Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------
FORM 10Q
-----------------
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 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.
---------------
(Exact name of registrant as specified in its charter)
Delaware 27-0514566
-------- ----------
(State of Incorporation) (IRS Employer ID Number)
7609 Ralston Road, Arvada, CO 80002
-------------------------------------
(Address of principal executive offices)
303-422-8127
--------------
(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 [X] 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). Yes [ ] 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 February 14, 2012, there were 98,879,655 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheets - December 31, 2011 and June 30, 2011 (Audited) F-1
Statements of Operations -
For Three and Six Months Ended September 30, 2011 and 2010 F-2
Statements of Cash Flows -
For the Three and Six Months Ended September 30, 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 4
Item 4. Controls and Procedures 4
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 5
-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 6
SIGNATURES 7
PART I
ITEM 1. FINANCIAL STATEMENTS
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
2011 2011
(Unaudited) (Audited)
--------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 9,114 $ 26,506
Prepaid expenses and other current assets 47,155 50,813
--------------------------------
Total current assets 56,269 77,319
Property and equipment, net of $201,755 and $136,756
accumulated depreciation, respectively 548,640 229,709
--------------------------------
Goodwill 319,710 -
--------------------------------
Total assets $ 924,619 $ 307,028
================================
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable 60,762 34,693
Accrued liabilities 261,060 263,378
Prepayments, clients 109,132 50,121
Notes payable 428,164 -
Advances, related parties 413,275 355,406
--------------------------------
Total current liabilities 1,272,393 703,598
Total liabilities 1,272,393 703,598
--------------------------------
Stockholders' deficit
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; and 988,796 738,797
98,879,655 and 73,879,655 shares issued and outstanding as of
December 31, 2011 and June 30, 2011, respectively
Other comprehensive income 5,398 2,268
Accumulated deficit (1,341,968) (1,137,635)
--------------------------------
Total stockholders' deficit (347,774) (396,570)
--------------------------------
Total liabilities and stockholders' deficit $ 924,619 $ 307,028
================================
See accompanying notes to consolidated financial statements.
F-1
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2011 AND 2010
(UNAUDITED)
Three Months Ended Six Months Ended
December 30, December 31,
2011 2010 2011 2010
------------------------------------------------------------------------
Revenue $ 172,271 $ 43,522 $ 259,843 $ 75,767
Cost of revenue 20,723 15,446 36,238 34,464
------------------------------------------------------------------------
Gross profit 151,548 28,076 223,605 41,303
Operating expenses
General and administrative 221,159 147,037 364,073 251,718
Depreciation 42,691 21,638 64,635 43,194
------------------------------------------------------------------------
Total operating expenses 263,850 168,675 428,708 294,912
------------------------------------------------------------------------
Loss from operations (112,302) (140,599) (205,103) (253,609)
Other income (expense)
Interest and other income - - 770 -
Interest expense - (1) - (1)
------------------------------------------------------------------------
Total other income (expense) - (1) 770 (1)
------------------------------------------------------------------------
Net loss $ (112,302) $ (140,600) $ (204,333) $ (253,610)
========================================================================
Other comprehensive income (loss)
Foreign currency translation adjustment 575 (1,451) 3,130 -
------------------------------------------------------------------------
Total comprehensive loss $ (111,727) $ (142,051) $ (201,203) $ (253,610)
========================================================================
Loss per common share- basic:
Net loss $ (0.00) (0.00) $ (0.00) $ (0.00)
========================================================================
Weighted average common shares outstanding:
Basic 98,604,619 73,879,655 86,243,785 73,879,655
========================================================================
See accompanying notes to consolidated financial statements.
