LINGERIE FIGHTING CHAMPIONSHIPS, INC. - Quarter Report: 2009 August (Form 10-Q)

form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended AUGUST 31, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 333-148005

XODTEC GROUP USA, INC.

(Exact Name of Registrant as specified in its charter)

Nevada		20-8009362
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

112 North Curry Street, Carson City, Nevada		89199
(Address of Principal Executive Offices)		(Zip Code)

Issuer’s Telephone Number, Including Area Code: (775) 321-1013

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No x

Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

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

Yes x No o

The numbers of shares outstanding of each of the issuer's classes of common equity, as of October 20, 2009, are as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.00 par value		21,230,004

XODTEC GROUP USA, INC.

FOR THE QUARTER ENDED AUGUST 31, 2009

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INDEX	Page

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS	2-12

Consolidated Balance Sheet at August 31, 2009 (unaudited) and February 28, 2009	2

Consolidated Statements of Operations for the three months ended August 31, 2009 and six months ended AUGUST 31, 2009 (unaudited)	3-4

Consolidated Statement of Stockholders’ Equity (unaudited)	5

Consolidated Statements of Cash Flows for six months ended August 31, 2009 and 2008 (unaudited)	6

Notes to Consolidated Financial Statements (unaudited)	7-12

ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12-13

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13

ITEM 4 - CONTROLS AND PROCEDURES	14-15

PART I I- OTHER INFORMATION	16-21

ITEM 1 - LEGAL PROCEEDINGS	16

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	16

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES	16

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	16

ITEM 5 - OTHER INFORMATION	16

ITEM 6 – EXHIBITS	16-21

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XODTEC GROUP USA, INC.

(A Development Stage Enterprise)

Consolidated BALANCE SHEETS

(Unaudited)

	AUGUST 31, 2009			February 28, 2009

ASSETS

CURRENT ASSETS
Cash and Cash equivalents	$	119,996		$	107,340
Notes receivable, net		0			1,014
Accounts receivable, net		1,774,541			510,702
Other receivables		29,958			0
Other receivables-related parties, net		1,151,276			1,084,717
Inventories		124,209			245,734
Prepayments		34,804			145,705
Other current assets		179,288			45,670
Total current assets		3,414,072			2,140,882
FIXED ASSETS
Cost		151,864			143,414
Less : accumulated depreciation		( 90,323	)		(73,440	)
Total fixed assets		61,541			69,974
OTHER ASSETS
Refundable deposits		64,326			60,608
Deferred Charge		45,160			27,282
Total other assets		109,486			87,890

Total assets	$	3,585,099		$	2,298,746

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Short-term debt	$	61,930		$	23,029
Notes payable		135,508			239,870
Other notes payable		143,744			0
Accounts payable		148,941			144,580
Accrued liabilities		413,620			100,880
Income tax payable		329,524			174,509
Due to related party		17,633			655,586
Other current liabilities		6,798			11,013
Total current liabilities		1,257,698			1,349,467

STOCKHOLDERS’ EQUITY
Capital stock
Authorized common stock (225,000,000 authorized shares; 18,050,000 outstanding shares)		2,318,364			2,318,364
Retained earnings (Deficit accumulated)		375,729			(939,351	)
Cumulative translation adjustments		(366,692	)		(429,734	)
Total stockholders’ equity		2,327,401			949,279

Total liabilities and stockholders’ equity	$	3,585,099		$	2,298,746

The accompanying notes are an integral part of these financial statements

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XODTEC GROUP USA, INC.

(A Development Stage Enterprise)

Consolidated STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended August 31,
	2009			2008

REVENUES	$	3,006,055		$	587,172

COST OF GOODS SOLD		(1,757,528	)		(233,603	)

GROSS PROFIT		1,248,527			353,569

OPERATING EXPENSES		(490,106	)		(194,403	)
RESEARCH AND DEVELOPMENT EXPENSES		0			(638	)

OPERATING INCOME		758,421			158,528

NON-OPRATING INCOME AND GAINS		74			63

NON-OPRATING EXPENSES AND LOSSES		(1,330	)		(1,572	)

INCOME BEFORE TAX		757,165			157,019
INCOME TAX		0			0

NET INCOME FOR THE PERIOD	$	757,165		$	157,019

BASIC LOSS PER COMMON SHARE	$	0.05		$	0.02

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		15,715,760			9,422,440

The accompanying notes are an integral part of these financial statements

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XODTEC GROUP USA, INC.

