Jacksam Corp - Quarter Report: 2007 June (Form 10-Q)

10-Q June 30, 2007

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

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

For the transition period from _____ to _____

Commission File Number: 033-33263

ASIA PREMIUM TELEVISION GROUP, INC.

(Name of small business issuer as specified in its charter)


NEVADA		62-1407521
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

SUITE 602, 2 NORTH TUANJIEHU STREET, CHAOYANG DISTRICT,
BEIJING 100026, PEOPLE’S REPUBLIC OF CHINA

(Address of principal executive offices)

86-10-6582-7900

(Issuer’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 preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. S Yes £No

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

Large accelerated filer £

Accelerated filer £

Non-accelerated filer S

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. £Yes £No

As of August 8, 2007, the registrant had 1,613,297 shares of its common stock outstanding.

ASIA PREMIUM TELEVISION GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE

QUARTERLY PERIOD ENDED DECEMBER 31, 2006

INDEX


PART I	FINANCIAL INFORMATION	Page
Item 1.	Unaudited Condensed Consolidated Financial Statements	3
	Consolidated Balance Sheets	3
	Unaudited Consolidated Statements of Operations and Other Comprehensive Income	4
	Unaudited Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	15
Item 3	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4	Controls and Procedures	20
PART II	OTHER INFORMATION	21
Item 1	Legal Proceedings	21
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3	Defaults Upon Senior Securities	21
Item 4	Submission of Matters to a Vote of Security Holders	21
Item 5	Other Information	22
Item 6	Exhibits	22

PART I. FINANCIAL INFORMATION

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

ASSETS


		June 30, 2007		March 31 2007
		(Unaudited)		(Audited)
CURRENT ASSETS
Cash	$	7,234,669	$	5,209,406
Short-term investment		-		25,931
Accounts receivable, net of allowance for doubtful accounts (Note 2)		6,894,294		8,049,236
Receivable from related party, net of allowance for doubtful accounts (Note 10)		40,839		36,874
Other receivables, net of allowance for doubtful accounts		263,081		244,190
Prepaid expenses (Note 3)		2,230,823		1,449,404
Other current assets		35,741		30,370
Total Current Assets		16,699,447		15,045,411
PROPERTY AND EQUIPMENT, NET (Note 4)		981,875		1,006,390

Total Assets	$	17,681,322	$	16,051,801
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	10,114,269	$	9,720,917
Accounts payable – related party (Note 10)		78,554		70,693
Accrued expenses		467,456		451,001
Customer deposits		2,216,919		828,778
Other payables		182,008		262,206
Short-term loan (Note 5)		656,556		645,920
Notes payable, current (Note 6)		70,908		108,514
Convertible notes payable (Note 6)		4,000,000		4,000,000
Total Current Liabilities		17,786,670		16,088,029

Total Liabilities	$	17,786,670	$	16,088,029
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $.001 par value, 1,750,000,000 shares authorized, 1,623,297 shares issued, 1,613,297 shares outstanding		1,623		1,623
Less: Treasury stock		(10)		(10)
Capital in excess of par value (deficit)		(2,453,719)		(2,453,719)
Accumulated other comprehensive income		188,287		125,582
Retained earnings (deficit)		2,158,471		2,290,296
Total Stockholders’ Equity (Deficit)		(105,348)		(36,228)

Total Liabilities and Stockholders’ Equity (Deficit)	$	17,681,322	$	16,051,801

The accompanying notes are an integral part of these consolidated financial statements.

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations
and Other Comprehensive Income


		For the Three Months Ended June 30,
		2007		2006
REVENUE	$	15,590,570	$	20,491,876
COST OF SALES		14,796,311		19,540,806
GROSS PROFIT		794,259		951,070
EXPENSE
General and administrative		361,268		375,820
Bad debt expenses (recovery) (Note 8)		510,473		(53,470)
Depreciation		44,979		32,483
Total Expenses		916,720		354,833

INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)		(122,461)		596,237
OTHER INCOME (EXPENSE)
Interest expense		(11,918)		(2,730)
Interest income		16,414		5,619
Other income		(6,447)		-
Total Other Income (Expense)		(1,951)		2,889
INCOME (LOSS) BEFORE INCOME TAXES		(124,412)		599,126
CURRENT INCOME TAX EXPENSE		7,413		18,472
NET INCOME (LOSS)	$	(131,825)	$	580,654

OTHER COMPREHENSIVE INCOME
Foreign Currency translation Adjustment		62,705		3,415

TOTAL COMPREHESIVE INCOME	$	(69,120)	$	584,069

BASIC INCOME (LOSS) PER SHARE (Note 13)	$	(0.08)	$	0.36

DILUTED EARNINGS (LOSS) PER SHARE (Note 13)	$	(0.08)	$	0.33

The accompanying notes are an integral part of these consolidated financial statements.