F-2
ASPI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2011 and 2010
(UNAUDITED)
December 31,
2011 2010
--------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (204,333) $ (253,610)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 64,635 43,194
Changes in operating assets and liabilities:
Prepaid expenses, trade, and deposits 3,557 9,833
Accounts payable and accrued liabilities 27,174 86,937
Prepayments from clients 59,011 17,494
--------------------------------
Total cash flow used in operating activities (49,956) (96,152)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of assets (1,831) (1,345)
--------------------------------
Total cash flow used in investing activities (1,831) (1,345)
CASH FLOW FROM FINANCING ACTIVITIES
Advances from officers and directors 57,870 73,668
Payment to related party (21,683) -
--------------------------------
Total cash flow provided by financing activities 36,187 73,668
Effect of exchange rate changes on cash (1,810) (1,134)
--------------------------------
NET CHANGE IN CASH (17,392) (24,963)
CASH AT BEGINNING OF PERIOD 26,506 36,468
--------------------------------
CASH AT END OF PERIOD $ 9,114 $ 11,505
================================
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ -
--------------------------------
Cash paid for income tax $ - $ -
--------------------------------
See accompanying notes to consolidated financial statements.
F-3
NOTE 1 - BUSINESS AND BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include the accounts of ASPI,
Inc, a Delaware corporation, its wholly-owned subsidiaries, Mega Action Limited
("Mega"), a British Virgin Island Corporation, and Prestige Prime Office,
Limited (Prestige), a Hong Kong Special Administrative Region Corporation
(collectively referred to as the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
Interim Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for financial
information and with the instructions to Form 10-Q. They do not include all
information and footnotes required by United States generally accepted
accounting principles for complete financial statements. However, except as
disclosed herein, there have been no material changes in the information
disclosed in the notes to the financial statements for the year ended June 30,
2011 included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The unaudited consolidated financial
statements should be read in conjunction with those financial statements
included in the Form 10-K. In the opinion of Management, all adjustments
considered necessary for a fair presentation, consisting solely of normal
recurring adjustments, have been made. Operating results for the three and six
months ended December 31, 2011 are not necessarily indicative of the results
that may be expected for the year ending June 30, 2012.
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.
The Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At December 31, 2011 and June 30,
2011, the balance did not exceed the federally insured limit.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received upon sale of an asset
or paid upon transfer of a liability in an orderly transaction between market
F-4
participants at the measurement date and in the principal or most advantageous
market for that asset or liability. The fair value should be calculated based on
assumptions that market participants would use in pricing the asset or
liability, not on assumptions specific to the entity. In addition, the fair
value of liabilities should include consideration of non-performance risk
including our own credit risk.
In addition to defining fair value, the standard expands the disclosure
requirements around fair value and establishes a fair value hierarchy for
valuation inputs. The hierarchy prioritizes the inputs into three levels based
on the extent to which inputs used in measuring fair value are observable in the
market. Each fair value measurement is reported in one of the three levels which
is determined by the lowest level input that is significant to the fair value
measurement in its entirety. These levels are:
Level 1 - inputs are based upon unadjusted quoted prices for identical
instruments traded in active markets.
Level 2 - inputs are based upon significant observable inputs other
than quoted prices included in Level 1, such as quoted prices for
identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions
are observable in the market or can be corroborated by observable
market data for substantially the full term of the assets or
liabilities.
Level 3 - inputs are generally unobservable and typically reflect
management's estimates of assumptions that market participants would
use in pricing the asset or liability. The fair values are therefore
determined using model-based techniques that include option pricing
models, discounted cash flow models, and similar techniques.
The carrying value of the Company's financial assets and liabilities which
consist of cash, accounts payable, and advances from related parties in
management's opinion approximate their fair value due to the short maturity of
such instruments. These financial assets and liabilities are valued using level
3 inputs, except for cash which is at level 1. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant interest,
exchange, or credit risks arising from these financial instruments.
Net Loss per Common Share
Basic net loss per common share is calculated by dividing total comprehensive
loss applicable to common shares by the weighted average number of common and
common equivalent shares outstanding during the period. For the periods ended
December 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.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with the applicable
FASB standard, "Accounting for the Impairment or Disposal of Long-Lived Assets."
Under the standard, long-lived assets are tested for recoverability whenever
events or changes in circumstances indicate that their carrying amounts may not
be recoverable. An impairment charge is recognized for the amount, if any, which
the carrying value of the asset exceeds the fair value.
F-5
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).