(A Development Stage Enterprise)

Consolidated STATEMENTS OF OPERATIONS

(Unaudited)

	Six months ended August 31,
	2009			2008

REVENUES	$	4,174,586		$	767,504

COST OF GOODS SOLD		(1,938,367	)		(374,665	)

GROSS PROFIT		2,236,219			392,839

OPERATING EXPENSES		(766,663	)		(384,142	)
RESEARCH AND DEVELOPMENT EXPENSES		(194	)		(642	)

OPERATING INCOME		1,469,362			8,055

NON-OPRATING INCOME AND GAINS		98			1,686

NON-OPRATING EXPENSES AND LOSSES		(10,228	)		(3,572	)

INCOME BEFORT TAX		1,459,232			6,169
INCOME TAX		(144,152	)		0

NET INCOME FOR THE PERIOD	$	1,315,080		$	6,169

BASIC LOSS PER COMMON SHARE	$	0.07		$	0.00

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		18,050,000			9,422,440

The accompanying notes are an integral part of these financial statements

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XODTEC GROUP USA, INC.

(A Development Stage Enterprise)

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE PERIOD ENDED AUGUST 31, 2009

(Unaudited)

	Common Stock				Additional Paid in Capital		Deficit Accumulated			Cumulative Translation Adjustments			Total
	Number of shares		Amount

Balance, March 1, 2009		9,460,000	$	2,318,364		-	$	( 939,351	)	$	(429,734	)	$	949,279

Change in translation adjustments				-		-		-			63,042			63,042

Net income , August 31, 2009				-		-		1, 315,080			-			1,315,080

Balance August 31, 2009		9,460,000	$	2,318,364	$	-	$	375,729		$	(366,692	)	$	2,327,401

The accompanying notes are an integral part of these financial statements

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XODTEC GROUP USA, INC.

(A Development Stage Enterprise)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended August 31,
	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,315,080		$	6,169
Adjustment to reconcile net income to net cash provided by operating activities
Depreciation		12,331			11,465
Various amortization		8,670			3,038
Decrease (increase) in notes receivable		1,014			(106	)
Increase in accounts receivable		(1,263,839	)		(206,984	)
Decrease (increase) in inventories		121,525			(8,969	)
Decrease in prepayments		110,901			30,276
Increase in other current assets		(133,618	)		(3,274	)
Decrease in other assets		0			3,856
Decrease in notes payable		(104,362	)		(9,860	)
Increase in accounts payable		4,361			20,079
Increase in accrued liability		312,740			27,198
(Decrease) increase in other current liabilities		(4,215	)		245,476
Increase (decrease) in income tax payable		155,015			(225	)


NET CASH PROVIDED BY OPERATING ACTIVITIES		535,603			118,139

CASH FLOWS FROM INVESTING ACTIVITIES					-
Acquisition of fixed assets		(890	)		(391	)
Disposal of fixed assets		1,239			0
Increase in deferred charges		(24,905	)		(10,171	)
(Increase) decrease in refundable deposit		(3,718	)		1,655
(Increase) decrease in other receivable		(96,517	)		30,334
Increase in other notes payable		143,744			0


NET CASH PROVIDED BY OPERATING ACTIVITIES		18,953			21,427

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (repayment ) in short-term debt		38,901			(51,876	)
Repayment of shareholder loan		(637,953	)		(63,973	)


NET CASH USED IN FINANCING ACTIVITIES		(599,052	)		(115,849	)
EFFECT OF EXCHANGE RATE CHANGES		57,152			1,639

NET INCREASE IN CASH		12,656			25,356

CASH, BEGINNING OF PERIOD		107,340			22,412

CASH, END OF PERIOD	$	119,996		$	47,768

Supplemental cash flow information and noncash financing activities:
Cash paid for:
Interest	$	1,085		$	3,555

The accompanying notes are an integral part of these financial statements

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NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Xodtec Group USA, Inc. (“Company”) is in the initial development stage and has incurred losses since inception totaling $13,198. The Company was incorporated on November 29, 2006 in the State of Nevada and established a fiscal year end of February. The Company is a development stage enterprise organized to enter into the special event and concert production industry.

