GreenBox POS - FORM 10-Q - August 23, 2010

Attached files

file	filename
EX-32.1 - GreenBox POS	ex32-1.htm
EX-31.1 - GreenBox POS	ex31-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)
x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2010

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
	For the transition period from ______________ to ______________

Commission file number: 001-51554

ASAP EXPO, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	22-3962936
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

345 South Figueroa Street, Suite M09 Los Angeles, CA	90071
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number: (213) 625-1200

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 o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Number of shares outstanding of the issuer's classes of common equity, as of June 30, 2010: 8,704,669 Shares of Common Stock (One Class)

Transitional Small Business Disclosure Format: Yes o No x

TABLE OF CONTENTS

		Page
PART I Financial Information

Item 1.	Condensed Financial Statements	3
	Condensed Balance Sheet as of June 30, 2010 (unaudited) and December 31, 2009	3
	Condensed Statements of Operations for the Six Months Ended June 30, 2010 and June 30, 2009 (unaudited)	4
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2010 and June 30, 2009 (unaudited)	5
	Notes to Condensed Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis or Plan of Operation	12
Item 3.	Controls and Procedures	16

PART II Other Information

Item 1.	Legal Proceedings	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Signatures		19

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ASAP EXPO, INC.
BALANCE SHEETS

	June 30,			December 31,
	2010			2009
	(Unaudited)

ASSETS
Current Assets
Cash	$	17,249			5,785
Prepaid expenses and other receivables		305			6,035
Prepaid income taxes		4,537			4,537
Due from affiliated company		51,038			-
Total Current Assets		73,129			16,357

Property and equipment, net		44,028			50,471
Security deposit		2,200			2,200
Long-term Investment		203,912			203,912

Total Assets	$	323,269		$	272,940

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	112,567			46,065
Deferred Revenue		500,000			500,000
Capitalized Lease, current		14,171			13,823
Due to affiliated company		-			100,000
Total Current Liabilities		626,738			659,888

Long-term Liabilities
Capitalized Lease, noncurrent		29,217			36,391
Line of credit, officers		1,363,931			991,560
Total Long-term Liabilities		1,393,148			1,027,951

Commitments and contingencies

Stockholders' Deficit
Common stock, $.001 par value, 45,000,000 shares authorized,
8,704,669 shares issued and outstanding at June 30, 2010 and December 31, 2009		8,705			8,705
Capital deficiency		(1,126,292	)		(1,126,292	)
Accumulated deficit		(579,030	)		(297,312	)
Total Stockholders' Deficit		(1,696,617	)		(1,414,899	)

Total Liabilities and Stockholders' Deficit	$	323,269		$	272,940

The accompanying notes are an integral part of financial statements.

ASAP EXPO, INC.
STATEMENTS OF OPERATIONS
UNAUDITED

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009

Revenues:
Tradeshow revenue	$	-		$	30,614		$	-		$	63,619
Consulting fee		-			-			-			76,489
Management Fee		21,000			-			42,000			-
Total revenues		21,000			30,614			42,000			140,108

Operating expenses:
General and administrative		37,151			50,160			77,769			180,104
Payroll and related benefits		93,379			52,235			187,864			103,796
Total operating expenses		130,530			102,395			265,633			283,900

(Loss) from operations		(109,530	)		(71,781	)		(223,633	)		(143,792	)

Other Income (Expense)
Other income		-			100			-			100
Interest expense		(28,316	)		(31,637	)		(57,284	)		(52,627	)
Total other (Expense)		(28,316	)		(31,537	)		(57,284	)		(52,527	)

(Loss) before income taxes		(137,846	)		(103,318	)		(280,917	)		(196,319	)
Income taxes		-			(9,602	)		800			1,698

Net (loss)		(137,846	)		(93,716	)	$	(281,717	)		(198,017	)

Net (loss) per common share
Basic and diluted	$	(0.02	)	$	(0.01	)	$	(0.03	)	$	(0.02	)

Weighted average common shares outstanding
Basic and diluted		8,704,669			8,704,669			8,704,669			8,704,669

The accompanying notes are an integral part of financial statements.