ASIA PREMIUM TELEVISION GROUP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows


		For the Three Months Ended June 30,
		2007		2006

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	$	(131,825)	$	580,654
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense		44,979		32,483
Bad debt expense (recovery)		510,473		(53,470)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable & other receivable		602,371		(3,780,110)
Decrease (Increase) in prepaid expense		(781,419)		1,920,765
Decrease (Increase) in other current assets		(5,370)		(3,766)
Decrease (Increase) in other non-current assets		-		5,918
Increase in accounts payable & other payable		313,153		3,083,765
Increase (Decrease) in accrued expenses		16,455		32,126
Increase (Decrease) in customer deposits		1,388,142		1,614,643
Exchange gain		90,992		6,974

Net Cash Provided by Operating Activities		2,047,951		3,439,982

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property and equipment		(25,811)		(58,058)
Proceeds from note receivable		25,930		(125,819)

Net Cash Provided (Used) by Investing Activities		119		(183,877)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loan		393,933		-
Payments for short-term loan		(383,297)		-
Payments for note payable		(37,607)		(36,973)
(Increase) in advances receivable-related party		(3,697)		(19,326)
Increase in advances payable-related party		7,861		10,593

Net Cash Used by Financing Activities		(22,807)		(45,706)

NET INCREASE IN CASH		2,025,263		3,210,399

CASH AT BEGINNING OF PERIOD		5,209,406		2,932,698

CASH AT END OF PERIOD	$	7,234,669	$	6,143,097

Cash paid during the period for
Interest	$	11,918	$	3,141
Income taxes	$	10,419	$	13,548

The accompanying notes are an integral part of these consolidated financial statements

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of Asia Premium Television Group, Inc and Subsidiaries (the Company) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of such consolidated financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s most recent audited consolidated financial statements and notes included in its annual report on Form 10-K for the fiscal year ended March 31, 2007, filed on June 28, 2007. Operating results for the three months ended June 30, 2007, are not necessarily indicative of the results that may be expected for longer periods or the entire year.

Organization

Asia Premium Television Group, Inc. (“Parent”) was organized under the laws of the State of Nevada on September 21, 1989. Parent went through various name changes prior to September 2002 when the name was changed to Asia Premium Television Group, Inc. Asia Premium Television Group, Inc. was originally formed to purchase, merge with or acquire any business or assets which management believes has potential for being profitable.

Parent entered into a stock for stock acquisition with Beijing Asia Hongzhi Advertising Co., Ltd. (“BAHA Subsidiary”) during March 2003, which was finalized on July 9, 2004, in a transaction that has been accounted for as a recapitalization of BAHA in a manner similar to a reverse purchase. There was no adjustment to the carrying values of the acquired assets or liabilities. Operations prior to July 2004 are those of BAHA. The parent is the continuing entity for legal purposes; BAHA is the continuing entity for accounting purposes.

Subsidiaries

Beijing Asia Hongzhi Advertising Co., Ltd. (“BAHA Subsidiary”) was organized under the laws of the People’s Republic of China on June 1, 1995 as Shandong Hongzhi Advertising Co., Ltd. In July 2003, its name was changed to Beijing Asia Hongzhi Advertising Co., Ltd.

Beijing Hongzhi Century Advertising Co., Ltd (“BHCA Subsidiary”) was organized under the laws of the People’s Republic of China on January 7, 2003 as Beijing Yongfu Century Consulting Co., Ltd. as a wholly-owned subsidiary of BAHA. In March 2003 BHCA Subsidiary changed its name to Beijing Hongzhi Century Advertising Co., Ltd.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Subsidiaries (Continued)

Shandong Hongzhi Communications and Career Advertising Co., Ltd. (“SHCCA Subsidiary”) was organized under the laws of the People’s Republic of China on April 29, 2003 as a wholly-owned subsidiary of BAHA.

Tibet Asia Culture Media Co., Ltd (“TACM Subsidiary”) was organized under the laws of the People’s Republic of China in April 2004 as a wholly-owned subsidiary of BAHA.

Beijing Asia Qiangshi Media Advertising Co., Ltd (“BAQM Subsidiary”) was organized under the laws of the People’s Republic of China in April 2005 as a wholly-owned subsidiary of BAHA.

Tibet Hongzhi Advertising Co., Ltd. (“THZA Subsidiary”) was organized under the laws of the People’s Republic of China in April 2006 as a wholly-owned subsidiary of BHCA.

Asia Premium Television Group, Inc. (“APTV-BVI Subsidiary”) was formed on December 28, 2002, as a British Virgin Island Company.

American Overseas Investment Company (“AOI Subsidiary”), a company incorporated in Macau SAR, China, was acquired by the Company in June 2001.