As described in Note 9 to the financial statements, the Company had share exchange transaction with Aplus International, Ltd. and this transaction represents a change in control.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements present the balance sheet, statements of operations, stockholders' deficit and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.

Revenue Recognition, Receivables and Allowance for Doubtful Accounts

Operating revenues are recognized when titles to products and the risks of ownership are transferred to customers, primarily upon shipment. Because the earnings process has been completed and the economic benefits associated with the transaction have been realized or are realizable.

Operating revenues are measured at fair value of the transaction price negotiated between the Corporation and its buyers (taking into account commercial and quantity discounts). Receivables from operating activities are not discounted at the imputed interest rate since operating receivables are collectible within one year, fair value approximates the value of receivables on maturity and sales transactions are frequent.

Allowance for doubtful accounts is provided on the basis of a review of the collectibility of receivables. This review includes aging analysis and a review of customers’ creditworthiness and the economic environment.

Inventories

Inventories are stated at the lower of monthly-weighted-average cost or market value (net realizable value).

Inventories are recorded at standard cost and adjusted to approximate weighted-average cost on the balance

sheet date.

Estimated losses on scrap and slow moving items are recognized as an allowance for inventory obsolescence.

Fixed assets

Fixed assets are stated at cost. The major improvement, renewal and addition, which can prolong the service life of fixed assets, are counted as capital expenditures and recorded as fixed assets. Expenditures on regular repairs and maintenance are recorded as expenses.

Fixed assets are depreciated according to the service life and using the average method, with one-year residual value. Renewal and addition are depreciated according to the fixed assets the fixed assets’ service life. Major improvement is depreciated based on the remaining service lives of fixed assets. While assets are continually in use after the expiration of its service life, the residual values and service lives are estimated and depreciated accordingly and continually. The gain (loss) on disposal of assets is recognized as non-operating revenue (expenditure) in the period of sale or disposal.

Use of Estimates and Assumptions

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

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Income Taxes

The Company follows the liability method of accounting for income taxes in accordance with Statements of Financial Accounting Standards (“SFAS”) No.109, “Accounting for Income Taxes” and clarified by FIN 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.” Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.

Net Loss per Share

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.

Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the periods presented. Related translation adjustments are reported as a separate component of stockholder’s equity (deficit), whereas gains or losses resulting from foreign currency transactions are included in results of operations

Share Based Expenses

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share Based Payment.” This statement is a revision to SFAS 123 and supersedes Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends FASB Statement No. 95, “Statement of Cash Flows.” This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted SFAS No. 123R upon creation of the company and expenses share based costs in the period incurred.

NOTE 3 - GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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NOTE 4. - RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 160

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements.” SFAS 160 amends Accounting Research Bulletin 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 also changes the way the consolidated income statement is presented by requiring consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent owners and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for fiscal periods, and interim periods within those fiscal years, beginning on or after December 15, 2008. We do not expect that the adoption of SFAS 160 will have a material impact on our financial condition or results of operation

SFAS No. 161

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” (“SFAS No. 161”). SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133, “Derivative Instruments and Hedging Activities,” (“SFAS No. 133”). SFAS No. 161 requires enhanced disclosure about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for us as of January 1, 2009. We do not expect that the adoption of SFAS 161 will have a material impact on our financial condition or results of operation.

SFAS No. 163

In March 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60.” SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company does not expect the adoption of SFAS 163 will have a material impact on its financial condition or results of operation.

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with the requirements of SFAS No. 107and SFAS No. 157, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.

NOTE 6 – CAPITAL STOCK

The Company’s capitalization consists of 235,000,000 shares of capital stock with a par value of $0.001 per share, of which 225,000,000 shares are common stock and 10,000,000 shares are preferred stock.