ASAP EXPO, INC.
STATEMENTS OF CASH FLOWS
UNAUDITED

	Six Months Ended June 30,
	2010			2009
Cash flows from operating activities:
Net loss	$	(281,717	)	$	(198,017	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense		6,443			7,517
Accounts receivable
Prepaid expenses and other receivables		5,730			121,382
Security deposit		-			(2,200	)
Prepaid income taxes		-			(3,570	)
Accounts payable and accrued expenses		66,502			(1,386	)
Deferred revenues		-			28,873

Net cash used in operating activities		(203,042	)		(47,401	)

Cash flows from investing activities:
Advance to affiliated companies		-			(155,499	)

Net cash provided by (Used in) investing activities		-			(155,499	)

Cash flows from financing activities:
Payments on capital lease		(6,825	)		(5,400	)
Advance to affiliated company		(151,038	)		-
Proceeds from borrowings on line-of-credit from officers		428,685			905,000
Repayments of borrowings on line-of-credit from officers		(56,316	)		(678,994	)

Net cash provided by financing activities		214,506			220,606

Net (decrease) increase in cash		11,464			17,706

Cash, beginning of period		5,785			12,312

Cash, end of period	$	17,249		$	30,018

Supplemental disclosures of cash flow information:
Cash paid during the period
Interest	$	(36	)	$	63,096
Income taxes	$	800		$	5,268

The accompanying notes are an integral part of financial statements.

ASAP EXPO, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

UNAUDITED

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

ASAP Expo, Inc. (“ASAP Expo” or the “Company” or “We” or “Our”) d.b.a. ASAP International Holdings Inc., was incorporated on April 10, 2007 under the laws of the State of Nevada.

Prior to December 31, 2008, ASAP Expo was a wholly owned subsidiary of China Yili Petroleum Company, a Nevada corporation (“China Yili”), formerly named ASAP Show, Inc (“ASAP”).

On December 31, 2008, China Yili declared a dividend of 100% of the outstanding shares of ASAP Expo to its shareholders. The dividend declaration caused ASAP Expo to spin-off from China Yili.

Prior to March 2009, the Apparel Sourcing Association Pavilion Trade Show ("ASAP Show") was the core business of ASAP Expo. ASAP Show is a global apparel and textile sourcing show that brings leading manufacturers from around the world to one venue to meet, greet and sell to buyers. The ASAP Show was held twice a year in Las Vegas, Nevada.

In March 2009, ASAP Expo transitioned its core business to providing investment banking, management consulting and global trading services for Chinese companies. The mission is to bridge the China and the Western world.

The Investment Banking Services division helps Chinese companies list on the public trading markets in the USA or Europe. Management Consultant division assists our own portfolio companies to meet Western management standards and enhance its value in the public market arena. Global Business Services division provides consulting to entities seeking business opportunities in the U.S, Europe, and China.

UNAUDITED INTERIM FINANCIAL INFORMATION

These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (the “GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with the GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2010.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2009, included in the Company’s 2009 Annual Report on Form 10-K.

GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

At June 30, 2010, the Company has a capital deficiency of approximately $1,126,292 resulted from the accumulated deficit of its parent company that was transferred to the Company upon spin-off, negative working capital of $553,609 and a lack of profitable operating history. The Company hopes to increase revenues from its financial advisory services business. In the absence of significant increases in revenues, the Company intends to fund operations through additional debt and equity financing arrangements. The successful outcome of future activities cannot be determined at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

The Company's success is dependent upon numerous items, certain of which are the successful growth of revenues from its services and its ability to obtain new customers in order to achieve levels of revenues adequate to support the Company's current and future cost structure, for which there is no assurance. Unanticipated problems, expenses, and delays are frequently encountered in establishing and maintaining profitable operations. These include, but are not limited to, competition, the need to develop customer support capabilities and market expertise, technical difficulties, market acceptance and sales and marketing. The failure of the Company to meet any of these conditions could have a materially adverse effect on the Company and may force the Company to reduce or curtail operations. No assurance can be given that the Company can achieve or maintain profitable operations.