On September 30, 2005, the Company sold AOI and APTV-BVI to a third party with a net book value of $0 at a price of $1.

On July 31, 2006, the Company sold 95% of BAQM shares to a third party and 5% to a shareholder at the net book value as of June 30, 2006.

Consolidation

The consolidated financial statements include the accounts of Parent, BAHA, BHCA, SHCCA, TACM, AOI, APTV-BVI, BAQM and THZA (“the Company”). All inter-company balances and transactions between Parent and subsidiaries have been eliminated in consolidation. The parent Company has a March 31 year end while the subsidiaries have statutory December 31 year ends. The subsidiaries have been audited on March 31 year ends to match the parent.

Reclassification

The financial statements for periods prior to June 30, 2007 have been reclassified to conform to the headings and classifications used in the June 30, 2007 financial statements.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 2 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


		June 30, 2007		March 31, 2007

Accounts receivable - trade	$	7,897,219	$	8,522,545
Allowance for doubtful accounts		(1,002,925)		(473,309)

Accounts receivable, net	$	6,894,294	$	8,049,236

Bad debt expense (recovery) for the three months ended June 30, 2007 and 2006 was $511,867and $(228,352) respectively (See Note 8).

NOTE 3 –

PREPAID EXPENSES

At June 30, 2007, the Company had prepaid expenses of $2,230,823. The Company enters into agreements with vendors to provide advertising services. Usually the agreements cover a period of time, and the vendors require the Company to pay in advance. The prepaid expenses are transferred to cost of sales after the service is provided by the vendors.

NOTE 4 –

PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, at cost, less accumulated depreciation:


		June 30, 2007		March 31, 2007

Office equipment	$	716,880	$	669,966
Vehicles		587,994		685,874
Leasehold improvement		123,478		46,700
Less: accumulated depreciation		(446,477)		(396,150)

	$	981,875	$	1,006,390

Depreciation expense for the three months ended June 30, 2007 and 2006 was $44,979 and $32,483, respectively.

NOTE 5 –

SHORT-TERM LOANS

On October 23, 2006, the Company entered into a six-month bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $387,552 to raise funds for its advertising business. BAHA and its legal representative provide guarantees on the loan. The loan bore a monthly interest at the rate of 0.604% and has been fully repaid on April 10, 2007.

On November 29, 2006, the Company entered into a one-year bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $258,368 to raise funds for its advertising business. The collateral of the loan is the office facility of SHCCA. The loan bears monthly interest at the rate of 0.6825%.

On May 11, 2007, the Company entered into a one-year bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $393,933 to raise funds for its advertising business. BAHA and its legal representative provide guarantees on the loan. The loan bore a monthly interest at the rate of 0.69225%.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 6 –

NOTES PAYABLES (Continued)

Convertible Notes Payable (Continued)

The Company issued a convertible note payable on September 26, 2001 in the amount of $3,000,000 to acquire a film rights license from Sun Television Cybernetworks Holding Ltd. (“Sun”). The film rights license that was acquired from Sun provided the Company with the right to the Film Library, consisting of the master recordings of segmented productions including programs produced by Sun and programs licensed to Sun. In December 2001, the Company renegotiated the terms of the agreement to convert the note payable into 261,838 shares of common stock at an agreed upon price of $11.466 per share.

The Company issued a convertible note payable on October 12, 2001 in the amount of $1,000,000 to acquire non-exclusive access rights for three years to use the production facilities and production equipment of Sun and access to use Sun employees to operate and assist, until such time as the sum of $1,000,000 of relevant charge-out rates has been reached. Sun is also granting airtime on the Sun TV Channel for three years from the commencement of broadcasting (but not commencing later than November 30, 2001). In December 2001, the Company renegotiated the terms of the agreement to convert the note payable into 87,217 shares of common stock at an agreed upon price of $11.466 per share.

The film rights and the non-exclusive access rights have been fully impaired. The terms of the conversion provisions of the agreement are “At any time within 5 years of the date of the Note, the Noteholder may by notice in writing to the principal place of business of the Issuer demand repayment or conversion into shares of common stock in the Issuer having a par value of US$0.01 each of the entire principal amount of the Note. Unless the Issuer and the Noteholder agree in their absolute discretion to repayment of the Note, within 10 business days of receipt of a duly signed Notice, the Issuer shall issue and allot Shares in the name of the Noteholder or its nominee as identified in the Notice.” The two note payables do not provide for interest nor do they provide for any repayment terms other than by conversion into common stock.