On December 11, 2006, the sole Director purchased 9,000,000 shares of the common stock in the Company at $0.001 per share for $9,000.

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During March, April and August 2008 the Company sold 460,000 shares of the common stock to investors at a price of $0.02 per share in a private placement, for a total of $9,200.

As of April 20, 2009, the Company has not granted any stock options and has not recorded any stock-based compensation.

As described in Note 9 to the financial statements, the Company had share exchange transaction with Aplus International, Ltd. and as the result of such shares exchange, outstanding amount to 18,050,000 shares as August 31, 2009.

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company neither owns nor leases any real or personal property. An officer or resident agent of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.

As of August 31, 2009 and February 29, 2008, the Company received advances from a Director in the amount of $17,633 and $655,586, respectively. Also, as of August 31, 2009 and February 29, 2008, the Company loan to the shareholders amounted to $1,151,276 and 1,084,717, respectively. The amounts due to and due from the related party are unsecured and non-interest bearing with no set terms of repayment.

NOTE 8 – INCOME TAXES

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Per Statement of Accounting Standard No. 109 – Accounting for Income Tax and FASB Interpretation No. 48 - Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No.109, when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the twelve-months ended April 20, 2009, or during the prior three years applicable under FIN 48.

As a result of the adoption of FIN 48, we did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the consolidated balance sheet.

The components of the Company’s deferred tax asset as of August 31, 2009 and February 29, 2008 are as follows:

	Aug. 31, 2009		Feb. 29, 2008
Allowance for loss on inventory	$	1,474	$	1,737
Valuation allowance		0		0
Net deferred tax asset	$	1,474	$	1,737

A reconciliation of income taxes computed at the statutory rate to the income tax amount recorded is as follows:

	Aug. 31, 2009		Feb. 29, 2008		Since Inception
Tax at statutory rate (25%)	$	1,474	$	1,737	$	1,474
Increase in valuation allowance		0		0		0
Net deferred tax asset	$	1,474	$	1,737	$	1,474

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NOTE 9. – ACQUISITION OF APLUS INTERNATIONAL, LTD.

On April 20, 2009, the Company acquired APlus International, Ltd. a privately owned Nevada limited liability company (“APlus”), pursuant to an Agreement and Plan of Share Exchange (the “Exchange”). APlus is a holding company whose principal operating companies design, manufacture, market and sell advanced lighting solutions, including light emitting diode (LED) lighting and other energy-saving lighting in Taiwan. Upon consummation of the Exchange, the Company adopted the business plan of APlus.

Pursuant to the terms of the Exchange, the Company acquired APlus in exchange for an aggregate of 5,333,334 newly issued shares (the “Exchange Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). As a result of the Exchange, APlus International, Ltd. became a wholly-owned subsidiary of Xodtec Group USA, Inc. Xodtec Group USA, Inc. shares were issued to the APlus International, Ltd. In addition, the Company’s principal stockholder, Adam Borges Dos Santos agreed to retire his 9,000,000 shares of Common Stock. Following the issuance of the Exchange Shares and the retirement of Mr. Dos Santos’ shares, the former members of APlus now beneficially own approximately 92% of the outstanding shares of our Common Stock. Accordingly, the Exchange represented a change in control.

The Company also issued 116,667 shares of Common Stock and warrants to purchase additional 83,334 shares of common stock at an exercise price of $1.00 per share and expiring in 2 years, for services rendered by Dragonfly Capital Partners, LLC (“Dragonfly”) in connection with the Exchange.

Also on April 20, 2009, following the Exchange, the Board of Directors of the Company approved an amendment to the Company’s Articles of Incorporation increasing the number of authorized shares of common stock from 75,000,000 to 225,000,000 and concurrently effectuating a three for one (3:1) forward-split of the Company’s issued and outstanding shares of Common Stock. Further, on April 22, 2009 a majority of shareholders of Xodtec Group USA, Inc. approved an amendment to the Company’s articles of incorporation to change the name of the Company to Xodtec Group USA, Inc. and the creation of 10,000,000 shares of blank check preferred stock.