The Company believes it will have adequate cash to sustain operations until it achieves sustained profitability. However, until the Company has a history of maintaining revenue levels sufficient to support its operations and repay its working capital deficit, the Company may require additional financing. Sources of financing could include capital infusions, additional equity financing or debt offerings. There can be no assurance that funding will be available on acceptable terms, if at all, or that such funds, if raised, would enable the Company to achieve or sustain profitable operations.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the classification of liabilities that might result from the outcome of these uncertainties.

USE OF ESTIMATES

The preparation of financial statements in conformity with the GAAP 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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 166, “Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140” (“SFAS No. 166”), expected to be included in the FASB Accounting Standards Codification (‘Codification’) as Accounting Standards Codification (‘ASC 860”), Transfers and Servicing. This topic improves the comparability of information that a reporting entity provides regarding transfers of financial assets and the effects on its financial statements. This topic is effective for interim and annual reporting periods ending after November 15, 2009. The Company does not expect the adoption of this topic to have a material effect on its financial statements and related disclosures.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS No. 167”), expected to be included in the Codification as ASC 810, Consolidation. This topic changes the consolidation guidance applicable to a variable interest entity. Among other things, it requires a qualitative analysis to be performed in determining whether an enterprise is the primary beneficiary of a variable interest entity. This topic is effective for interim and annual reporting periods ending after November 15, 2009. The Company does not expect the adoption of this topic to have a material effect on its financial statements and related disclosures.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), included in the Codification as ASC 810-10-65-1. This topic establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. This topic also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This topic is effective for fiscal years beginning October 1, 2009. The Company does not expect the impact of the adoption of SFAS 160 to be material.

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30,			December 31,
	2010			2009

Automobile	$	64,431		$	64,431
		64,431			64,431
Less: Accumulated depreciation		(20,403	)		(13,960	)
	$	44,028		$	50,471

NOTE 3 – LONG-TERM INVESTMENT

In September 2009, the Company made a long-term investment in ASAP Hotel, Inc. (“ASAP Hotel”) to purchase 19.84% of equity interest for $200,000. The equity method has been used for this investment for the six months ended June 30, 2010. The balance for the investment including earnings from the investment as of June 30, 2010 was $203,912.

ASAP Hotel had no activities for the six months ended June 30, 2010.

The following table provides the summary of balance sheet information for ASAP Hotel as of June 30, 2010:

ASAP HOTEL, INC.
	June 30, 2010		December 31, 2009
Total assets	$	5,469,243	$	5,419,715
Total liabilities		49,528		-
Net assets		5,419,715		5,419,715
ASAP Expo's 19.84% ownership		1,075,342		1,075,342
Ending balance of investment account		203,912		203,912
Difference		871,430		871,430

The difference of $871,430 was mainly due to the discount when ASAP Expo purchased the 19.84% of ownership in ASAP Hotel. ASAP Hotel’s net asset was $5,400,000 and ASAP Expo invested $200,000 (instead of $1,071,430) to purchase the 19.84% of ownership in ASAP Hotel.

NOTE 4 – DEFERRED REVENUE

Consulting fees received for providing advisory services are subject to refund until the client becomes publicly traded in the United States or Europe, thus are recorded as deferred revenue until the fees are no longer refundable.

At June 30, 2010, the deferred revenue was $500,000 for the advisory services provided to one of its affiliated companies.

