10-K 1 aspi10k63010.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2010 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 000-21477 ASPI, INC. (EXACT NAME OF REGISTRANT SPECIFIED IN ITS CHARTER) DELAWARE 27-0514566 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 7609 RALSTON ROAD ARVADA, COLORADO 80002 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (303) 422-8127 -------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Securities registered pursuant to Section 12(b) of the Act: NONE Securities to be registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.01 PAR VALUE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes |_| No |X| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X| 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |_| 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 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 |_| Smaller reporting company |X| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| The aggregate market value of the voting common stock held by non-affiliates of the Registrant on October 8, 2010 was approximately $154,333 based upon the reported closing sale price of such shares on the Over the Counter Bulletin Board for that date. As of October 8, 2010, there were 73,879,655 shares outstanding of which 771,665 shares were held by non-affiliates.
TABLE OF CONTENTS DOUBLE CHECK ITEM DESCRIPTION PAGE Part I Item 1. Business 1 Item 1A. Risk Factors 5 Item 1B. Unresolved Staff Comments 8 Item 2. Description of Properties 8 Item 3. Legal Proceedings 9 Item 4. Removed and Reserved 9 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases for Equity Securities 9 Item 6. Selected Financial Data 10 Item 7. Management's Discussion and Analysis of Financial Condition 10 and Results of Operations Item 7A. Quantative and Qualiative Disclosures About Market Risk 14 Item 8. Financial Statements and Supplementary Data 14 Item 9. Changes in and Disagreements with Accountants on Accounting and 14 Financial Disclosure Item 9A. Controls and Procedures 15 Item 9B. Other Information 15 Part III Item 10. Directors, Executive Officers and Corporate Governance 16 Item11. Executive Compensation 18 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 19 Item 13. Certain Relationships and Related Transactions and Director Independence 20 Item 14. Principal Accountant Fees and Services 21 Item 15. Exhibits and Financial Statement Schedules 22
FORWARD-LOOKING STATEMENTS In addition to historical information, some of the information presented in this Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the"Reform Act"). Although ASPI, Inc. ("ASPI" or the "Company," which may also be referred to as "we," "us," or "our") believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations: there can be no assurance that actual results will not differ materially from our expectations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including but not limited to, our ability to reach satisfactorily negotiated settlements with our outstanding creditors, raise debt and, or, equity to fund negotiated settlements with our creditors and to meet our ongoing operating expenses and merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. Cautionary statements regarding the risks, uncertainties and other factors associated with these forward-looking statements are discussed under "Risk Factors" in this Form 10-K. You are urged to carefully consider these factors, as well as other information contained in this Form 10-K and in our other periodic reports and documents filed with the SEC. PART I ITEM 1. BUSINESS INTRODUCTION Reorganization into a Holding Company Structure ASPI, Inc. ("ASPI") and A08 Holdings, Inc. ("A08") were incorporated on September 29, 2008, in the state of Delaware, as Delaware corporations to be subsidiary companies of Aspeon, Inc. ("Aspeon") for the purpose of performing a holding company reorganization with Aspeon. On May 21, 2009, pursuant to the Delaware Holding Company formation statute, Delaware General Corporation Law ("DGCL") Section 251(g), Aspeon entered into an Agreement and Plan of Merger and Reorganization into a Holding Company ("the Reorganization") with two of its wholly owned subsidiary companies, ASPI and A08. The Reorganization provided for the merger of Aspeon with, and into, A08, with A08 being the surviving corporation in the merger. At the same time as the merger took place, the shareholders of Aspeon were converted, under the terms of the Reorganization, to shareholders of ASPI on a one for one basis. As a consequence of the Reorganization, ASPI became the parent holding company with its wholly owned subsidiary company, A08, the surviving company of the merger with Aspeon. The Reorganization has been accounted for to reflect the fact that both Aspeon and ASPI were under common control at the date of the Reorganization, similar to a reverse acquisition of Aspeon and its subsidiary companies by ASPI. On June 26, 2009, Mr. David J. Cutler, a former officer and director of the Company, and an entity controlled by Mr. Cutler, sold 3,108,000 shares of ASPI common stock held by him and the entity, which constituted 80.11% of the outstanding shares of ASPI, at that time, to Top Growth Holdings Group, Inc., a British Virgin Island corporation beneficially owned by Ms. Look, a current officer and director of the Company. 