RYVYL Inc. - Quarter Report: 2013 March (Form 10-Q)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(MARK ONE)
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x
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2013
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
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For the transition period from ______________ to ______________
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Commission file number: 001-51554
ASAP EXPO, INC.
(Exact name of small business issuer as specified in its charter)
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Nevada
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22-3962936
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification Number)
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345 S. FIGUEROA ST. SUITE M09 LOS ANGELES, CA
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90071
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(Address of principal executive offices)
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(Zip Code)
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Issuer's telephone number: (213) 625-1200
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Number of shares outstanding of the issuer's classes of common equity, as of May 13, 2013: 8,704,669 Shares of Common Stock (One Class)
Transitional Small Business Disclosure Format: Yes o No x
TABLE OF CONTENTS
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Page
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PART I Financial Information
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Item 1.
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3
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3
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4
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5
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6
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Item 2.
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10
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Item 3.
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13
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PART II Other Information
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Item 1.
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14
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Item 2.
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14
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Item 3.
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14
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Item 4.
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14
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Item 5.
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14
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Item 6.
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14
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15
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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ASAP EXPO, INC.
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CONDENSED BALANCE SHEETS
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March 31,
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December 31,
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2013
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2012
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Unaudited
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ASSETS
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Current Assets
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Cash
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$ | 17,953 | $ | 8,752 | ||||
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Prepaid income taxes
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800 | 800 | ||||||
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Due from affiliated company
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79,721 | 50,787 | ||||||
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Total Current Assets
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98,474 | 60,339 | ||||||
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Total Assets
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$ | 98,474 | $ | 60,339 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts payable and accrued expenses
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$ | 225,321 | $ | 203,563 | ||||
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Total Current Liabilities
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225,321 | 203,563 | ||||||
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Long-term Liabilities
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Convertible note, officers
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1,289,909 | 1,599,418 | ||||||
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Total Long-term Liabilities
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1,289,909 | 1,599,418 | ||||||
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Stockholders' Deficit
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Common stock, $.001 par value, 45,000,000 shares authorized,
8,704,669 shares issued and outstanding at March 31, 2013 and December 31, 2012 |
8,705 | 8,705 | ||||||
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Accumulated deficit
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(1,425,461 | ) | (1,751,347 | ) | ||||
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Total Stockholders' Deficit
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(1,416,756 | ) | (1,742,642 | ) | ||||
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Total Liabilities and Stockholders' Deficit
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$ | 98,474 | $ | 60,339 | ||||
The accompanying notes are an integral part of these financial statements
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ASAP EXPO, INC.
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CONDENSED STATEMENTS OF OPERATIONS
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UNAUDITED
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For the Three Months Ended March 31,
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2013
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2012
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Revenues:
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Consulting fee
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$ | 542,462 | $ | 78,475 | ||||
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Total revenues
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542,462 | 78,475 | ||||||
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Operating expenses:
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Consulting expense
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- | 25,000 | ||||||
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Commission expense
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180,300 | - | ||||||
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General and administrative
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13,321 | 19,953 | ||||||
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Total operating expenses
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193,621 | 44,953 | ||||||
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Income from operations
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348,841 | 33,522 | ||||||
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Other expense
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Interest expense
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(22,955 | ) | (25,716 | ) | ||||
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Total expense
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(22,955 | ) | (25,716 | ) | ||||
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Income before income taxes
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325,886 | 7,806 | ||||||
| Income taxes | - | - | ||||||
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Net Income
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$ | 325,886 | $ | 7,806 | ||||
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Net income per common share
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Basic and diluted
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$ | 0.04 | $ | 0.00 | ||||
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Weighted average common shares outstanding
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Basic and diluted
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8,704,669 | 8,704,669 | ||||||
The accompanying notes are an integral part of these financial statements
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ASAP EXPO, INC.