At the effective time of the Exchange, our board of directors was reconstituted by the resignation of Mr. Adam Borges Dos Santos from his role as sole principal officer and director, and the appointment of Yao-Ting (Curtis) Su, Chao-Wu (Mike) Chou and Hui-Yu (Rachel) Che as directors. Our executive management team also was reconstituted following the resignation of Mr. Dos Santos as APlus’ president, and new officers were appointed in place of our former officers. See “Directors and Executive Officers, Promoters and Control Persons.”

On April 22, 2009 the Company entered into a Financial Advisory Agreement with Unise Investment Corp. to provide financial consulting services in consideration for 116,667 shares of Common Stock. Further, on April 23, 2009, the Company sold warrants exercisable into 200,000 post-split shares of Common Stock at the exercise price of $0.65 per share and expiring in 6 months, warrants exercisable into 500,000 shares of Common Stock at the exercise price of $1.00 per share and expiring in 2 years and warrants exercisable into post-split 800,000 shares of

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Common Stock at the exercise price of $1.50 per share and expiring in 2 years. Additionally, the Company agreed to register the shares of Common Stock underlying these warrants and the warrants issued to Dragonfly, as well as the shares of Common Stock issued to Dragonfly.

NOTE 10. –SHOR-TERM DEBTS

Short-term debts were loans from banks both with 5% to 6% and 6.19% interest in Aug. 31, 2009 and Feb. 29, 2008, respectively.

NOTE 11. –SIGNIFIVANT COMMITIMENTS AND CONTINGENCIES

The company’s offices and transportation equipments are under operating lease, and leasing period is from Dec. 31, 2009 to Aug. 31, 2012. The company minimum rent for the future is as follows:

Period of payment		Amounts
Sep. 1, 2009 to Aug. 31, 2010		184,295
Sep. 1, 2010 to Aug. 31, 2011		134,142
Sep. 1, 2011 to Aug. 31, 2012		60,330

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is including the following cautionary statement in this Quarterly Report on Form 10-Q to make applicable and utilize the safe harbor provision of the Private Securities Litigation Reform Act of 1995 regarding any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, examination of historical operating trends, data contained in records and other data available from third parties, but there can be no assurance that the Company’s expectations, beliefs or projections will result, or be achieved, or be accomplished.

The company designs, manufactures, markets and sells advanced LED lighting products and solutions. The company’s product line-up covers a broad range of technically innovative outdoor lighting, indoor general and accent lighting, and color-changing lighting lamps and fixtures that are used for applications in commercial, architectural, residential, hospitality, entertainment and consumer markets.

The company generates revenue from selling her lighting products and solutions into commercial, architectural, residential, and other markets. Commercial sales include the lighting solution design and applications of advanced LED lamps, fixtures, and associated control systems. Architectural sales mainly focus on the installation of wall wash lighting, light strips, and display panel. Residential sales are addressed on the replacement market which currently installed with traditional energy-consuming lighting products such as incandescent lamps, compact fluorescent lamps, and fluorescent tubes.

Revenue

Revenue is derived from sales of our advanced lighting products and solutions. These products consist of solid-state LED lighting lamps, fixtures, and control systems. Besides the LED lighting related businesses, some of our revenue comes from our professional project management service such as energy-saving system design, landscape lighting design, and language globalization services..

Cost of Goods Sold

The company’s cost of goods sold consists primarily of labor-related overhead, such as R&D professionals, designers, and administrative personnel. We project management services based on customer orders. Besides our in-house resources, we also out-source part of projects to support such demand.

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Gross Profit

Our gross profit has been and will continue to be affected by a variety of factors, including changing of the foreign exchange rates for exporting, out-sourcing cost to support project demands, and average sales prices of our products, including fluctuations in the cost of our purchased components, sales price and the product life cycle.

Operating Expenses

Operating expenses consist primarily of salaries and associated costs for employees in finance, human resources, sales, information technology and administrative activities. In addition, operating expenses include charges relating to accounting, legal, insurance and stock-based compensation under Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment.”

