Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10Q
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from __________ to ___________
Commission file number: 000-21477
ASPI, INC.
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(Exact name of registrant as specified in its charter)
Delaware 27-0514566
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(State of Incorporation) (IRS Employer ID Number)
7609 Ralston Road, Arvada, CO 80002
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(Address of principal executive offices)
303-422-8127
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(Registrant's Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
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 for Regulation S-T (ss.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 [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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). [ ] No [ X ]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 3, 2011, there were 73,879,655 shares of the registrant's common stock
issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
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Balance Sheets - March 31, 2011 and June 30, 2010 (Audited) F-1
Statements of Operations -
For Three and Nine Months Ended March 31, 2011 and 2010 F-2
Statements of Cash Flows -
For the Nine Months Ended March 31, 2011 and 2010 F-3
Notes to the Financial Statements F-4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- Not Applicable 3
Item 4. Controls and Procedures 3
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 4
Item 1A. Risk Factors - Not Applicable 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 4
-Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable 5
Item 4. Removed and Reserved 5
Item 5. Other Information - Not Applicable 5
Item 6. Exhibits 5
SIGNATURES 6
PART I
ITEM 1. FINANCIAL STATEMENTS
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2011 2010
(Unaudited) (Audited)
(Restated)
------------------------------
ASSETS
Current Assets
Cash & Cash Equivalents $ 30,493 $ 36,468
Prepaid Expenses and Other Current Assets 54,353 53,191
--------------------------------
Total Current Assets 84,846 89,659
Property & Equipment, net of $114,680 and $49,921
accumulated depreciation, respectively 251,472 307,988
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--------------------------------
TOTAL ASSETS $ 336,318 $ 397,647
================================
LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY
Current Liabilities
Accounts Payable 39,731 24,233
Accrued Liabilities 245,362 127,218
Prepayments, Clients 47,793 16,707
Advances, Related Parties 304,486 167,062
--------------------------------
Total Current Liabilities 637,372 335,220
STOCKHOLDERS' (DEFICIT) EQUITY
Preferred Stock, $0.01 par value: 25,000,000 shares authorized, no shares - -
issued and outstanding.
Common Stock, $0.01 par value: 100,000,000 shares authorized 700,100 700,100
73,879,655 shares issued and outstanding, respectively
Additional Paid In Capital 1 1
Other Comprehensive Income (874) 77
Accumulated Deficit (1,000,281) (637,750)
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Total Stockholders' (Deficit) Equity (301,054) 62,427
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 336,318 $ 397,647
================================
See Accompanying Notes to Consolidated Financial Statements.
F-1
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED MARCH 31, 2011 and 2010
(UNAUDITED)
For the Three Months Ended For the Nine Months Ended
March 31, March 31,
2011 2010 2011 2010
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REVENUES $ 47,928 $ - $ 123,695 $ -
COST OF REVENUES 14,567 - 49,031 -
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33,361 - 74,664 -
OPERATING EXPENSES
General and Administrative 121,440 16,964 373,159 19,960
Depreciation 21,714 - 64,908 -
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Total Operating (Income) Expenses 143,154 16,964 438,067 19,960
OPERATING (LOSS) PROFIT (143,154) (16,964) (438,067) (19,960)
Interest and Other Income (Expenses) Net 872 - 872 -
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Profit before Income Taxes (108,921) (16,964) (362,531) (19,960)
Provision for Income Taxes - - - -
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NET (LOSS) INCOME $ (108,921)$ (16,964) $ (362,531) $ (19,960)
======================================================================
NET INCOME (LOSS) PER SHARE
Basic & Diluted $ - $ - $ - $ -
======================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic & Diluted 73,879,655 3,879,655 73,879,655 3,879,655
======================================================================
See Accompanying Notes to Consolidated Financial Statements.
F-2
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2011 AND 2010
(UNAUDITED)
2011 2010
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CASH FLOWS FROM OPERATING ACTIVITIES
NET (LOSS) INCOME $ (362,531) $ (19,960)
ADJUSTMENTS TO RECONCILE NET PROFIT TO NET CASH
USED IN OPERATING ACTIVITIES
Depreciation 64,908 -
CHANGES IN OPERATING ASSETS & LIABILITIES
Increase in Prepaid Expenses (1,162) -
Increase in Accounts Payable 133,642 19,960
Increase in Client Prepayments 31,086 -
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Total Cash Flow used in Operating Activities (134,057) -
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (8,392) -
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Total Cash Flow used by Investing Activities (8,392) -
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related parties 137,424 -
Subscription receivable - 100,000
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Total Cash Flow provided by Financing Activities 137,424 100,000
Foreign Currrency Translation (950) -
DECREASE IN CASH & CASH EQUIVALENTS $ (5,975) $ 100,000
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Cash and Cash Equivalents at the beginning of the period $ 36,468 $ -
======================================
Cash and Cash Equivalents at the end of the period $ 30,493 $ 100,000
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SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ -
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Cash paid for income tax $ - $ -
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See Accompanying Notes to Consolidated Financial Statements.