Recent Accounting Pronouncements
There were various other accounting standards and interpretations issued in
2011, 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 three and six months ended December
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 $204,322 for the
six months ended December 31, 2011 and an accumulated deficit of $1,341,968 at
December 31, 2011. At December 31, 2011, the Company had total current assets of
$56,269 and total liabilities, all current of $1,272,393 for a working capital
deficit of $1,216,124.
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.
During the 2012 fiscal year, the Company intends to continue its efforts in
growing its office service operations.
NOTE 3 - LEASE ACQUISITION
On September 8, 2011, the Company and its wholly-owned subsidiary, Prestige
entered into an Agreement to purchase certain leaseholds from an unrelated third
party in exchange for 25,000,000 of shares of the Company's restricted common
stock and a $450,000 promissory note. The transfer of leases and the assets and
liabilities associated with the leases occurred on October 1, 2011.
The $450,000 promissory note has a term of six months and therefor will be due
on March 1, 2012. The promissory note does not accrue interest.
As part of the acquisition of the leases, the Company acquired the furniture,
fixtures and office equipment associated with the acquisition. Such property was
considered to have a book value of $384,107.
F-6
The following table presents the allocation of acquisition costs to the assets
acquired and liabilities assumed, based on their fair values at October 1, 2011:
Purchase Price
25,000,000 shares of the Company's common
stock valued at $0.01 per share $ 250,000
Promissory Note 450,000
-----------------
Total Consideration $ 650,000
=================
Allocation of purchase price
Furniture and Fixtures $ 335,895
Office Equipment 44,552
Computer Equipment 3,660
-----------------
384,107
Liabilities (53,817)
-----------------
Goodwill $ 319,710
NOTE 4 - PROPERTY AND EQUIPMENT
At December 31, 2011 and June 30, 2011, Property and Equipment consisted of:
December 31, June 30,
2011 2011
-------------------- ---------------------
Furniture and Fixtures $ 592,706 $ 256,811
Office Equipment 137,678 93,126
Computer Equipment 20,011 16,528
-------------------- ---------------------
750,395 366,465
Accumulated Depreciation (201,755) (136,756)
-------------------- ---------------------
Total $ 548,640 $ 229,709
==================== =====================
Property and equipment held by Prestige have an original cost basis valued in
Hong Kong Dollars. The change in value is a result of foreign currency exchange
differences.
NOTE 5 - ADVANCES, RELATED PARTIES
During the years ended June 30, 2011 and 2010, Mr. Yeung Cheuk Hung, the manager
of Prestige and the majority shareholder of the Company, has advanced funds of
$179,884 and $163,745, respectively, to support the operations of Prestige.
During the six months ended December 31, 2011, Mr. Yeung Cheuk Hung advanced an
additional $19,683. At December 31, 2011, the Company owes him $363,311. Such
funds are unsecured, bear no interest, and are due on demand.
During the year ended June 30, 2011 and 2010, Ms. Look, an officer and director
of the Company and the manager of Mega, advanced funds of $7,710 and $321,
respectively to Mega to support operations. During the six months ended December
31, 2011, Ms. Look advanced an additional $36,062. At December 31, 2011, Ms.
Look is owed $36,062. Such funds are unsecured, bear no interest, and are due
on demand.
During the year ended June 30, 2010 and 2010, Top Growth Holdings Group, Inc, an
affiliate and entity of which Ms. Look, an officer and director of the Company,
advanced $750 and $2,996, respectively to the Company. At December 31, 2011, Top
Growth Holdings Group, Inc. is owed $3,746. Such funds are unsecured, bear no
interest, and are due on demand.
F-7
NOTE 6 - PREPAYMENTS, CLIENTS
Clients pay a deposit on the Company's provided services upon entering into a
lease agreement with the Company. Such deposits are recognized by the Company
not only as deposits, but as a corresponding liability. At December 31, 2011 and
June 30, 2011, the Company had $109,132 and $50,121, respectively in prepayment
liabilities.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
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
-------- -----------
2012 $195,965
NOTE 8 - STOCKHOLDERS' DEFICIT
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 December 31, 2011, the Company had 98,879,655
shares of its common stock issued and outstanding.