The two convertible note payables also contain a contingency to issue additional common shares if the market value stock price is below $11.466 per share when the converted shares are subsequently sold. When the contingency is triggered, the Issuer shall issue such number of additional common shares equal to Z based on the following formula:

(A-B) / Y=Z

Where:

A = the total number of Conversion Shares sold multiplied by the Agreed Price;

B = the total number of Conversion Shares sold multiplied by the Market Value on the day of completion of the sale;

Y= Market Value per share on the day of completion of the sale;

Z= Number of additional shares issued.

Under the formula, Conversion Shares means the shares to be issued to Sun upon exercise by Sun of its conversion rights under the Convertible Notes. Agreed Price means $11.466, the trigger price of the obligation to issue contingent additional common shares when the converted shares are subsequently sold. Market Value means the average reported sale price on the ten trading days prior to the relevant valuation date on which the shares are traded; if no such sale of shares was reported during such period, Market Value shall be the average of the reported ask and bid prices for such period.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 6 – NOTES PAYABLES (Continued)

The Company account for the conversion feature of the convertible note under the guidance of EITF 00-19: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock. The conversion provision expired on December 31, 2006.

Notes Payable

On October 18, 2005 the Company entered into a note payable with Jinan Haichen Real Estate Development Co., Ltd. (“JHRED”) in the amount of $316,993 to acquire office facility for SHCCA. The note should be repaid on a monthly basis no less than $12,507 per month and matured on October 17, 2007. At June 30, 2007 and March 31, 2007, the unpaid note payable to JHRED is $70,908 and $108,514 respectively, which is subjected to the interest based on the current monthly bank rate.

The following is a maturity schedule for the next five years.


Minimum Annual Payments		June 30, 2007		March 31, 2007

Within one year	$	4,070,908	$	4,108,514
After one year but within two years		-		-
	$	4,070,908	$	4,108,514

NOTE 7 – CAPITAL STOCK

Common Stock

On March 26, 2007, the Company effected a reverse stock split of its common stock, par value $0.001 per share, whereby each one thousand shares of Common Stock, either issued and outstanding or held by the Company as treasury stock, immediately prior to the record date was reclassified and changed into one fully-paid and non-assessable share of Common Stock. All fractional shares were rounded up to ensure each shareholder receives at least one post-split share. All references to common stocks have been retrospectively restated.

At June 30, 2007 and March 31, 2007, the Company had 1,623,297 shares issued and 1,613,297 shares outstanding.

Warrants/Options

The Company has no warrants/options issued and outstanding as of June 30, 2007 and March 31, 2007.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 7 – CAPITAL STOCK (Continued)

2001 Stock Plan

During 2001, the Board of Directors adopted a Stock Plan (“Plan”). Under the terms and conditions of the Plan, the board is empowered to grant stock options to employees, consultants, officers, and Board of Directors of the Company. Additionally, the Board will determine at the time of granting the vesting provisions and whether the options will qualify as Incentive Stock Options under Section 422 of the Internal Revenue Code (Section 422 provides certain tax advantages to the employee recipients). The Plan was approved by the shareholders of the Company on September 15, 2001. The total number of shares of common stock available under the Plan may not exceed 2,000,000. At June 30, 2007 and March 31,2007, no options were granted under the Plan.

Development Fund

In 2004, certain shareholders, directors, and officers entered into an agreement to establish a fund wherein 0.65 million shares of common stock would be returned by the shareholders to the Company for cancellation and reissuance as incentives to compensate new officers, directors and other management team members based on the management effort and performance decided by the three shareholders.

On July 28, 2005, one of the shareholders returned 10,000 shares to the Company, which is treated as treasury stock at the face value and the premium as additional paid-in capital. The shares have been valued at a predecessor cost value of $0.001 per share. At present, only 10,000 shares have been returned and no shares have been reissued. When the shares are reissued to management personnel, the Company will record the fair market value of the shares issued as compensation expenses.

NOTE 8 –

BAD DEBT EXPENSES (RECOVERY)

The following is a summary of bad debt expenses (recovery):


		For the Three Months Ended June 30,
		2007		2006
Accounts receivable (Note 2)	$	511,867	$	(228,352)
Receivable from related party (Note 10)		(1,222)		3,313
Other receivables		(172)		171,569
	$	510,473	$	(53,470)

NOTE 9 –

OPERATING LEASES

The Company has entered into two building leases for its offices in Beijing and Ji’nan. The Beijing facility lease expires on August 31, 2007. The Ji’nan facility lease expires on April 30, 2006. The combined lease expense for the three months ended June 30, 2007 and 2006 amounted to $23,431 and $25,360 respectively. The following is a schedule of minimum annual rental payments for the next five years.