F-3
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
NOTE 1 - BUSINESS AND BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Business
ASPI, Inc. was incorporated in the State of Delaware in September 2008.
Prestige Prime Office, Ltd. Acquisition
Effective June 30, 2010, ASPI entered into an Acquisition Agreement with
Prestige Prime Office, Ltd. Under the Agreement, ASPI acquired all of the issued
and outstanding common stock of Prestige Prime Office, LTD. ("Prestige"), a Hong
Kong Special Administrative Region Corporation. As a result of the acquisition,
Prestige will become a wholly-owned subsidiary of ASPI.
In exchange for $50,000, cash, and 60,000,000 restricted shares of the common
stock of ASPI, ASPI acquired 100% all of the 4,000,000 issued and outstanding
shares of common stock of Prestige.
Prestige has one sole shareholder, Mr. Yeung Cheuk Hung. As a result of the
acquisition, Mr. Yeung became the majority shareholder of ASPI holding
approximately 81.21% of the issued and outstanding common stock of ASPI.
Prestige is a serviced office provider in the Far East. Prestige provides office
space that is fully furnished, equipped and staffed, located at premier
addresses in central business districts with convenient access to airports or
public transportation. Services include advanced communication system, network
access, updated IT and world-class administrative support, as well as a full
menu of business services and facilities, such as meeting rooms and video
conferencing.
Mega Action Limited
During the year ended June 30, 2010, the Company incorporated a subsidiary, Mega
Action Limited, a BVI corporation (the "Subsidiary"). Two of the Company's
directors, Yuen Ling Look and Siu Lun Tong, will act as directors of the new
Subsidiary.
In consideration of $1.00, Mega Action Limited issued the Company one share of
Mega Action Limited ("Mega Action"). Mega Action is authorized to issue up to
50,000 shares of a single class each with a par value of $1.00. There is only
one share of Mega Action share issued and outstanding. Mega Action is a wholly
owned Subsidiary of the Company. Mega Action will operate as the eastern
operations management division of the Company.
Basis of Presentation
Restatement of June 30, 2010 Balance Sheet
Subsequent to the issuance of the Company's unaudited financial statements for
the three months ended September 30, 2010, the Company determined that it would
restate its June 30, 2010 Balance Sheet to reflect the impairment of goodwill as
an loss transaction rather than a debit to additional paid in capital. The
Balance Sheet at June 30, 2010 herewith has been restated to show the changes to
F-4
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
common stock, additional paid in capital and accumulated deficit. Additionally,
the June 30, 2010 financial statements in the Company's Annual Report on Form
10-K will be restated to properly account for the impairment of goodwill from
the Prestige transaction. Consequently, the June 30, 2010 financial statements
filed with the Company's Annual Report on Form 10-K should not be relied upon.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of ASPI
and its wholly-owned subsidiaries, Prestige Prime Office, Ltd. and Mega Action
Limited. Both subsidiaries operations are located in Asia. All significant
inter-company balances and transactions have been eliminated in consolidation.
Interim Presentation
In the opinion of the management of the Company, the accompanying unaudited
financial statements include all material adjustments, including all normal and
recurring adjustments, considered necessary to present fairly the financial
position and operating results of the Company for the periods presented. The
financial statements and notes do not contain certain information included in
the Company's financial statements for the year ended June 30, 2010. Interim
results are not necessarily indicative of results for a full year or any future
period.
Significant Accounting Policies
Use of Estimates
The preparation of the 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 periods. Actual results could differ from those
estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash equivalents.
Fair Value of Financial Instruments
The carrying amount of cash, accounts payable and notes payable is considered to
be representative of its fair value because of the short-term nature of this
financial instrument.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally on the straight-line method over the
estimated useful life of each type of asset which ranges from three to five
years. Major improvements are capitalized, while expenditures for repairs and
maintenance are expensed when incurred. Upon retirement or disposition, the
related costs and accumulated depreciation are removed from the accounts, and
any resulting gains or losses are credited or charged to income.