Difference in sales and gross profit between 2009 Q1 and 2008 Q1 was due to the group acquiring the patent for it self-invented wafers and the improvement of related technology. The Company started to get the sales order of lighting and design service from the latter half of FY 2008 and service revenue increased for USD 853,000 in 2009 Q1 comparing with that in 2008 Q1. The Company introduced new products and new sales channel and thus sales revenue in 2009 Q1 increased for about US 150,000 comparing with that in 2008Q1. Since the cost of service revenue primarily consists of staff costs and such costs didn’t rise in proportion to the percentage of service revenue increase, gross profit and gross profit ratio obviously increased.

Difference in operating expense between 2009 Q1 and 2008 Q1 was because that the Company had higher operating expense due to higher sales revenue. The other reason for the increase of USD $76,125 operating expense was due to the Companying moving its office to a larger office in early 2009. On the other hand, the Company didn’t initiate the new R&D project and hence R&D cost in 2009Q1 decreased for US $745 comparing with that in 2008 Q1.

Difference in non-operating income and gain was due to the Company subleased its idle office space in 2008 Q1 but it didn’t have such sublease in 2009Q1. Thus, it resulted in the decrease of non-operating income and gain for USD 1,600 .

Difference in non-operating expense and loss was because the Company paid off the entire bank loan and resulted in the decrease of USD $1,560 interest expense

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of its operations in Taiwan, the Company is exposed to various market risks, including changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. The Company does not anticipate that these risks will adversely affect the Company’s operations. Accordingly, the Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company also has not entered into financial instruments to manage and reduce the impact of changes in interest rates and foreign currency exchange rates, although we may enter into such transactions in the future.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer and effected by the Company’s board of directors, management and other principal officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

- pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

- provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with the accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with the authorizations of management and directors of the Company; and

- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting AUGUST not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of August 31, 2009 management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

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The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements as of November 30, 2008.

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an affect on the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, results in ineffective oversight in the establishment and monitoring of required internal controls and procedures which could result in material misstatement in our financial statements for the future periods.

In an effort to remediate the indentified material weaknesses and other deficiencies and enhance our internal controls we have initiated, or plan to initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made my management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

There was no change in our internal controls over financial reporting that occurred during the quarter ended August 31, 2009 that have materially affected or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

None

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

During the three months ended AUGUST 31, 2009, the Company issued the following securities:

On April 20, 2009, the Company acquired APlus International, Ltd., a privately owned Nevada limited liability company (“APlus”), pursuant to an Agreement and Plan of Share Exchange for an aggregate of 5,333,334 newly issued, pre-split shares of the Company’s Common Stock.

On April 22, 2009 the Registrant entered into a Financial Advisory Agreement with Unise Investment Corp. to provide financial consulting services in consideration for 111,667 shares of Common Stock.

On April 23, 2009, the Registrant sold warrants exercisable into 200,000 shares of Common Stock at the exercise price of $0.65 per share and expiring in 6 months, warrants exercisable into 500,000 shares of Common Stock at the exercise price of $1.00 per share and expiring in 2 years and warrants exercisable into 800,000 shares of Common Stock at the exercise price of $1.50 per share and expiring in 2 years.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

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

On April 22, 2009, a majority of our holders of common stock, par value $0.001 per share (the “Common Stock”) voted in favor of amending the Company’s Articles of Incorporation to change the name of the Company to “Xodtec Group USA, Inc.” and to increase the Company’s authorized capital stock to 235,000,000, shares of which 225,000,000 shares will be Common Stock, $0.001 par value, and 10,000,000 shares will be Preferred Stock, $0.001 par value.

ITEM 5 – OTHER INFORMATION

None.

ITEM 6 – EXHIBITS

a) Exhibit index

Exhibit Description of the Exhibit

31.1 Chairman of the Board Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Chief Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Chairman of the Board Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		XODTEC GROUP USA, INC.


Date: October 20, 2009		/s/ Yao-Ting Su
		Yao-Ting Su
		President, Chairman of the Board
		(principal executive officer)


Date: October 20, 2009		/s/ Hui-Yu Che
		Hui-Yu Che
		Chief Financial Officer
		(principal accounting officer)