Minimum Annual Payments		June 30, 2007		March 31, 2007

Within one year	$	569	$	23,777

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 10 –

RELATED PARTY TRANSACTIONS

Receivables from related parties

The receivables from related parties mainly include advances to staff, and are carried at the expected realizable value. Receivables from related party consisted of the following:


		June 30, 2007		March 31, 2007

Receivables from related parties	$	99,965	$	96,268
Allowance for doubtful accounts		(59,126)		(59,394)

Receivables from related parties, net	$	40,839	$	36,874

Bad debt expense (recovery) for the three months ended June 30, 2007 and 2006 was $(1,222) and $3,313 respectively (See Note 8).

Accounts Payable

The Company has accounts payable to related parties at June 30, 2007 and March 31, 2007 of $78,554 and $70,693 respectively.

Management Compensation

For the three months ended June 30, 2007 and 2006, the Company expensed $15,757 and $14,659 respectively, for services as management compensation.

Accrued Expenses

At June 30, 2007 and March 31, 2007, unpaid bonus due to employees are $120,620 and $123,804 respectively.

NOTE 11 –

COMMITMENTS AND CONTINGENCIES

Operational Agreements

The Company routinely enters into various consulting arrangements as part of their operations primarily related to marketing communication and brand promotion services to customers from industries such as real estate, banking, and cosmetics.

Net Income Guarantee

In connection with the acquisition of “BAHA” by Parent, three shareholders guaranteed that the profit of “BAHA”. should be no less than US$1.5 million for each of the two years ending on the first and second anniversary of the completion date of the acquisition. In the event that “BAHA”. does not generate the guaranteed net income, the shareholders have agreed to contribute an amount equal to the difference.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 11 – COMMITMENTS AND CONTINGENCIES (Continued)

In connection with the acquisition of “BHCA” by Parent, two shareholders guaranteed that the profit of “BHCA” should be no less than RMB$8 million, approximately US$1 million for each of the two years ending on the first and second anniversary of the completion date of the acquisition. In the event that “BHCA” does not generate the guaranteed net income, the shareholders have agreed to contribute an amount equal to the difference.

By the terms of the agreements, the above guarantees expired on July 8, 2006. Due to significant changes in the fair value of ASTV following our acquisition of BAHA and BHCA, we have agreed to abandon the right to enforce the guarantee.

Anti-Dilution Agreement

A shareholder previously received an anti-dilution agreement for a period of one year. For any issuances of common stock by the Company, the shareholder was to receive an issuance of common stock sufficient to maintain a seven percent (7%) ownership in the Company. The Company has made various issuances as part of the anti-dilution agreement. On December 15, 2003 (effective November 4, 2003) the Company extended the agreement indefinitely for as long as the shareholder does not voluntarily sell shares of common stock that causes its percentage ownership to fall below seven percent (7%), or as defined and agreed in cases of major acquisitions by the Company in which all parties may waive their rights under the anti-dilution agreement. In August 2005, the Company finalized general release agreements with the shareholders and a former officers/directors. The agreements state that the Company pays $30,000 and they agreed to cancel the above anti-dilution agreement and also settled accrued salary of $81,571.

The Company entered into a shareholder loan settlement agreement of $30,000 from a shareholder to finalize the general release agreement in July 2005. On August 9, 2005, 1,629 shares of common stock was issued to the shareholder to repay the $30,000 loan and previous $27,027 payables owed according to the shareholder loan settlement agreement at the market price of $35 per share.

NOTE 12 –CONCENTRATIONS

Sales

For the three months ended June 30, 2007, the Company had one significant customer which accounted for 46% of sales.

For the three months ended June 30, 2006, the Company had one significant customer which accounted for 80% of sales.

Cost of Sales

The cost of sales during the three months ended June 30, 2007 and 2006 were $14,796,311 $19,540,806. Cost associated with China Central TV Station (CCTV) accounted for 14% and 7% of the cost of sales respectively.

ASIA PREMIUM TELEVISION GROUP, INC AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

NOTE 12 – CONCENTRATIONS

Accounts Receivable

At June 30, 2007, the Company had one customer which accounted for 55% of the Company’s accounts receivable balances.

At March 31, 2007, the Company had two customers which accounted for 59% and 19% of the Company’s accounts receivable balances respectively.

Foreign Operations

All of the Company’s operating activities are located in the People’s Republic of China.

NOTE 13 – EARNINGS (LOSS) PER SHARE

The following data show the amounts used in computing income per share and the effect on income and the weighted average number of shares of dilutive potential common stock for the three months ended June 30, 2007 and 2006.


		For the Three Months Ended June 30,
		2007		2006
Income/(loss) available to common shareholders (Numerator)	$	(131,825)	$	580,654
Weighted average number of common shares outstanding used in earnings per share during the period (Denominator)		1,613,297		1,613,191
Weighted average number of common shares outstanding used in diluted earnings per share during the period (Denominator)		1,613,297		1,773,191

NOTE 14 – SUBSEQUENT EVENTS

On July 22, 2007, we executed a subscription agreement with certain accredited investors (“Investors”) pursuant to which we agreed to issue 1,000,000 common shares of our common stock and 1,000,000 common stock warrants. The closing of the financing under the subscription agreement remains subject to satisfaction of certain closing conditions.