NOTE 5 - CAPITAL LEASE

In 2008, the Company entered into a lease arrangement to acquire a vehicle. Future minimum payments and the obligations due under the capital lease are as follows:

For the Year Ended December 31:
2010		8,007
2011		16,015
2012		16,015
2013		6,673
Less amount representing interest at 5% per annum		(3,322	)
		43,388
Less Current Portion		(14,171	)
Long Term Portion	$	29,217

NOTE 6 – DUE TO/FROM AFFILIATED COMPANY

ASAP Hotel advanced the Company $100,000 for the purpose of acquiring used vehicles for ASAP Hotel and exporting them to China. ASAP Hotel’s China WOFE is allowed to import up to eight used vehicles into China. At June 30, 2010, no automobiles had been purchased for, or exported to, ASAP Hotel.

During the six months ended June 30, 2010, the Company advanced ASAP Hotel $149,528 as working capital to help ASAP Hotel’s business start-up.

NOTE 7 - LINE-OF-CREDIT FROM OFFICERS

The Company has an unsecured revolving line-of-credit (the "Line") from Frank Yuan, the Company's Chief Executive Officer, and certain of his family members which is due upon demand and provides for borrowings up to a maximum of $1,500,000, as amended. The Line carries an interest rate of 10.0% per annum. The balances as of June 30, 2010 and December 31, 2009 were $1,363,931 and $991,560, respectively; the accrued and unpaid interests were $112,567 and $46,065, respectively.

NOTE 8 - INCOME TAXES

In connection with the spin-off, the tax attributes associated with parent company was not retained by the Company. As of June 30, 2010, the Company had Federal net tax operating loss carry forwards of approximately $579,030 available to offset future taxable income. The carry forwards expire in varying amounts through 2030.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at June 30, 2010 and 2009 are presented below:

	Six Months Ended June 30,
	2010			2009

Deferred tax assets:
Net operating loss carryforwards	$	112,220		$	78,879
Total deferred tax assets		112,220			78,879
Less: valuation allowance		(112,220	)		(78,879	)
Net deferred tax assets	$	-		$	-

NOTE 9 - SHAREHOLDERS' DEFICIT

Options and Warrants

The Company does not have a stock option plan or any options or warrants issued and outstanding as of June 30, 2010.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Operating Lease

Starting June 15, 2010, the Company leases office space under a five-year lease term agreement with Shenzhen New World Group. The lease provides for monthly lease payments of $0. The Company subleases its office space to one of its affiliated companies for monthly lease payment of $2,000 and records it as management fee.

NOTE 11 - BUSINESS SEGMENTS

Reportable business segments as of and for the periods ended June 30, 2010 and 2009 are as follows:

	Six Months Ended June 30,
	2010		2009

Revenues:
Tradeshow revenue	$	-	$	63,619
Consulting fee		-		76,489
Management Fee		42,000		-
	$	42,000	$	140,108

Income (loss) from operations:
Trade shows	$	-	$	(43,296	)
Consulting fee		20,381		64,414
Corporate		245,252		(164,908	)
	$	265,633	$	(143,790	)

Identifiable assets:
Trade shows	$	-	$	98,024
Consulting		323,269		145,231
	$	323,269	$	243,255

The management fee as reflected above was charge to ASAP Hotel.

Tradeshow revenue relates to the Company's Las Vegas, Nevada show.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report for the period ended June 30, 2010. This quarterly report contains certain forward-looking statements and the Company's future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

OVERVIEW

ASAP Expo provides investment banking, management consulting and global trading services to Chinese companies. The mission is to bridge the China and the Western world.

The Investment Banking Services division helps Chinese companies list on the public trading markets in the USA or Europe. In 2008, ASAP Expo entered the Germany Frankfurt Exchange and established its presence in the Deutsche Boerse Open Market. The products we created are capable of proving our clients, especially small and median size companies, the opportunity to access international capital markets. Our mission is to provide our clients, including start ups and early stage developments with the services that will assist them in the “first step” in becoming a public company.

Management Consultant division assists our own portfolio companies to meet Western management standards and enhance its value in the public market arena.

Global Business Services division provides consulting to entities seeking business opportunities in the U.S, Europe, and China. Its Global Trade Services (GTS) provides the following services:

1) Resources for buyers.

2) Quality inspection and assurance.