F-5
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
Revenue Recognition
The Company recognizes revenue when it is earned and expenses are recognized
when they occur. The Company recognizes revenue from its office service
operations. Clients pay a monthly fee and such fees are recognized at that time.
Foreign Currency Translation
The financial statements of ASPI's wholly-owned subsidiaries, Prestige and Mega
are measured using the local currency (the Hong Kong Dollar (HK$) as the
functional currency. Assets and liabilities of Prestige and Mega are translated
at exchange rates as of the balance sheet date. Revenues and expenses are
translated at average rates of exchange in effect during the period. The
resulting cumulative translation adjustments have been recorded as a component
of comprehensive income (loss), included as a separate item in shareholders'
equity.
The Company is exposed to movements in foreign currency exchange rates. In
addition, the Company is subject to risks including adverse developments in the
foreign political and economic environment, trade barriers, managing foreign
operations and potentially adverse tax consequences. There can be no assurance
that any of these factors will not have a material negative impact on the
Company's financial condition or results of operations in the future.
Net Loss per Common Share
Basic net loss per common share is calculated by dividing the net loss
applicable to common shares by the weighted average number of common and common
equivalent shares outstanding during the period. For the nine months ended March
31, 2011 and 2010, there were no potential common equivalent shares used in the
calculation of weighted average common shares outstanding as the effect would be
anti-dilutive because of the net loss.
Stock-Based Compensation
Beginning January 1, 2006, the Company adopted the provisions of and accounts
for stock-based compensation using an estimate of value in accordance with the
fair value method. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which generally is the vesting period.
The Company elected the modified-prospective method, under which prior periods
are not revised for comparative purposes. The valuation method applies to new
grants and to grants that were outstanding as of the effective date and are
subsequently modified.
Other Comprehensive Income (Loss)
The Company recognizes unrealized gains and loss on the Company's foreign
currency translation adjustments as components of other comprehensive income
(loss).
F-6
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
Income Taxes
Provision for income taxes represents actual or estimated amounts payable on tax
return filings each year. Deferred tax assets and liabilities are recorded for
the estimated future tax effects of temporary differences between the tax basis
of assets and liabilities and amounts reported in the accompanying balance
sheets, and for operating loss and tax credit carry forwards. The change in
deferred tax assets and liabilities for the period measures the deferred tax
provision or benefit for the period. Effects of changes in enacted tax laws on
deferred tax assets and liabilities are reflected as adjustment to the tax
provision or benefit in the period of enactment.
Recent Accounting Pronouncements
In July 2010, the Financial Accounting Standards Board ("FASB") issued Proposed
Accounting Standard Update (Topic 450) - Disclosure of Certain Loss
Contingencies. This amendment would lower the current disclosure threshold and
broaden the current disclosure requirements to provide adequate and timely
information to assist users in assessing the likelihood, potential magnitude,
and potential timing (if known) of future cash outflows associated with loss
contingencies. For public entities, the new guidance would be effective for
fiscal years ending after December 15, 2010, and interim and annual periods in
subsequent fiscal years. The Company is currently evaluating the impact of the
future adoption of the Update.
There were various other accounting standards and interpretations issued in 2009
and 2010, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
NOTE 2 - GOING CONCERN
The Company's financial statements for the nine months ended March 31, 2011 have
been prepared on a going concern basis, which contemplates the realization of
assets and the settlement of liabilities and commitments in the normal course of
business. The Company reported a net loss of $362,531 for the nine months ended
March 31, 2011 ($108,921 for the three months ended March 31, 2011) and an
accumulated deficit of $1,000,281 at March 31, 2011. At March 31, 2011, the
Company had total current assets of $84,846 and total liabilities, all current
of $637,372 for a working capital deficit of $552,526.
The Company's ability to continue as a going concern may be dependent on the
success of management's plan discussed below. The financial statements do not
include any adjustments relating to the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
To the extent the Company's operations are not sufficient to fund the Company's
capital requirements, the Company may attempt to enter into a revolving loan
agreement with financial institutions or attempt to raise capital through the
sale of additional capital stock or through the issuance of debt. At the present
time, the Company does not have a revolving loan agreement with any financial
institution nor can the Company provide any assurance that it will be able to
enter into any such agreement in the future or be able to raise funds through
the further issuance of debt or equity in the Company.
F-7
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
NOTE 3 - ADVANCES, RELATED PARTIES
During the year ended June 30, 2010, Top Growth Holdings Group, Inc, an
affiliate and entity of which Ms. Look, an officer and director of the Company,
advanced $2,996 to the Company. Such funds are due on demand.