The aggregate gross proceeds from the sale of our common stock and warrants is $800,000.

Under the Warrant, the investors have the right, for a period of three years from the date of such Warrant, to purchase a total of 1,000,000 shares of the Company’s common stock. The per share exercise price of the Warrant is $1.65.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the accompanying consolidated financial statement and related notes thereto included within this Report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements relate to, among other things, our future plans of operations, business strategy, operating results and financial position and are often, though not always, indicated by words or phrases such as “anticipate,” “estimate,” “plan,” “project,” “outlook,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” and similar words or phrases. These forward-looking statements include statements other than historical information or statements of current condition, but instead represent only our belief regarding future events, many of which by their nature are inherently uncertain and outside of our control. Important factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, those described in the section titled “Risk Factors” previously disclosed in our Annual Report on Form 10-K for the year ended March 31, 2007:

changes in the advertising and marketing services markets in China;

our ability to attract and retain customers;

the financial condition of our customers;

unexpected changes in our margins and certain cost or expense items as a percentage of our net revenues;

our ability to execute key strategies;

actions by our competitors;

our ability to retain and attract key employees;

risks associated with assumptions we make in connection with our critical accounting estimates;

potential adverse accounting related developments;

developments or change in the regulatory and legal environment for advertising and marketing service companies in China; and

other matters discussed in this Report generally.

Consequently, readers of this Report should not rely upon these forward-looking statements as predictions of future events. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements in this Report to reflect any new events or any change in conditions or circumstances. All of the forward-looking statements in this Report are expressly qualified by these cautionary statements.

Overview

We operate as a single segment business and provide advertising, media and marketing solutions to product manufacturers, service providers and other clients located in China. Our comprehensive products and services range from consumer research and brand management to advertisement production, media planning, public relations and direct marketing services. We deliver a comprehensive range of solutions that we believe simplify, improve and maximize the effectiveness of multiple phases of our customers’ marketing campaigns, from the inception of an advertising concept, through design, production and targeted distribution, and ultimately to the measurement of advertising effectiveness. Our customers may employ any one of the services we provide individually or on a combined basis to meet their specific needs.

Our broad range of service offerings can be categorized generally into the following groups:

Media consulting services.

Advertisement production services.

Advertising agent services.

Evaluation services.

During the three months ended June 30, 2007, we had one significant advertising customer that accounted for approximately 46% of our revenues.

Results of Operations

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Total Revenues. Our total revenues for the three months ended June 30, 2007 decreased by 23.92% to US$15.6 million as compared to US$20.5 million for the three months ended June 30, 2006. This was primarily due to significantly decreased revenues from our largest customer, which accounted for 46% of our revenues for the three months ended June 30, 2007.

Cost of Sales. Our cost of sales decreased by 24.28% for the three months ended June 30, 2007 to US$14.8 million as compared to US$19.5 million for the three months ended June 30, 2006. This decrease in our cost of sales corresponded with the 23.92% decrease in our revenues for the three months ended June 30, 2007.

Gross Profit. As a result of the foregoing, our gross profit for the three months ended June 30, 2007 decreased by 16.49% to US$0.79 million as compared to US$0.95 million for the three months ended June 30, 2006. Our gross profit margin slightly increased from 4.64% for the three months ended June 30, 2006 to 5.09% for the three months ended June 30, 2007. This was primarily due to the decrease in low margin sales to our largest customer.

Total Expenses. Our total expenses for the three months ended June 30, 2007 were US$0.9 million, which consisted primarily of bad debt expenses in the amount of US$0.5 million and general and administrative expenses in the amount of US$0.4 million. This represented a 158.35% increase from our total expenses of US$0.4 million for the three months ended June 30, 2006. The significant increase was mainly due to increase of bad debt expense accrued based on ageing analysis.

Income (Loss) Before Income Taxes. Our loss before income taxes was US$ 0.1 million for the three months ended June 30, 2007 compared to an income of US$0.6 million for the three months ended June 30, 2006, representing a decrease of 120.77%.

Net Income (Loss). Our net loss was US$0.1 million for the three months ended June 30, 2007, as compared to income of US$0.6 million for the three months ended June 30, 2006, representing an decrease of 122.70%. This decrease was mainly due to an increase in bad debt expense accrued based on ageing analysis.

Liquidity and Capital Resources

We finance our operations primarily through cash generated from operating activities and a mixture of short and long-term loans.