1 On June 30, 2009, ASPI sold 100% of the issued share capital of its subsidiary, A08and all of A08's subsidiary companies, to an unrelated third party for $100. ASPI recognized a gain of $2,519,907 on this sale of its subsidiary companies. Following this sale, ASPI had $100 of assets, no outstanding liabilities, stockholders' equity of $100 and no operating business or other source of income. ASPI's common stock is publicly traded on the Over-the-Counter Bulletin Board under the symbol "ASZP." In November 2009, Mr. Cutler, resigned as the Chief Executive Officer, Chief Financial Officer and a director of ASPI. At that time, Ms. Look was appointed the Chief Executive Officer, Chief Financial Officer and a director of the Company. Mr. Green and Ms. Kampmann resigned as directors and Mr. Tong and Mr. Yeung were appointed to the Board of Directors of the Company. Prestige Prime Office, Ltd. Acquisition Effective June 30, 2010, ASPI entered into an Acquisition Agreement with Prestige Prime Office, Ltd. Under the Agreement, ASPI acquired all of the issued and outstanding common stock of Prestige Prime Office, LTD. ("Prestige"), a Hong Kong Special Administrative Region Corporation. As a result of the acquisition, Prestige became a wholly-owned subsidiary of ASPI. In exchange for $50,000, cash, and 60,000,000 restricted shares of the common stock of ASPI, the Company acquired 100% all of the 4,000,000 issued and outstanding shares of common stock of Prestige. Prestige had one sole shareholder, Mr. Yeung Cheuk Hung, as a result of the acquisition Mr. Yeung became the majority shareholder of ASPI holding approximately 81.21% of the issued and outstanding common stock of ASPI. Prestige is a serviced office provider in the Far East. Prestige intends to provide office space that is fully furnished, equipped and staffed, located at premier addresses in central business districts with convenient access to airports or public transportation. Services will include advanced communication system, network access, updated IT and world-class administrative support, as well as a full menu of business services and facilities, such as meeting rooms and video conferencing. As a result of the acquisition, the Company is no longer considered to be a shell company, as defined in Rule 12b-2 of the Exchange Act. Mega Action Limited During the year ended June 30, 2010, the Company incorporated a subsidiary, Mega Action Limited, a BVI corporation (the "Subsidiary"). Two of the Company's directors, Yuen Ling Look and Siu Lun Tong, act as directors of Mega Action Limited. In consideration of $1.00, Mega Action Limited issued the Company one share of Mega Action Limited ("Mega"). There is only one share of Mega share issued and outstanding. Mega is a wholly owned Subsidiary of the Company. Mega Action will operate as the eastern operations management division of the Company. BUSINESS ASPI's current goal is to be a serviced office provider in the Far East through and starting with its wholly-owned subsidiary, Prestige Prime Office Ltd. in Hong Kong. 2 The office space provided is fully furnished, equipped and staffed, located at premier addresses in central business districts with convenient access to airports or public transportation. Services include advanced communication system, network access, updated IT and world-class administrative support, as well as a full menu of business services and facilities, such as meeting rooms and video conferencing. Prestige intends to provide services that will support the growing trend of mobile and at home working. Supporting workers at home and on the road with services such as Virtual Office and Virtual PA, providing dedicated business addresses as their business base, as well as mail and call handling services. Executives across business sectors, geographic locations, and from every size organization, seek to more effectively manage business risk, maximize their financial resources, and increase their flexibility to accommodate growth and the dynamic changes in the market. Companies of all sizes can use the Company's solutions to reduce costs and remove the burden of property ownership and management, but at the same time have a workplace to suit whenever and wherever they want to work. Market Opportunity Cost effective Businesses are increasingly looking at office space requirements as a strategic component of their business plan. Through serviced office space, clients are free to run their business without the financial or management burden that comes with traditional office rental. Prestige's provides offices that are equipped and ready for use. All the clients need to do is to is move in. Clients are not required to shop for and purchase office equipment and furniture, make telecommunications arrangements, etc. Flexibility Workplace outsourcing enables companies to seize new market opportunities because the office infrastructure is already in place, which is particularly beneficial when businesses are setting up offices in emerging markets. The flexible rental length, from 1 week up to 1 year, minimizes the risk and complications of exploring a new market or business opportunities. Gateway Attributing to Hong Kong's location and monetary system, companies set up in Hong Kong are provided a gateway to develop business in the Mainland China. Because of this advantage, it's expected that more and more companies will locate businesses in Hong Kong. Prestige is able to provide flexibility and efficiency to companies which are new to the region. Company rightsizing The current economic conditions have led to a chain reaction of company downsizing in order to reduce cost. Most of the companies are left with a minimum number of staff. These companies need an office space that can flexibly fit their company size and budget. While the traditional rental office creates 3 abundant space and heavy capital commitments, compromising companies' liquidity, serviced office on the other hand provides an optimum office space at a minimized cost, and the flexibility for company downsizing or company expansion. Full support In a serviced office, clients don't need to physically own, install, hire or manage any aspect of a traditional office environment. Clients only pay for what is needed, as it is used. For companies serious about time and cash flow, the serviced office concept provides the ability to focus on strategy and operations. Prestige provides a range of Workstyle Solutions, providing customers with the offices services products they require according to whether they are predominantly in the office, work from home or are regular travelers. Competition There are approximately 50 serviced office providers in Hong Kong offering a varying scale of services. Most of the centers' occupancy