During the year ended June 30, 2010, Mr. Yeung Cheuk Hung, the manager of
Prestige and the majority shareholder of the Company, has advanced funds at June
30, 2010 of $163,745 to support the operations of Prestige. During the nine
months ended March 31, 2011, Mr. Yeung Cheuk Hung advanced additional funds of
$137,424. At March 31, 2011, the Company owes him $301,169. Such funds are due
on demand.
During the year ended June 30, 2010, Ms. Look, an officer and director of the
Company and the manager of Mega, advanced funds of $321 to Mega to support
operations. Such funds are due on demand.
NOTE 4 - PREPAYMENTS, CLIENTS
Clients pay a deposit on the Company's provided services upon entering into
lease with the Company. Such deposits are recognized by the Company not only as
deposits, but as a corresponding liability. At March 31, 2011, the Company had
$47,793 in prepayment liabilities.
NOTE 5 - COMMITMENTS AND CONTIGENCIES
Prestige operates from Silvercord, No.30 Canton Road, Tsimshatsui, which is a
premier commercial building in Hong Kong. The center is located on one floor and
occupies approximately 5,000 square feet. We pay an annual rental rate of
$213,780. The Company's minimum annual rent rate is:
Fiscal Year Ended
June 30, Annual Rent
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2011 $213,780
2012 $195,965
NOTE 6 - STOCKHOLDERS' (DEFICIT) EQUITY
The authorized capital stock of the Company is 100,000,000 shares of common
stock with a $0.01 par value and 25,000,000 shares of preferred stock with a par
value of $0.01 per share. At March 31, 2011, the Company had 73,879,655 shares
of its common stock issued and outstanding.
NOTE 7 - TAXES
The Company is subject to foreign and domestic income taxes. The Company has had
no income, and therefore has paid no income tax.
Deferred income taxes arise from temporary timing differences in the recognition
of income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit from net operating loss
(NOL) carry-forwards. The NOL carry forwards expire in various years through
2030. The Company's deferred tax assets are offset by a valuation allowance due
to the uncertainty of the realization of the NOL carry-forwards. NOL
carry-forwards may be further limited by a change in company ownership and other
provisions of the tax laws.
F-8
ASPI, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Nine Months Ended March 31, 2011
(Unaudited)
The Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
Estimated NOL Valuation Net Tax
Period Ending Carry-forward Allowance Benefit
Nine months ended
March 31, 2011 913,740 (913,740) -
June 30, 2010 502,947 (502,947) -
NOTE 8 - SUBSEQUENT EVENTS
The Company has evaluated it activities subsequent to the nine months ended
March 31, 2011 and found no other reportable subsequent events.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2010, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
PLAN OF OPERATIONS
ASPI's strategy is to be a serviced office provider in the Far East through its
wholly-owned subsidiary, Prestige Prime Office Ltd. in Hong Kong.
The office space provided is fully furnished, equipped and staffed, located at
premier addresses in central business districts with convenient access to
airports or public transportation. Services include advanced communication
system, network access, updated IT and world-class administrative support, as
well as a full menu of business services and facilities, such as meeting rooms
and video conferencing.
Prestige intends to provide services that will support the growing trend of
mobile and at home working. Supporting workers at home and on the road with
services such as Virtual Office and Virtual PA, providing dedicated business
addresses as their business base, as well as mail and call handling services.
The Company will need substantial additional capital to support its budget. The
Company has had minimal revenues. The Company has no committed source for any
funds as of date hereof. In the event funds cannot be raised when needed, the
Company may not be able to carry out its business plan, may never achieve sales
or royalty income, and could fail in business as a result of these
uncertainties.
The Company may borrow money to finance its future operations, although it does
not currently contemplate doing so. Any such borrowing will increase the risk of
loss to the investor in the event the Company is unsuccessful in repaying such
loans.
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2010, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
1
RESULTS OF OPERATIONS
For the Three Months Ended March 31, 2011 Compared to the Three Months Ended
--------------------------------------------------------------------------------
March 31, 2010
--------------
During the three months ended March 31, 2011, we recognized $47,928 from our
service office operations. During the three months ended March 31, 2011, we
incurred cost of revenues of $14,567 resulting in a gross profit of $33,361.
During the three months ended December 31, 2009, we did not recognize any
revenue.
During the three months ended March 31, 2011, we incurred operational expenses
of $143,154. During the three months ended March 31, 2010, we incurred $16,964
in operational expenses. The increase of $126,190, was a result of the increased
operational activities due to the acquisition of our subsidiary Prestige.