3) Logistics, including ocean or air shipment, and door to door service.

4) Finance assistance including opening Letter of Credits (LC) for the buyer to purchase the merchandise.

5) LDP (Landed Duty Paid) quotations and payment terms for all the merchandise.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2010 and 2009

Revenue

The tradeshow revenue for the three and six months ended June 30, 2010 was $0 and $0 compared to $30,614 and $63,619 for the same periods last year, respectively. This decrease was due to the Company’s transitioning into providing investment banking, management consulting and global trading services.

Revenue from the consulting services for the three and six months ended June 30, 2010 was $0 and $0 compared to $0 and $76,489 for the same periods last year, respectively. The company anticipates revenue from consulting services in future periods because the Company has been allocating most of its resources and efforts to monetize its knowledge and relationship between West and East.

During the three and six months ended June 30, 2010, the Company provided office space and staff to help ASAP Hotel start up its business operations, accordingly, charged a management fee of $21,000 and $42,000, respectively. There was no management fee income for the three and six months ended June 30, 2009.

Operating Expenses

For the three and six months ended June 30, 2010, general and administrative expenses consist primarily of administrative personnel costs, facilities expenses, and travel expenses. For the three and six months ended June 30, 2009, general and administrative expenses consist primarily of ASAP Global Sourcing show production costs, attendee marketing programs, and exhibitors' promotion costs.

General and administrative expenses decreased by $13,009 or 25.9% to $37,151 for the three months ended June 30, 2010, as compared to $50,160 for the same period last year. For the six months ended June 30, 2010, general and administrative expenses decreased by $102,335 or 56.8% to $77,769 compared to $180,104 for the same period last year. The decrease in general and administrative expenses was primarily due to the elimination in ASAP Show production expenses as the Company exited this line of business. ASAP Show production expenses were $0 and $0 for the three and six months ended June 30, 2010 compared to $12,940 and $101,870 for the same periods last year, respectively.

Payroll and related benefits increased by approximately $41,144 or $78.8% to $93,379 for the three months ended June 30, 2010 from $52,235 for the same period last year. For the six months ended June 30, 2010, payroll and related benefits increased by $84,068 or 81.0% to $187,864 compared to $103,796 for the same period last year. The increase was primarily because in the three and six months ended June 30, 2009, a portion of executive and administrative staff pay was covered by one of the Company’s affiliates, IBMC, which used the Company’s executive and administrative staff for its operations.

Interest Expense

Interest expense decreased to $28,316 during the three months ended June 30, 2010 from $31,637 for the same period last year, and increased to $57,284 during the six months ended June 30, 2010 from $52,627 for the same period last year. This decrease in the three months ended June 30, 2010 was due to lower average balance of the line of credit from officers, the increase in the six months ended June 30, 2010 was due to higher average balance of the officer line of credit in the first quarter of 2010.

Income Taxes

Income taxes for the six months ended June 30, 2010 were $800 compared to $1,698 for the same period last year. The income taxes for the six months ended June 30, 2009 were the under-accrued income taxes on the year 2008 taxable income resulting from the consulting fee received in the last quarter of 2008. The income taxes for the three months ended June 30, 2009 were negative $9,602 due to the refund received on the overpaid 2008 income taxes.

Net Loss

The Company recorded a net loss of $137,846 and $281,717 for the three and six months ended June 30, 2010 as compared to a net loss of $93,716 and $198,017 for the same periods last year, respectively. The increases in the net losses were mainly due to the decrease in revenues, increase in payroll and related benefit which was partly offset by the reduction in trade show production expenses.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital deficit was $553,609 at June 30, 2010, as compared to $643,531 at December 31, 2009. During the six months ended June 30, 2010, the Company had average monthly general and administrative expenses of approximately $12,962, as compared to $14,000 (excluding ASAP Show production expenses) for the six months ended June 30, 2009. During the next twelve months, ASAP Expo will focus on its investment banking, management consulting and global trading services to generate additional revenue. With the net revenue from its services, and continuing support from its major shareholders to provide a revolving line-of-credit, management believes ASAP Expo will have enough net working capital to sustain its business for another 12 months.