are 80% under the recent economy and some of the providers are expanding to meet the increasing demand, namely SBC, set up in 1995, and Jumpstart, set up in 2002, which have 8 and 6 centers, respectively, in Hong Kong. Prestige's Competitive Advantage o Exclusive location and rate The business center is located at the central business area and Prestige can offer clients a competitive rate because of the rental agreement with the landlord. The rate is expected to be 10%-15% lower than the market rate. o Professional support From setting up an office, to holding a meeting or doing any administrative chores, Prestige's staff makes having and running a workplace simple. To meet new business needs, there is constant upgrade of employees' skills as technology and new standards evolve. o Flexibility Prestige offers a wide choice of contract periods. And the clients can, without binding, upgrade the room or transfer the office to any of our locations, without penalty. o Cost effective Prestige helps set up an office at the lowest cost possible. Reserving facilities and office support services at short notice and using them with 10-minute increments so as to avoid the additional charges inherent of an hourly system. Clients only pay for what they use. o Smart technology IP phone and Internet-based offices allow clients to work remotely, reserve facilities and services on the Internet, confirm invoice details online etc. There are regular update and upgrade of the systems to meet the ever changing needs and provide a convenient and user-friendly platform for the customers. o Ongoing development Prestige works to be able to make continuous investment to improve efficiency and provide clients enhanced services and innovative technology at reasonable rates. 4 BUSINESS DEVELOPMENT & FUTURE PROSPECTS Phase-in Approach The Company has a full plan of development that is put into place through different phases. A phase-in approach allows the Company to stabilize cash flow. Also, the experience from running the first center will provide the Company with the necessary experiences that can be used to improve quality and lower costs as it opens new centers. The first center The first center is composed of two units at Silvercord, No.30 Canton Road, Tsimshatsui, which is a premier commercial building in Hong Kong. The center is on one floor and occupies approximately 5,000 square feet. Expansion The Company intends to explore the market for more opportunities. The Company is looking to grow its network in major commercial zones in key cities, expand into new markets, and to consolidate and develop our position as a serviced office provider around the globe. The first-stage expansion plan will focus on the local market in Hong Kong. New business centers will be opened in dynamic business areas and the most prestigious buildings, offering clients' business a professional corporate address. INTELLECTUAL PROPERTY We do not hold any patents or patent applications. EMPLOYEES As of June 30, 2010, we had six employees, employed solely by our wholly-owned subsidiary, Prestige. The Company's officers do not have employment agreements at this time. We feel that are relations with our employees is in good standing. ITEM 1A. RISK FACTORS You should be aware that there are various risks associated with our business, and us, including the ones discussed below. You should carefully consider these risk factors, as well as the other information contained in this Form 10-K, in evaluating us and our business. OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES We have minimal sources of income at this time and no existing cash balances that are adequate to meet our ongoing operating expenses. In the short term, unless we are able to raise additional debt and/or, equity we shall be unable to meet our ongoing operating expenses. No assurances can be given that we will be successful in generating revenues or reaching or maintaining profitable operations. 5 BECAUSE INSIDERS CONTROL OUR ACTIVITIES, THAT MAY CAUSE US TO ACT IN A MANNER THAT IS MOST BENEFICIAL TO THEM AND NOT TO OUTSIDE SHAREHOLDERS WHICH COULD CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY Mr. Yeung Cheuk Hung owns approximately 81% of our issued and outstanding common stock. As a result, Mr. Yeung effectively controls all matters requiring stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transaction. These insiders also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably. OUR DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE RESOLVED FAVORABLY TO US. Certain conflicts of interest may exist between our directors and us. Our Directors have other business interests to which they devote their attention, and may be expected to continue to do so although management time should be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through exercise of such judgment as is consistent with fiduciary duties to us. LOSS OF CONTROL BY OUR STOCKHOLDERS MAY OCCUR UPON ISSUANCE OF ADDITIONAL SHARES. We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of our voting power and equity. The result of such an issuance would be those new stockholders and management would control us, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of us by our current stockholders. TERMINATIONS COULD REDUCE OUR REVENUES Our success depends upon the occupancy levels, rental income and operating expenses of our properties and our company. We may be unable to fill office space at 100% or we may lose clients as companies expand in size and no longer need a serviced office. These events and others could cause us to recognize less revenue. RISING EXPENSES AT BOTH THE PROPERTY AND THE COMPANY LEVEL COULD REDUCE OUR CASH FLOWS. Our serviced offices will be subject to operating risks common to offices in general, any or all of which may reduce revenues and cash flows. If any property is not substantially occupied or if services are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds with respect to operating expenses. The serviced officers are subject to increases in utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses. We could be required to pay some or all of those costs which would reduce our income and cash available for expansion plans. 