The following table summarizes our cash flows for the three months ended June 30, 2007 and June 30, 2006:


		Three Months Ended June 30
		2007		2006

Net cash provided by (used in) operating activities	$	2,047,951	$	3,439,982
Net cash provided by (used in) investing activities		119		(183,877)
Net cash provided by (used in) financing activities		(22,807)		(45,706)
Net increase (decrease) in cash and cash equivalents		2,025,263		3,210,399
Cash and cash equivalents (closing balance)	$	7,234,699	$	6,143,097

Our total assets as of June 30, 2007 were US$17.7 million. Our total liabilities at June 30, 2007 were US$17.8 million. Liabilities consisted primarily of US$10.1 million in accounts payable and US$4.1 million in notes and convertible notes payable. See Note 6 to our condensed consolidated financial statements included herein.

Our net cash provided by operating activities was US$2.1 million for the three months ended June 30, 2007, as compared to US$3.4 million for the 3 months ended June 30, 2006. This was mainly due to a decrease in our net income and an increase in our prepaid expenses.

Our net cash provided by investing activities was US$119 for the three months ended June 30, 2007 compared to net cash used in investing activities of US$0.2 million for the three months ended June 30, 2006. This was mainly due to decreased payments for property and equipments and increased receipts from note receivable.

Net cash used by financing activities was US$0.02 million in the three months ended June 30, 2007, as compared to US$0.05 million during the three months ended June 30, 2006. The amount did not change significantly.

Contractual Obligations

On October 23, 2006, we entered into a six-month bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $387,552 to raise funds for our advertising business. BAHA and its legal representative provide guarantees on the loan. The loan bore a monthly interest at the rate of 0.604% and was fully repaid on April 10, 2007.

On November 29, 2006, we entered into a one-year bank loan with Ji’nan Commercial Bank Wenxi Branch in the amount of $258,368 to raise funds for our advertising business. The collateral of the loan is the office facility of SHCCA. The loan bears monthly interest at the rate of 0.6825%.

On October 18, 2005, we entered into an agreement with Ji’nan Haichen Real Estate Development Co., Ltd. (“JHRED”) to borrow US$316,993 to acquire an office facility for SHCCA. Our note payable to JHRED matures on October 17, 2007 and provides for monthly payments in the amount of US$12,507. At June 30, 2007, the outstanding amount on the note payable to JHRED was US$70,908, which bears interest at the current monthly bank rate in China.

At June 30, 2007, we had two convertible notes payable totaling US$4,000,000, however, the conversion provision expired on December 31, 2006. These notes do not provide for payment of interest or any other repayment terms other than by conversion into shares of our common stock.

The following table sets forth information regarding our aggregate payment obligations in future years based on contractual obligations that we had as of June 30, 2007:


	Payments due by period
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
	US$	US$	US$	US$	US$
Capital expenditure	-	-	-	-	-
Operating leases	569	569	-	-	-
Short-term debt	4,070,908	4,070,908	-	-	-
Long-term debt	-	-	-
Total	4,071,477	4,071,477	-	-	-

Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Application of Critical Accounting Policies

Our significant accounting policies are described in Note 1 to our audited consolidated financial statements previously included in our Annual Report on Form 10-K for the year ended March 31, 2006. We prepare our financial statements in conformity with U.S. GAAP, which requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the financial reporting period. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our financial statements as their application places the most significant demands on our management’s judgment.

Revenue Recognition

We rely on SEC Staff Accounting Bulletin: No. 101 “Revenue Recognition in Financial Statements” (“SAB 101”) to recognize our revenue. SAB 101 states that revenue generally is realized or realizable and earned when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed or determinable, and (4) collectibility is reasonably assured.

We provide advertising agent, media consulting and advertising production services. These services can either be (1) bundled together, in one or more combinations, in a single contract, or (2) provided independently pursuant to separate contracts. Revenue recognition is dependent on the type of service provided to the customer: (a) for advertising agent services, we recognize revenue at the end of each month in which the services were provided; (b) for both media consulting and advertising production services, we recognize revenue upon the achievement of particular milestones set forth in the contract.

When two or more services are bundled together in a single contract, the recognition of revenue related to one deliverable is not contingent upon the provision of service or milestone achievement of any subsequent deliverable. We follow EITF 00-21 for recognizing revenues in instances involving the delivery or performance of multiple deliverables.

We may be required to provide a refund to the customer in the event of non-delivery of a service by us if the customer does not otherwise extend the delivery deadline, accept substitute service, or choose another alternative as set forth in the contract. However, we are not required to refund any portions of amounts previously received and for which services have been rendered because subsequent deliverables are not provided. At no point do we recognize any revenue when there is a possibility of having to refund anything to the customer.