During the six months end December 31, 2011, the Company issued 25,000,000
shares of its common stock valued at $250,000 in connection with the acquisition
of certain leases, as discussed in Note 3.
NOTE 9 - SUBSEQUENT EVENTS
On January 15, 2011, the Company held its Annual Shareholder Meeting. At such
Shareholder Meeting, the Shareholders of the Company approved the following
actions:
- The re-election of Yuen Ling Look, Siu Fong Kelly Yeung and Sui Lun
Tong to the Board of Directors.
- The appointment of DeJoya & Griffith, as the Company's auditors.
- Amending the Company's Articles of Incorporation to change of the
Company's name to JV Group, Inc.
- Amending the Company's Articles of Incorporation to increase the
number of authorized common stock from One Hundred Million
(100,000,000) shares to One Billion (1,000,000,000) shares.
At the time of this filing, the Company is in the process of filing the
necessary documentation with the Secretary of State of Nevada to amend it
Articles of Incorporation to effect the name change and the increase in
authorized capital.
F-8
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, 2011, 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.
On September 8, 2011, the Company and its wholly-owned subsidiary, Prestige
entered into an Agreement to purchase certain leaseholds from an unrelated third
party in exchange for 25,000,000 shares of the Company's restricted common stock
and a $450,000 promissory note with anticipated due date of six months from
issuance. The promissory note will not accrue interest. The transfer of leases
occurred on October 1, 2011.
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.
1
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2011, 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.
RESULTS OF OPERATIONS
For the Three Months Ended December 31, 2011 Compared to the Three Months Ended
December 31, 2010
During the three months ended December 31, 2011 and December 31, 2010, we
recognized $172,271 and $43,522 from our service office operations. The increase
of $128,749 is a result of an increase in clients, combined with an increase in
the number leases held by the Company due to the acquisition of such leases on
October 1, 2011. During the three months ended December 31, 2011 and 2010, we
incurred cost of revenues of $20,723 and $15,446, respectively. During the three
months ended December 31, 2011 and 2010, we recognized resulting gross profits
of $151,548 and $28,076, respectively. The resulting increase in gross profits
is a result of the increase in revenues offset by a decrease in cost of
revenues.
During the three months ended December 31, 2011, we incurred operational
expenses of $263,850. During the three months ended December 31, 2010, we
incurred $168,675 in operational expenses. The increase of $95,175 was a result
of a $74,122 increase in general and administrative expenses and a $21,053
increase in depreciation expenses.
During the three months ended December 31, 2011, we incurred a net loss of
$112,302. During the three months ended December 31, 2010, we incurred a net
loss of $140,600. The decrease of $28,298 was a result of the increase of
$128,749 in revenues offset by a $95,175 increase in operational expenses, as
discussed above.
For the Six Months Ended December 31, 2011 Compared to the Six Months Ended
December 31, 2010
During the six months ended December 31, 2011 and September 30, 2010, we
recognized $259,843 and $75,767 from our service office operations. The increase
of $184,076 is a result of an increase in clients, combined with an increase in
the number leases held by the Company due to the acquisition of such leases on
October 1, 2011. During the six months ended December 31, 2011 and 2010, we
incurred cost of revenues of $36,238 and $34,464, respectively. During the six
months ended December 31, 2011 and 2010, we recognized resulting gross profits
of $223,605 and $41,303, respectively. The resulting increase in gross profits
is a result of the increase in revenues caused by the acquisition of leases
offset by a minimal decrease in cost of revenues.
During the six months ended December 31, 2011, we incurred operational expenses
of $428,708. During the six months ended December 31, 2010, we incurred $294,912
in operational expenses. The increase of $133,796 was a result of an $112,355
increase in general and administrative expenses and a $21,441 increase in
depreciation expenses.
During the six months ended December 31, 2011, we incurred a net loss of
$204,333. During the six months ended December 31, 2010, we incurred a net loss
of $253,610. The decrease of $49,277 was a result of the increase of
$184,076 in revenues offset by a $133,796 increase in operational expenses, as
discussed above.