6 THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY HAVE AN EFFECT ON THE TRADABILITY OF OUR SECURITIES. Our securities are currently listed on the Over the Counter Bulletin Board and the Pink Sheets. Our shares are subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. For purposes of the rule, the phrase "accredited investors" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore. In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities. The rules may further affect the ability of owners of Shares to sell our securities in any market that might develop for them. Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. OUR STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES. The shares of our common stock may be thinly-traded on the OTC Bulletin Board, meaning that the number of persons interested in purchasing our shares of common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of our shares of common stock until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares of common stock is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on Securities price. We cannot give you any assurance that a broader or more active public trading market for our shares of Common Stock will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give investors no assurance that they 7 will be able to sell their shares of common stock at or near ask prices or at all if you need money or otherwise desire to liquidate your shares of common stock of our Company. RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE. All of the outstanding shares of common stock held by our present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted Shares, these Shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. We are registering all of our outstanding Shares so officers, directors and affiliates will be able to sell their Shares if this Registration Statement becomes effective. Rule 144 provides in essence that a person who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of Shares that does not exceed the greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a nonaffiliate after the owner has held the restricted securities for a period of six months. A sale under Rule 144 or under any other exemption from the Act, may have a depressive effect upon the price of the common stock in any market that may develop. THE PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE Having obtained a listing on the over the counter bulletin board it is likely that our common stock will be subject to price volatility, low volumes of trades and large spreads in bid and ask prices quoted by market makers. Due to the low volume of shares traded on any trading day, persons buying or selling in relatively small quantities may easily influence prices of our common stock. This low volume of trades could also cause the price of our stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. If high spreads between the bid and ask prices of our common stock exist at the time of a purchase, the stock would have to appreciate substantially on a relative percentage basis for an investor to recoup their investment. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock. No assurance can be given that an active market in our common stock will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all. WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK We do not anticipate paying any cash dividends on our common stock in the foreseeable future. ITEM 1B. UNRESOLVED STAFF COMMENTS None ITEM 2. DESCRIPTION OF PROPERTIES Our mailing address is 7609 Ralston Road, Arvada, Colorado. Our wholly-owned subsidiary, Prestige operates from Silvercord, No.30 Canton Road, Tsimshatsui, which is a premier commercial building in Hong Kong. The center is located on one floor and occupies approximately 5,000 square feet. We pay an annual rental rate of $213,780. 8 ITEM 3. LEGAL PROCEEDINGS To the best of our knowledge and belief, there is no pending legal action against the Company. ITEM 4. REMOVED AND RESERVED. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The following table sets forth the range of high and low sales prices for the Company's common stock for each of the fiscal quarters for the past two years as reported on the OTC Bulletin Board. These prices represent inter-dealer prices without adjustments for mark-up, mark-down, or commission and do not necessarily reflect actual transactions. On January 13, 2009, the reverse split of the Company's common stock on a fifteen for one basis became effective and our trading symbol was changed to "ASPO." Following the Reorganization effective May 29, 2009, our trading symbol was changed to "ASZP." High Low Year Ended June 30, 2010: First quarter $0.18 $0.05 Second quarter 0.25 0.012 Third quarter 0.25 0.05 Fourth quarter 0.20 0.20 Year Ended June 30, 2009: First quarter $0.45 $0.105 Second quarter 0.27 0.045 Third quarter 0.30 0.03 Fourth quarter 0.10 0.02 Holders. As of June 30, 2010, there were approximately 130 holders of record of the common stock. We believe that we have approximately 2,000 beneficial owners of our common stock. In many instances, a registered stockholder is a broker or other entity holding shares in street name for one or more customers who beneficially own the shares. Our transfer agent is Mountain Share Transfer, Inc., 1625 Abilene Drive, Broomfield, Colorado, 80020. Mountain Share Transfer's telephone number is 303-460-1149. Dividends. We have not paid or declared cash distributions or dividends on our common stock and do not intend to pay cash dividends in the foreseeable future. Future cash dividends will be determined by our board of directors based upon our earnings, financial condition, capital requirements and other relevant factors. 9 Recent Sales of Unregistered Securities We made the following unregistered sales of its securities from July 1, 2009 through June 30, 2010.