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CONDENSED STATEMENTS OF CASH FLOWS
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UNAUDITED
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For the Three Months Ended March 31,
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2013
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2012
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Operating Activities:
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Net Income
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$ | 325,886 | $ | 7,806 | ||||
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Adjustments to reconcile net income to net cash
provided by operating activities: |
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Changes in operating assets and liabilities:
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Prepaid expenses and other receivables
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- | 172,771 | ||||||
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Accounts payable and accrued expenses
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21,757 | 25,765 | ||||||
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Net cash provided by operating activities
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347,643 | 206,342 | ||||||
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Investing Activities:
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Advance to affiliated companies
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(28,934 | ) | - | |||||
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Net cash used in investing activities
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(28,934 | ) | - | |||||
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Financing Activities:
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Proceeds from borrowings on convertible note from officers
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44,000 | 51,596 | ||||||
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Repayments of borrowings on convertible note from officers
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(353,508 | ) | (239,327 | ) | ||||
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Net cash used in financing activities
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(309,508 | ) | (187,731 | ) | ||||
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Net increase in cash
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9,201 | 18,611 | ||||||
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Cash, beginning of period
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8,752 | 5,280 | ||||||
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Cash, end of period
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$ | 17,953 | $ | 23,891 | ||||
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Supplemental disclosures of cash flow information:
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Cash paid during the period
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Interest
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$ | - | $ | 8 | ||||
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Income taxes
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$ | - | $ | - | ||||
The accompanying notes are an integral part of these financial statements
ASAP EXPO, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
ASAP Expo, Inc. (“ASAP Expo” or the “Company”) d.b.a. ASAP International Holdings Inc, was incorporated on April 10, 2007 under the laws of the State of Nevada.
ASAP Expo is a holding company that operates real estate, investment banking and consulting for Chinese companies. Our mission is to be the bridge between China and the Western world. Our Global Business Services division has added EB-5 Investment Visa consulting to overseas individuals seeking opportunities in the U.S. Our Investment Banking Services division lists Chinese companies on the public trading markets in the USA or Europe. Our Real Estate division assists with institutional and high net worth individuals with acquisition advisory and asset management.
Prior to July 2011, the investment banking services division was the core business of ASAP Expo. ASAP Expo helped small and medium sized business raise funds and promote business through capital markets.
In July 2011, ASAP Expo transitioned its core business to providing real estate advisory services along with investment banking services for Chinese companies.
BASIS OF PRESENTATION
The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
At March 31, 2013, the Company has an accumulated stockholders' deficit of $1,416,756 mainly resulted from the accumulated deficit of its former parent company that was transferred to the Company upon its spin-off from the parent company, and a lack of profitable operating history. The Company hopes to increase revenues from its real estate business and financial advisory services business. In the absence of significant increases in revenues, the Company intends to fund operations through additional debt and equity financing arrangements. The successful outcome of future activities cannot be determined at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
The Company's success is dependent upon numerous items, certain of which are the successful growth of revenues from its services and its ability to obtain new customers in order to achieve levels of revenues adequate to support the Company's current and future cost structure, for which there is no assurance. Unanticipated problems, expenses, and delays are frequently encountered in establishing and maintaining profitable operations. These include, but are not limited to, competition, the need to develop customer support capabilities and market expertise, technical difficulties, market acceptance and sales and marketing. The failure of the Company to meet any of these conditions could have a materially adverse effect on the Company and may force the Company to reduce or curtail operations. No assurance can be given that the Company can achieve or maintain profitable operations.
The Company believes it will have adequate cash to sustain operations until it achieves sustained profitability. However, until the Company has a history of maintaining revenue levels sufficient to support its operations and repay its working capital deficit, the Company may require additional financing. Sources of financing could include capital infusions, additional equity financing or debt offerings. There can be no assurance that funding will be available on acceptable terms, if at all, or that such fund, if raised, would enable the Company to achieve or sustain profitable operations.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the classification of liabilities that might result from the outcome of these uncertainties.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments consist of cash, prepaid expenses and other receivables, accounts payable and accrued liabilities. The fair value of these financial instruments approximate their carrying amounts reported in the balance sheets due to the short term maturity of these instruments.
USE OF ESTIMATES
The preparation of financial statements in conformity with the GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
REVENUE RECOGNITION
Accounting Standards Codification (‘ASC”) 605, Revenue Recognition which outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with Securities and Exchange Commission. Management believes the Company's revenue recognition policies conform to ASC 605.
Revenues are mainly consulting fees. The Consulting fees are recognized when earned. Consulting fees from investment banking services that subject to refund are recorded as deferred revenue until the project is completed and the fees are no longer refundable.
INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
EARNINGS PER SHARE
A basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of shares outstanding for the year. Dilutive earnings per share include the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Adopted
Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position. Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013. The adoption of this update did not have a material impact on the financial statements.
Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on the financial statements.
Not Adopted
In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our financial statements.
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
NOTE 2 - DUE FROM AFFILIATED COMPANIES
At March 31, 2013 and December 31, 2012, ASAP Expo was owed $79,721 and $50,787 from affiliated companies in which ASAP Expo’s officers are also owners and officers. The advance is non-interest bearing and is payable on demand.
NOTE 3 - CONVERTIBLE NOTE, OFFICERS
On January 1, 2011, the Company obtained a convertible note from Frank Yuan, the Company's Chief Executive Officer (“CEO”), and his family which provides for borrowings up to a maximum of $1,800,000 and is due on demand. The note carries an interest rate of 6.0% per annum and is convertible into the Company's equity securities at a conversion price of $0.04 given a written notice of the contemplated conversion describing in reasonable detail the material terms of such equity securities and of the issue is provided.
The balance of convertible note as of March 31, 2013 was $1,289,909; the accrued and unpaid interest on the note was $224,124 which is included in accounts payable and accrued expenses. The balance of convertible note as of December 31, 2012 was $1,599,418 and the accrued and unpaid interest on the note was $201,170.
NOTE 4 - INCOME TAXES
As of March 31, 2013, the Company had Federal net tax operating loss carry forwards of approximately $291,111 available to offset future taxable income. The carry forwards expire in varying amounts through 2032.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at March 31, 2013 and 2012 are presented below:
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Three Months Ended March 31,
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2013
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2012
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Net operating loss (utilization)
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$
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(110,801
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$
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(2,654
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Reversal of valuation allowance
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110,801
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2,654
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Deferred tax assets
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$
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-
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$
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-
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The Company had historically carried a full deferred tax assets valuation allowance so its balance sheet reported no deferred tax assets. At March 31, 2013 and 2012, the Company reversed deferred tax assets valuation allowance by $110,801 and $2,654, respectively, to reflect the effect of net operating loss actually utilized to reduce the tax liabilities for the respective periods.
As a result of the implementation of ASC 740, we recognized no material adjustment to unrecognized tax benefits. We will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in the statement of operations. We have incurred no interest of penalties in the three months ended March 31 2013, and 2012.
NOTE 5 - SHAREHOLDERS' DEFICIT
Common Stock
At March 31, 2013, the Company has 45,000,000 shares of common stock authorized and 8,704,669 shares issued and outstanding at par value $0.001 per share.
NOTE 6 - COMMITMENT
Starting June 15, 2010, the Company leases office space under a five-year lease term agreement with Shenzhen New World Group. The lease provides for monthly lease payments of $0.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report for the period ended March 31, 2013. This quarterly report contains certain forward-looking statements and the Company's future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.
OVERVIEW
ASAP Expo is a holding company that operates real estate, provides investment banking and consulting services for Chinese companies. The mission is to be the bridge between China and the Western world. The Company’s Global Business Services division has added EB-5 Investment Visa consulting to overseas individuals seeking opportunities in the U.S. The Company’s Investment Banking Services division lists Chinese companies on the public trading markets in the USA or Europe. The Company’s Real Estate division assists with institutional and high net worth individuals with acquisition advisory and asset management.
ASAP Expo is fully committed to the real estate business direction. It focuses on consulting with Chinese entities to purchase U.S. real estate, mainly commercial properties because of the historically low valuations. ASAP Expo has concluded several transactions within the last year, including advisory services for the purchase of the Downtown Los Angeles Marriott, Universal Sheraton, Fullerton Heritage Inn, and representing the buyer of Holiday Inn Anaheim.
The Investment Banking Services division helps Chinese companies list on the public trading markets in the USA or Europe. In 2008, ASAP Expo entered the Germany Frankfurt Exchange and established its presence in the Deutsche Boerse Open Market. The products we created are capable of providing our clients, especially small and median size companies, the opportunity to access international capital markets. Our mission is to provide our clients, including start ups and early stage developments with the services that will assist them in the “first step” in becoming a public company.
RESULTS OF OPERATIONS
Revenues
The Company earned consulting fee for providing advisory services in real estate acquisition deals. During the three months ended March 31, 2013, the Company earned consulting fee of $542,462, as compared to a consulting fee of $78,475 for the same period last year.
