits and Financial Statement Schedules

The following documents are filed as part of this Report:

2.	Exhibits.  The Exhibits on the accompanying Index to Exhibits are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.

 

Exhibit No.	Description
31	Certification of Chief Executive Officer and Chief Financial Officer
32	Certification of Chief Executive Officer and Chief Financial Officer

SIGNATURES

Pursuant to the requirements of Section 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.

AMERELITE SOLUTIONS, INC

 

Date:  March 30, 2013	By:	/s/ Robert L Knapp
		Robert L Knapp
		President, Principal Executive Officer and Principal Financial Officer

 

In accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated.

 

Date:  March 30, 2013	By:	/ s/ Robert L Knapp
		Robert L Knapp
		President, Principal Executive Officer and Principal Financial Officer

 

 

 

 

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