Date of Issuance Title of Securities Number of Shares Consideration Holder ---------------- ------------------- ---------------- ------------- ------ 5/6/10 Common Stock 10,000,000 $100,000 Top Growth Holdings Group 6/30/10 Common Stock 60,000,000 4,000,000 shares of Yeung Cheuk Hung Prestige
Exemption From Registration Claimed All of the sales by us of our unregistered securities were made in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"). The entity and individuals listed above that purchased the unregistered securities were existing shareholders, known to us and our management, through pre-existing business relationships, as a long standing business associate. The entity was provided access to all material information, which it requested, and all information necessary to verify such information and was afforded access to our management in connection with the purchases. The purchaser of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition. ITEM 6. SELECTED FINANCIAL AND OPERATING DATA As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements. 10 The independent registered public accounting firm's report on the Company's financial statements as of June 30, 2010, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern. PLAN OF OPERATION ASPI's strategy is to be a serviced office provider in the Far East through its wholly-owned subsidiary, Prestige Prime Office Ltd. in Hong Kong. The office space provided is fully furnished, equipped and staffed, located at premier addresses in central business districts with convenient access to airports or public transportation. Services include advanced communication system, network access, updated IT and world-class administrative support, as well as a full menu of business services and facilities, such as meeting rooms and video conferencing. Prestige intends to provide services that will support the growing trend of mobile and at home working. Supporting workers at home and on the road with services such as Virtual Office and Virtual PA, providing dedicated business addresses as their business base, as well as mail and call handling services. The Company budget for operations in next year is planned as follows: Minimum Maximum ---------------- ----------------- Purchase of existing business centers $-- $5,000,000 Expand more centers in Hong Kong $250,000 $3,000,000 Setup centers in China $500,000 $5,000,000 Setup centers in South East Asia $-- $5,000,000 Working capital for running centers $800,000 $5,000,000 Marketing $450,000 $7,000,000 ---------------- ----------------- $2,000,000 $30,000,000 The Company reserves the right to change any or all of the budget categories in the execution of its business attempts without purchaser approval. None of the line items is to be considered fixed or unchangeable in the budget. The Company will need substantial additional capital to support its budget. The Company has had minimal revenues. The Company has no committed source for any funds as of date hereof. In the event funds cannot be raised when needed, the Company may not be able to carry out its business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties. The Company may borrow money to finance its future operations, although it does not currently contemplate doing so. Any such borrowing will increase the risk of loss to the investor in the event the Company is unsuccessful in repaying such loans. RESULTS OF OPERATIONS THE FISCAL YEAR ENDED JUNE 30, 2010 COMPARED TO THE FISCAL YEAR ENDED JUNE 30, 2009 11 Revenue During the year ended June 30, 2010, we recognized $24,920 in revenue from the serviced office operations of our wholly-owned subsidiary, Prestige. The cost of such revenues was $54,126. During the year ended June 30, 2009, we did not recognize any revenues from our operations. Operational (Income) Expenses During the year ended June 30, 2010, we recognized operational expenses of $473,739 compared to operational income of $5,831,206 for the year ended June 30, 2009. Operational expenses activities were as follows:
Year Ended June Year Ended June Increase or 30, 2010 30, 2009 (Decrease) ------------------ ------------------ ------------------- General and Administrative $ 423,667 $ 150,198 $273,469 Depreciation 50,072 - 50,072 Gain on Settlement of Debt - 61,992 (61,992) Gain on Statue Barred Liabilities - 3,339,505 (3,339,505) Gain on Sale of Subsidiary Companies - 2,519,907 (2,519,907)
The $273,469 increase in general and administrative expense was a result of the Company's acquisition activity during the year ended June 30, 2010. Such activity resulted in increase legal and accounting expenses and salary expenses in the Company's wholly-owned subsidiary, Prestige. During the year ended June 30, 2009, we issued 2,376,324 shares of restricted common stock, valued at $392,974 ($0.17 per share), to David Cutler, the Company's then President and a director, and a corporation controlled by Mr. Cutler, in full settlement of the Company's debts to them. As a result of the transaction, we recognized a gain of $61,992 on the settlement of this liability. During the year ended June 30, 2009, we recognized a gain on statute barred liabilities of $3,399,505. During the year ended June 30, 2009, outstanding liabilities, which had been incurred more than six years ago, were statute barred under the state laws of Massachusetts and we recognized a gain on these statute barred liabilities of $3,399,505. During the year ended June 30, 2009, we recognized a gain on sale of subsidiary companies of $2,519,907. Provision for Income Taxes No provision for income taxes was required in the fiscal years ended June 30, 2009 and 2008 as we had sufficient carried forward tax losses to offset the profit arising in these periods. Net (Loss) Income During the year ended June 30, 2010, we recognized a net loss of $502,974 compared to a net income of $5,813,638. The increase in net losses was a result of the Company's acquisition of its wholly-owned subsidiary, Prestige and its increased operational activities. 