During the three months ended March 31, 2011, we incurred a net loss of
$108,921. During the three months ended March 31, 2010, we incurred a net loss
of $16,964. The increase of $91,957 was a result of the increase in our
operational activities, as discussed above.
For the Nine Months Ended March 31, 2011 Compared to the Nine Months Ended March
--------------------------------------------------------------------------------
31, 2010
--------
During the nine months ended March 31, 2011, we recognized $123,695 from our
service office operations. During the nine months ended March 31, 2011, we
incurred cost of revenues of $49,031 resulting in a gross profit of $74,664.
During the nine months ended March 31, 2010, we did not recognize any revenue.
During the nine months ended March 31, 2011, we incurred operational expenses of
$438,067. During the nine months ended March 31, 2010, we incurred $19,960 in
operational expenses. The increase of $418,107 was a result of the increased
operational activities due to the acquisition of our subsidiary Prestige.
During the nine months ended March 31, 2011, we incurred a net loss of $362,531.
During the nine months ended March 31, 2011, we incurred a net loss of $19,960.
The increase of $342,571 was a result of the increase in our operational
activities, as discussed above.
LIQUIDITY
At March 31, 2011, we had total current assets of $84,846, consisting of $30,493
in cash and cash equivalents and $54,538 in prepaid expenses and other assets.
At March 31, 2011, we had total liabilities of $637,372, all current. Total
liabilities included $39,731 in accounts payable, $245,362 in accrued
liabilities $47,793 in client prepayments and $304,486 in advances from related
parties.
During the nine months ended March 31, 2011, we used funds of $134,057 in our
operational activities. During the nine months ended March 31, 2011, we
recognized a net loss of $362,531, which was adjusted for depreciation of
$64,908. During the nine months ended March 31, 2010, we did not use funds in
our operational activities. During the nine months ended March 31, 2010, we
incurred a net loss of $19,960 that was not adjusted for any non-cash
activities.
During the nine months ended March 31, 2011, we used $8,392 in investing
activities in the purchase of office equipment. During the nine months ended
March 31, 2010, we neither used nor received funds from investing activities.
2
During the nine months ended March 31, 2011, we received $137,424 from our
financing activities. During the nine months ended March 31, 2010, we received
$100,000 from our financing activities.
During the year ended June 30, 2010, Top Growth Holdings Group, Inc, an
affiliate and entity of which Ms. Look, an officer and director of the Company,
advanced $2,996 to the Company. Such funds are due on demand.
During the year ended June 30, 2010, Mr. Yeung Cheuk Hung, the manager of
Prestige and the majority shareholder of the Company, has advanced funds at June
30, 2010 of $163,745 to support the operations of Prestige. During the nine
months ended March 31, 2011, Mr. Yeung Cheuk Hung advanced additional funds of
$137,424. At March 31, 2011, the Company owes him $301,169. Such funds are due
on demand.
During the year ended June 30, 2010, Ms. Look, an officer and director of the
Company and the manager of Mega, advanced funds of $321 to Mega to support
operations. Such funds are due on demand.
Off-Balance Sheet Arrangements
------------------------------
We have no material off-balance sheet arrangements nor do we have any
unconsolidated subsidiaries.
Short Term
----------
On a short-term basis, we generate limited revenues, which are not sufficient to
cover operations. Based on our limited operating history in the service office
industry, we will continue to have insufficient revenue to satisfy current and
recurring liabilities for the near future. For short term needs we will be
dependent on receipt, if any, of offering proceeds.
Capital Resources
-----------------
We have only common stock as our capital resource.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for working capital.
Need for Additional Financing
-----------------------------
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
3
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, our Chief Executive
Officer has concluded that our disclosure controls and procedures are effective
in timely alerting them to material information required to be included in our
periodic SEC filings and to ensure that information required to be disclosed in
our periodic SEC filings is accumulated and communicated to our management,
including our Chief Executive Officer, to allow timely decisions regarding
required disclosure as a result of the deficiency in our internal control over
financial reporting discussed below.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended March 31, 2011, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
4
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
ITEM 2. CHANGES IN SECURITIES
NONE.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. REMOVED AND RESERVED
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
Exhibit 32.1 Certification of Principal Executive and Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
5
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ASPI, INC.
(Registrant)
Dated: May 9, 2011 By: /s/ Look Yuen Ling
-------------------
Look Yuen Ling
President, Chief Executive Officer
and Chief Financial Officer