2
LIQUIDITY
At December 31, 2011, we had total current assets of $56,269, consisting of
$9,114 in cash and cash equivalents and $47,155 in prepaid expenses and other
assets. At December 31, 2011, we had total liabilities of $1,272,393, all
current. Total liabilities included $60,762 in accounts payable, $261,060 in
accrued liabilities $109,132 in client prepayments, $428,164 in note payables
and $413,275 in advances from related parties.
During the six months ended December 31, 2011, we used funds of $49,592 in our
operational activities. During the six months ended December 31, 2011, we
recognized a net loss of $204,333, which was adjusted for depreciation of
$64,999. During the six months ended December 31, 2010, we used funds of $96,232
in our operational activities. During the six months ended December 31, 2010, we
incurred a net loss of $253,610 which was adjusted for depreciation of $43,114.
During the six months ended December 31, 2011, we used $1,831 to acquire office
equipment. During the six months ended December 31, 2010, we used $1,345 in our
investing activities consisting of the purchase of office equipment.
During the six months ended December 31, 2011, we received $36,187 from our
financing activities. During the six months ended December 31, 2010, we received
$73,668 from our financing activities.
During the years ended June 30, 2011 and 2010, Mr. Yeung Cheuk Hung, the manager
of Prestige and the majority shareholder of the Company, has advanced funds of
$179,884 and $163,745, respectively, to support the operations of Prestige.
During the six months ended December 31, 2011, Mr. Yeung Cheuk Hung advanced an
additional $19,683. At December 31, 2011, the Company owes him $363,311. Such
funds are unsecured, bear no interest, and are due on demand.
During the year ended June 30, 2011 and 2010, Ms. Look, an officer and director
of the Company and the manager of Mega, advanced funds of $7,710 and $321,
respectively to Mega to support operations. During the six months ended December
31, 2011, Ms. Look advanced an additional $36,062. At December 31, 2011, Ms.
Look is owed $36,062. Such funds are unsecured, bear no interest, and are due on
demand.
During the year ended June 30, 2010 and 2010, Top Growth Holdings Group, Inc, an
affiliate and entity of which Ms. Look, an officer and director of the Company,
advanced $750 and $2,996, respectively to the Company. At December 31, 2011, Top
Growth Holdings Group, Inc. is owed $3,746. Such funds are unsecured, bear no
interest, and 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.
3
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
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 December 31, 2011, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
4
ITEM 2. CHANGES IN SECURITIES
The Company made the following unregistered sales of its securities
from October 1, 2010 through December 31, 2011.
Date of Sale Title of Securities Number of Shares Consideration Class of Purchase
------------------------ ----------------------- ----------------------- ------------------------- --------------------
10/1/11 Common 25,000,00 Acquisition of leases Business Associate
Exemption From Registration Claimed
All of the sales by the Company of its unregistered securities were made by the
Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). All of the individuals and/or entities listed above that
purchased the unregistered securities were almost all existing shareholders, all
known to the Company and its management, through pre-existing business
relationships, as long standing business associates and employees. All
purchasers were provided access to all material information, which they
requested, and all information necessary to verify such information and were
afforded access to management of the Company in connection with their purchases.
All purchasers of the unregistered securities acquired such securities for
investment and not with a view toward distribution, acknowledging such intent to
the Company. All certificates or agreements representing such securities that
were issued contained restrictive legends, prohibiting further transfer of the
certificates or agreements representing such securities, without such securities
either being first registered or otherwise exempt from registration in any
further resale or disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. REMOVED AND RESERVED
ITEM 5. OTHER INFORMATION
NONE.
5
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
Exhibit 101.INS XBRL Instance Document
Exhibit 101.SCH XBRL Taxonomy Extension Schema Document (1)
Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
------------
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed
not filed for purposes of Section 18 of the Securities Exchange Act of
1934, and otherwise is not subject to liability under these sections.
6
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: February 14, 2012 By: /s/ Look Yuen Ling
-------------------
Look Yuen Ling
President, Chief Executive
Officer and Chief Financial
Officer