12 LIQUIDITY AND CAPITAL As of June 30, 2010, we had total current assets of $86,659, consisting of $36,468 in cash, customer deposits of $41,852 and prepaid expenses and other current assets of $11,339. At June 30, 2010, we had total liabilities of $335,220, all current. Total current liabilities consisted of accounts payable of $24,233, accrued liabilities of $127,218, prepayments from clients of $16,707 and related parties advances of $167,062. The Company has a working capital deficit of $245,561. Going Concern In our Annual Reports on Form 10-K for the fiscal years ended June 30, 2010 and 2009, the Report of the Independent Registered Public Accounting Firm included an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Our financial statements for the year ended June 30, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We reported an accumulated deficit of $502,974 and a working capital deficit of $245,561 as of June 30, 2010. Consequently, we are now dependent on raising additional equity and /or, debt to meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and, or, debt that we will need to fund our ongoing operating expenses. For the year ended June 30, 2010, net cash used in operations was $337,986, compared to $161,624 for the year ended June 30, 2009, an increase of $176,362. During the year ended June 30, 2010, the net loss of $502,974 was reconciled for the non-cash item of depreciation of $49,921. During the year ended June 30, 2009, net income of $5,813,638, was adjusted for non-cash items of $5,960,780 for non-cash items, including $12,375 in stock issued to consultants, $8,250 in stock issued to directors, a total gains of $5,918,405, as discussed above. During the year ended June 30, 2010, we used $407,909 in investing activities, including the purchase of $357,909 in fixed assets by our wholly-owned subsidiary, Prestige and $50,000 cash in the purchase of our wholly-owned subsidiary, Prestige. During the year ended June 30, 2009, we derived $100 from the sale of our subsidiary companies. During the year ended June 30, 2010, we received $780,903 from our financing activities. During the fiscal year ended June 30, 2009, we received $161,527 from financing activities. During the year ended June 30, 2010, Top Growth Holdings Group, Inc., an affiliate and entity of which Ms. Look, an officer and director of the Company, advanced $2,996 to the Company. Such funds are due on demand. During the year ended June 30, 2010, Mr. Yeung Cheuk Hung, the manager of Prestige and the majority shareholder of the Company, has advanced funds at June 30, 2010 of $163,745 to support the operations of Prestige. Such funds are due on demand. During the year ended June 30, 2010, Ms. Look, an officer and director of the Company and the manager of Mega, advanced funds of $321 to Mega to support operations. Such funds are due on demand. During the year ended June 30, 2010, the Company did issue a Subscription Receivable for $100,000 to issue 10,000,000 shares at $0.01 per share to Top Growth Holdings Group, Inc. of which Ms. Look, an officer and director of the Company is a beneficial owner. Prior to year end the Receivable was paid for and the Company issued 10,000,000 shares of its restricted common stock. 13 EFFECTS OF INFLATION Although we cannot accurately anticipate the effect of inflation on our operations, we do not believe that inflation has had, or is likely in the future to have, a material effect on our results or financial condition. CRITICAL ACCOUNTING POLICIES Foreign Currency Translation The financial statements of ASPI's wholly-owned subsidiaries, Prestige and Mega are measured using the local currency (the Hong Kong Dollar (HK$)) as the functional currency. Assets and liabilities of Prestige and Mega are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the period. The resulting cumulative translation adjustments have been recorded as a component of comprehensive income (loss), included as a separate item in shareholders' equity. The Company is exposed to movements in foreign currency exchange rates. In addition, the Company is subject to risks including adverse developments in the foreign political and economic environment, trade barriers, managing foreign operations and potentially adverse tax consequences. There can be no assurance that any of these factors will not have a material negative impact on the Company's financial condition or results of operations in the future. Revenue Recognition The Company recognizes revenue when it is earned and expenses are recognized when they occur. Stock-Based Compensation Beginning January 1, 2006, the Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of the effective date and are subsequently modified. ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our financial statements and supplementary data are included herein commencing on page 32. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE We have not had any disagreements with our auditors. 14 ITEM 9A. CONTROLS and PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES We maintain a system of disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) that is designed to provide reasonable assurance that information that is required to be disclosed is accumulated and communicated to management timely. As required by SEC Rule 15d-15(b), our Chief Executive Officer and our Chief Financial Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be disclosed in the our periodic filings with the SEC. Management's Annual Report On Internal Control Over Financial Reporting Our management, including the Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: o Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; o Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and o Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2010. Based on this assessment, management believes that as of June 30, 2010, our internal control over financial reporting is effective based on those criteria. 