The Company has a revolving line-of-credit (the "Yuan Line of Credit") from Frank Yuan, the Company's CEO and certain members of his family, which is due upon demand, and provides for borrowings up to a maximum total of $1,500,000, as amended. The Yuan Line of Credit carries an interest rate of 10.0% per annum. The total balance as of June 30, 2010 was $1,363,931, and the accrued and unpaid interest was $112,567.

The forecast of the period of time through which ASAP Expo’s financial resources will be adequate to support its operations is a forward-looking statement that involves risks and uncertainties. ASAP Expo’s actual funding requirements may differ materially as a result of a number of factors, including unknown expenses associated with the cost of providing investment banking, management consulting and global trading services.

ASAP Expo has no commitments to make capital expenditures for the fiscal year ending December 31, 2010.

Over the next two to five years, ASAP Expo plans to utilize a combination of internally generated funds from operations and potential debt and equity financing to fund its long-term growth.

The Report of the Company's Independent Registered Public Accounting Firm on our December 31, 2009 financial statements includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The financial statements do no include any adjustments that might result from the outcome of this uncertainty.

At the present time, we have received no commitments for the funds required for our planned capital investments. Obtaining those funds, if we can do so, will require that we issue substantial amounts of equity securities or incur significant debts. We believe that the expected return on those investments will justify the cost. However, our plan, if accomplished, will significantly increase the risks to our liquidity.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the our financial statements and the accompanying notes. The amounts of assets and liabilities reported on our balance sheet and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, stock based compensation and the valuation of deferred taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:

Revenue Recognition

Accounting Standards Codification (“ASC”) 605, "Revenue Recognition" outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with Securities and Exchange Commission. Management believes the Company's revenue recognition policies conform to ASC 605.

Revenues include amounts earned under trade show booth sales and consulting fee.

Trade Shows

Trade shows generate revenue through exhibitor booths sales, corporate sponsorship, and advertising. Such revenue is typically collected in advance, deferred and then recognized at the time of the related trade show.

Consulting Fees

The Company acted as a consultant for international brands to enter the China market. For this service, the Company charged international brands a consultant fee. The fee is based upon hours serviced and an upfront retainer fee. The Company also receives a portion of royalty revenue from the brand for sales above and beyond a pre-specified minimum guarantee. The Company recognizes its Consultant fees and Royalty revenue when they are received.

In addition, the Company provides advisory services for companies wanting to become publicly traded and raise capital in the United States or Europe. Consulting fees received for providing advisory services are subject to refund until the client becomes publicly traded in the United States or Europe, thus are recorded as deferred revenue until the fees are no longer refundable.

Income Taxes

The Company accounts for income taxes under ASC 740, "Income Taxes." Under ASC 740, 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Management provides a valuation allowance for significant deferred tax assets when it is more likely than not that such asset will not be recovered.

New Accounting Pronouncements

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. 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 ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures. Based upon that evaluation, the CEO and CFO concluded that as of June 30, 2010 our disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company required to be included in the Company's periodic filings with the SEC, subject to the various limitations on effectiveness set forth below under the heading, "LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS," such that the information relating to the Company, required to be disclosed in SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure." (b) Changes in internal control over financial reporting. There has been no change in the Company's internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS The Company's management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal 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 the 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 simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. 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, control may become inadequate because of changes in conditions, and/or the degree of compliance with the policies or procedures may deteriorate.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Even though there is no legal proceeding for ASAP Expo Inc. as of now, the relationship between ASAP Expo Inc. and ASAP Hotel Management Corp (“ASAP Hotel”) may be reviewed in the future because of the current legal proceedings between Mr. Frank Yuan, CEO of ASAP Expo and ASAP Hotel, vs. ASAP Hotel’s minority shareholder’s group because ASAP Expo owns 19.5% of ASAP Hotel.