We report our revenue on a gross basis under the guidance of EITF 99-19, as (1) we are the primary obligor under contracts with our suppliers and have the risks and rewards of a principal in these transactions; (2) we have latitude in establishing the price for services under our advertising contracts, and the net amount earned by us varies with each contract; (3) we are primarily responsible for the fulfillment of services ordered by the customer pursuant to the contract, including the portion of the services performed by the media supplier with whom we separately contract; and (4) we have discretion in supplier selection.

Income Taxes

We account for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”, as described in Note 8 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2007. We record a valuation allowance to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of their recorded amount, an adjustment to our deferred tax assets would increase our income in the period such determination was made. Likewise, if we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to our deferred tax assets would be charged to our income in the period such determination is made. We record income tax expense on our taxable income using the balance sheet liability method at the effective rate applicable in China in our consolidated statements of operations and comprehensive income.

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risks relate to interest rates and foreign exchange rates.

Interest rates

Our exposure to market risk for changes in interest rates relates primarily to our debt obligations. As of June 30, 2007, we had an outstanding note payable in the amount of US$70,908, which is subject to a variable interest rate. We do not anticipate being exposed to material risks due to changes in market interest rates.

Foreign exchange rates

Substantially all our revenues and expenses are denominated in Renminbi, which are translated to U.S. dollars as our reporting currency for our financial statements. As such, our primary foreign exchange risk is to changes in the value of the Renminbi relative to the U.S. dollar. See “Item 3A. Risk Factors — Fluctuations in the value of the Renminbi could negatively impact our results of operations.” We do not engage in any hedging activities, and as such, we may in the future experience economic loss or gain as a result of any foreign currency exchange rate fluctuations.

The following chart indicates the net foreign exchange gain/loss we recognized in the periods indicated.


	For the Three Months Ended June 30,
	2007	2006	2005(1)

Net foreign exchange gain	$62,705	$3,415	-
Percent of revenue	0.40%	0.01%	-
Percent of profit from income before taxes	(50.40%)	0.56%	-

________________

(1)

The Renminbi remained pegged to the U.S. dollar until July 21, 2005.

ITEM 4

CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Finance Manager, carried out an evaluation of the effectiveness of our “disclosure, controls and procedures” (as defined in Rules 13a-15(3) and 15-d-15(3) of the Exchange Act) as of the end of the period covered by this Report (the “Evaluation Date”). Based upon that evaluation, our Chief Executive Officer and Finance Manager concluded that, as of the Evaluation Date, our disclosure, controls and procedures are effective, providing them with material information relating to our company as required to be disclosed in the reports we file or submit under the Exchange Act on a timely basis.

There were no changes in our internal controls over financial reporting, known to our Chief Executive Officer or Finance Manager, that occurred during the period covered by this report 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

We are not involved in any current, and are not aware of any pending, legal proceedings involving our company or our officers and directors which may have any material impact on our results of operations or financial position.

ITEM 1A

RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended March 31, 2007.

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The aggregate gross proceeds from the sale of our common stock and warrants is $800,000.

The Warrant may be exercised, in whole or in part, by the Holder during the Exercise Period by (i) the presentation and surrender of this Warrant to the Company along with a duly executed Notice of Exercise specifying the number of Warrant Shares to be purchased, and (ii) delivery of payment to the Company of the Exercise Price for the number of Warrant Shares specified in the Notice of Exercise.

Pursuant to the subscription agreement, the Company has provided the Investors with the right to require us to file a registration statement covering the resale of the shares sold under the subscription agreement, plus shares issued pursuant to the exercise of the Warrants. These rights can be exercised by the Investors, individually or as a group, at any time within 3 years on or after July 22.

The subscription agreement also provides the holders of shares sold under the subscription agreement with unlimited "piggy back" registration rights, and further provides that we must pay to the Investors the amount of 657 shares of common stock for each day that the company does not register the common stock as per the terms of the subscription agreement as liquidated damages. The registration obligations of the Company terminate when the holder of shares of common stock no longer holds more than 20% of our outstanding shares of common stock.

Please see Exhibit 4.1 attached hereto for more information on the subscription agreement.

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


Exhibit No.	Title
4.1	Registration Rights Agreement
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Finance Manager pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Finance Manager pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASIA PREMIUM TELEVISION GROUP, INC.

Date: August 14, 2007

By: /s/ Yan Gong

Yan Gong

Chief Executive Officer

Date: August 14, 2007

By: /s/ Hongmei Zhang

Hongmei Zhang

Finance Manager

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: August 14, 2007

By: /s/ Li Li

Li Li

Chairman and Director

Date: August 14, 2007

By: /s/ Yan Gong

Yan Gong

Director

Date: August 14, 2007

By: /s/ Jing Xing

Jing Xing

Director

Date: August 14, 2007

By: /s/ Huiyang Yu

Huiyang Yu

Director

Date: August 14, 2007

By: /s/ Douglas Toth

Douglas Toth

Director