15 This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC to provide only management's report in this annual report. Changes in Internal Control Over Financial Reporting During our most recent fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS AND EXECUTIVE OFFICERS As of June 30, 2010, our directors and officers were: Name Age Position Yuen Ling Look 42 President, CEO, CFO, and Director Siu Fong Kelly Yeung 40 Director Siu Lun Tong 47 Director On November 2, 2009, Mr. David Cutler resigned as the Chief Executive Officer, Chief Financial Officer and Director of the Company. On November 2, 2009, Mr. Redgie Green and Ms. Kristi Kampmann resigned as directors of the Company. YUEN LING LOOK Ms. Look was appointed the Chief Executive Officer, President, Chief Financial Officer and director of the Company on November 9, 2009. Ms. Look is also a manager of both Mega and Prestige. Ms. Look has been employed by La Jacques Fashion Limited for over ten years. Currently, she is the Chief Administrator, responsible for the accounting and administrative work. La Jacques Fashion Limited is a garment trading company. She was educated in Hong Kong and earned a diploma in Business Administration in 1991 from Hong Kong Shue Yan University (formerly called Shue Yan College). She also completed the Certificate Stage of Association of Chartered Certified Accountants in 1999. 16 SIU FONG KELLY YEUNG Ms. Yeung was appointed a director of the Company on November 9, 2009. Ms. Yeung graduated from the Primary school in Hong Kong. She then went to United Kingdom for further studies. In 1988, she finished at Level O. After graduation, she immediately joined and participated in the operations of restaurants. She has almost twenty years experience in the beverage industry. She has been running her own restaurant for over ten years. SIU LUN TONG Mr. Tong was appointed a director of the Company on November 9, 2009. Mr. Tong has been employed by Asian Alliance Garment Limited for more than 15 years. Currently, he is the production manager of Asian Alliance Garment Limited. At Asian Alliance Garment Limited, he specializes in management and control of factories and quality. Sportswear and jeans are the main lines of the company's business. COMMITTEES OF THE BOARD OF DIRECTORS In the ordinary course of business, the board of directors maintains a compensation committee and an audit committee. At this time, the Company's board of directors as whole serves as its compensation committee and audit committee. The primary function of the compensation committee is to review and make recommendations to the board of directors with respect to the compensation, including bonuses, of our officers. The functions of the audit committee are to review the scope of the audit procedures employed by our independent auditors, to review with the independent auditors our accounting practices and policies and recommend to whom reports should be submitted, to review with the independent auditors their final audit reports, to review with our internal and independent auditors our overall accounting and financial controls, to be available to the independent auditors during the year for consultation, to approve the audit fee charged by the independent auditors, to report to the board of directors with respect to such matters and to recommend the selection of the independent auditors. In the absence of a separate audit committee our Board of Directors functions as audit committee and performs some of the same functions of an audit committee, such as recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. CONFLICTS OF INTEREST - GENERAL. Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts and corporation opportunity, involved in participation with such other business entities. While each officer and director of our business is engaged in business activities outside of our business, they devote to our business such time as they believe to be necessary. 17 CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES Presently no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring an affiliate, associate person or business opportunity from any affiliate or any client of any such person. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act requires our Officers and Directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of copies of such reports received, and representations from certain reporting persons, we believe that, during the fiscal year ended June 30, 2010, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were filed in compliance with all applicable requirements with the exception of Top Growth Holdings Group and Mr. Yeung Cheuk Hung. CODE OF ETHICS Due to the limited scope of our current operations, we have not adopted a corporate code of ethics that applies to our principal executive officer, principal accounting officer, or persons performing similar function. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth certain information concerning compensation paid by the Company to its sole officer for the fiscal years ended June 30, 2010, 2009 and 2008 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE Nonequity Nonqualified incentive deferred Stock Option plan compensation All other Name & Salary Bonus awards awards compensation earnings compensation Total Position Year ($) ($) ($) ($) ($) ($) ($) ($) ------------- ------------ ---------- ------- -------- --------- --------------- --------------- -------------- ---------- Yuen Ling 2010 $0 $-0- $ -0- $ -0- $ -0- $-0- $-0- $ 0 Look David J. 2009 $60,000 $-0- $ -0- $ -0- $ -0- $-0- $-0- $60,000 Cutler(2) 2008 $60,000 $-0- $ -0- $ -0- $ -0- $-0- $-0- $60,000