Operating Expenses
For the three months ended March 31, 2013, the Company incurred commission expense of $180,300 while providing advisory services in real estate acquisition deals as compared to $25,000 consulting expense for providing the same service in the same period last year.
General and administrative expenses consist primarily of administrative personnel costs, facilities expenses, and professional fee expenses.
General and administrative expenses decreased by $6,632 or 33.2% to $13,321 for the three months ended March 31, 2013, as compared to $19,953 for the same period last year. The decrease in general and administrative expenses was primarily due to the lower staff expenses, licenses and permits expense, automobile expense and professional fees.
Interest Expense
Interest expense decreased to $22,955 during the three months ended March 31, 2013 from $25,716 for the same period last year due to the lower average convertible note balances.
Net Income
The Company recorded a net income of $325,886 for the three months ended March 31, 2013, as compared to a net income of $7,806 for the same period last year. The increase in net income was mainly due to the higher consulting fee, lower general and administrative expenses, lower interest expense, offset by high commission expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital deficit was $126,847 at March 31, 2013, as compared to a working capital deficit of $143,224 at December 31, 2012. During the next twelve months, ASAP Expo will focus on its real estate transactions and global trading services to generate additional revenue. With the net revenue from its services, and continuing support from its major shareholders to provide a convertible note, management believes ASAP Expo will have enough net working capital to sustain its business for another 12 months.
The Company has a convertible note (the "Yuan Note") from Frank Yuan and his family, which is due on demand, and provides for borrowings up to a maximum total of $1,800,000. The Yuan Note carries an interest rate of 6.0% per annum and is convertible into the Company's equity securities at a conversion price of $0.04 given a written notice of the contemplated conversion describing in reasonable detail the material terms of such equity securities and of the issue is provided. The total balance as of March 31, 2013 was $1,289,910, and the accrued and unpaid interest was $224,124.
The forecast of the period of time through which ASAP Expo’s financial resources will be adequate to support its operations is a forward-looking statement that involves risks and uncertainties. ASAP Expo’s actual funding requirements may differ materially as a result of a number of factors, including unknown expenses associated with the cost of providing investment banking, management consulting and global trading services.
ASAP Expo has no commitments to make capital expenditures for the fiscal year ending December 31, 2013.
Over the next two to five years, ASAP Expo plans to utilize a combination of internally generated funds from operations and potential debt and equity financing to fund its long-term growth.
The Report of the Company's Independent Registered Public Accounting Firm on our December 31, 2012 financial statements includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
At the present time, we have received no commitments for the funds required for our planned capital investments. Obtaining those funds, if we can do so, will require that we issue substantial amounts of equity securities or incur significant debts. We believe that the expected return on those investments will justify the cost. However, our plan, if accomplished, will significantly increase the risks to our liquidity.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the our financial statements and the accompanying notes. The amounts of assets and liabilities reported on our balance sheet and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, stock based compensation and the valuation of deferred taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:
Revenue Recognition
Accounting Standards Codification (“ASC”) 605, "Revenue Recognition" outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with Securities and Exchange Commission. Management believes the Company's revenue recognition policies conform to ASC 605.
Revenues are mainly consulting fees. The Consulting fees are recognized when earned. Consulting fees subject to refund are recorded as deferred revenue until the project is completed and the fees are no longer refundable.
Income Taxes
The Company accounts for income taxes under ASC 740, "Income Taxes." Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Management provides a valuation allowance for significant deferred tax assets when it is more likely than not that such asset will not be recovered.
ITEM 3. CONTROLS AND PROCEDURES
Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures include components of our internal control over financial reporting and, as such, are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance that the control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met (see the section below in this Item 3 entitled Limitations on the Effectiveness of Internal Controls).
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) that occurred during the period covered by this Report, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management currently is not aware of any legal matters or pending litigation that would have a significant effect on the Company’s financial statements as of March 31, 2013.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
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31.1
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32.1
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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* Furnished electronically with this filing
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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ASAP EXPO, INC.
(Registrant)
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Date: May 15, 2013
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By:
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/s/ Frank S. Yuan
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Frank S. Yuan,
Chairman, Chief Executive Officer
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