ASAP Hotel’s minority shareholders group initiated a proxy fight for control of ASAP Hotel on January 28, 2010 in which Ms. Tiffany Yan Xu (“Xu”), then CFO of ASAP Hotel, had received proxy of 12,563,000 shares totaling 49.85 % of issued and outstanding shares. In State of Nevada, where ASAP Hotel is registered, shareholders can elect new board and officers through Shareholders’ consent without calling a special shareholders’ meeting. Xu notified the Company and Frank Yuan by surprise of the new board and officers (“Rump Board”), and was able to freeze the bank accounts of ASAP Hotel both in the U.S. and China.

ASAP Hotel was forced to file a Temporary Restraining Order (“TRO”) Case Number BC431895 at the California Superior Court for Injunctive and Declaratory Relief on February 16, 2010 against Ms. Xu and the Rump Board. The TRO Judge felt that there is a statute in California Civil Code to specially handle any situation like this which can have a full hearing and decision within 5 days of notice.

On February 23, 2010, ASAP Hotel filed another lawsuit ASAP Hotel Management Corporation, et al vs., Tiffany Xu, et al. Case Number BC 432355 at the California Superior Court against Ms. Xu and the Rump Board to Determine the Validity of Directors. The case was not heard in 5 days notice because proper service and summons for the Rump Board was questioned since they are foreigners and live outside the U.S. The Judge continued the hearing for a date two months later.

At the same time, ASAP Hotel held a shareholder’s meeting with proper 10 days notice at the San Gabriel Hilton on February 19, 2010, which 12,637,000 shares were either present or represented by proxy, constituting a majority of shares of 50.15% of issued and outstanding shares. At the meeting, Frank Yuan and previous board members were reelected to serve again and confirmed their Validity.

On February 19, 2010, Mr. Yuan and ASAP Hotel was served with a complaint by minority investors Case Number BC432064 at the California Superior Court for rescinding agreement and investment, fraud, breach of contract, etc. On March 23, 2010, Yuan and ASAP Hotel filed a cross-complaint against Ms. Xu, Rump Board and former employee Mr. Ian YiZhe Zhang for same allegations.

Due to three California Superior Court lawsuits have similar issues, the judge ruled to consolidate all lawsuits into one trial to be set at a later date. Because of the no judgment on all cases, ASAP Hotel’s bank account remained frozen since January 28, 2010, and ASAP Hotel was forced to file for Chapter 11 of the Bankruptcy Code to re-organize on June 3, 2010. A Debtor in Possession (“DIP”) bank account was opened with Wells Fargo Bank, and ASAP Hotel funds in the other Banks were transferred to this DIP account to maintain daily operations of ASAP Hotel’s China and U.S. offices.

Chapter 11 provides a process for rehabilitating the company's faltering business. Sometimes the company successfully works out a plan to return to profitability; sometimes, in the end, it liquidates.

The U.S. Trustee, the bankruptcy arm of the Justice Department, will appoint one or more committees to represent the interests of creditors and stockholders in working with the company to develop a plan of reorganization to get out of debt. The plan must be accepted by the creditors, bondholders, and stockholders, and confirmed by the court. However, even if creditors or stockholders vote to reject the plan, the court can disregard the vote and still confirm the plan if it finds that the plan treats creditors and stockholders fairly.

Xu and the Rump Board filed a motion to the Bankruptcy court asking the court to reject the Chapter 11 filling because they feel Yuan has no authority to file for Chapter 11 reorganization and does not represent the majority of shareholders. A hearing is set on August 31, 2010 for this motion.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

31.1	Certifications of the Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act
32.1	Certifications of the Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ASAP EXPO, INC. (Registrant)

Date: August 23, 2010	By:	/s/ Frank S. Yuan
		Frank S. Yuan, Chairman, Chief Executive Officer

GreenBox POS - FORM 10-Q - August 23, 2010

Attached files

GreenBox POS Reports