(1) Ms. Look was appointed the President of the Company in November 2009. Ms. Look does not have a compensation agreement with the Company. (2) Includes $60,000 (2008 - $40,000) in fees payable to Burlingham Corporate Finance, Inc., a company controlled by Mr. Cutler, in respect of services provided to us by Mr. Cutler. In January 2009, 2,376,324 shares of restricted common stock, valued at $392,974, was issued to David Cutler, Aspeon's President and a director, and a corporation controlled by Mr. Cutler, in full settlement of Aspeon's debts to them. As a loan repayment, this share issuance is not included in the table. 18 In November 2009, Mr. Cutler resigned as an officer and director of the Company. EMPLOYMENT AND CONSULTING AGREEMENTS There were no employment contracts or consulting agreements with our directors or officers during the fiscal year ended June 30, 2010. DIRECTOR COMPENSATON The following table sets forth certain information concerning compensation paid to the Company's directors during the year ended June 30, 2010:
Nonqualified Non-equity deferred Fees incentive plan compensation All other earned or Stock Option compensation earnings compensation Total Name paid in awards awards ($) ($) ($) ($) ($) cash ($) ($) ----------- ---------- ----------- ---------------- ---------------- --------------- ------------- David J. Cutler(1) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Redgie Green (2) $ -0- $ -0- $ -0- $ -0- $-0- $ -0- $ -0- Kristi J. Kampmann (2) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Yuen Ling Look (3) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Siu Fong Kelly Yeung (3) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Siu Lun Tong (3) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
(1) Mr. Cutler resigned as an officer and director of the Company in November 2009. (2) Mr. Green and Ms. Kampmann resigned as directors of the Company on November 2009. (3) Ms. Look, Ms. Yeung and Mr. Tong were appointed directors in November 2009. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following tables set forth certain information regarding beneficial ownership of our common stock, as of June 30, 2010, by: o each person who is known by ASPI to own beneficially more than 5% of ASPI's outstanding common stock, o each of ASPI's named executive officers and directors, and o all executive officers and directors as a group. 19 Shares of common stock not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire the shares of common stock within 60 days are treated as outstanding only when determining the amount and percentage of common stock owned by such individual. Except as noted below the table, each person has sole voting and investment power with respect to the shares of common stock shown.
NUMBER OF PERCENT OF NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OUTSTANDING(4) Yuen Ling Look (2) President and Director 13,108,000 17.74% Top Growth Holdings Group (2) 13,108,000 17.74% Siu Fong Kelly Yeung 0 0% Director Siu Lun Tong 0 0% Director Yeung Cheuk Hung (3) 60,000,000 81.21% All executive officers and directors as a group, 3 people. 13,108,000 17.74%
(1) The above officers' and directors' address is c/o ASPI, Inc. 7609 Ralston Road, Arvada, Colorado, 80002. (2) Ms. Look is the beneficial owner of Top Growth Holdings Group, which holds 13,108,000 shares of the Company's common stock. (3) Mr. Hung is a manager of Prestige, the Company's wholly-owned subsidiary. (4) Based on 73,879,655 shares of the Company's common stock issued and outstanding at June 30, 2010. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDERPENDENCE Fiscal Year Ended June 30, 2010 During the year ended June 30, 2010, Mr. Yeung Cheuk Hung, the manager of Prestige and the majority shareholder of the Company, has advanced funds at June 30, 2010 of $163,745 to support the operations of Prestige. Such funds are due on demand. During the year ended June 30, 2010, Ms. Look, an officer and director of the Company, advanced funds of $321 to Mega to support operations. Such funds are due on demand. During the year ended June 30, 2010, Top Growth Holdings Group, an entity of which Ms. Look, an officer and director of the Company is the beneficial owner of, purchased 10,000,000 shares of the Company's common stock for $100,000 ($0.10 per share). 20 During the year ended June 30, 2010, Top Growth Holdings Group, an affiliate and entity of which Ms. Look, an officer and director of the Company, advanced $2,996 to the Company. Such funds are due on demand. Fiscal Year Ended June 30, 2009 During the fiscal years ended June 30, 2009, a former director, David J. Cutler, and a company controlled by Mr. Cutler, advanced to us $161,527 respectively by way of loan, bearing interest at 8%, to meet our ongoing operating expenses and fund the costs of bringing our financial statements and SEC reporting up to date. At December 31, 2008 the balance outstanding to Mr. Cutler, and the company controlled by Mr. Cutler, totaled $451,874, including accrued interest. On January 26, 2009, we issued 2,376,324 shares of restricted common stock, valued at $392,974 ($0.17 per share), to David Cutler, the Company's Former President and a former director, and a corporation controlled by Mr. Cutler, in full settlement of the Company's debts to them. As a result of the transaction, we recognized a gain of $61,993 on the settlement of this liability. Following the Reorganization of May 21, 2009 and the sale of all our subsidiary companies at June 30, 2009, there was no liability outstanding to Mr. Cutler by ASPI, Inc. at June 30, 2009. Effective January 26, 2009, ASPI authorized the issuance of a total of: i) 25,000 shares of restricted common stock, valued at $4,125, to a consultant, who was an existing shareholder of ASPI, as compensation for services he had provided to ASPI. ii) 50,000 shares of restricted common stock, valued at $8,250 to a current, and a former, non-executive director of ASPI (25,000 shares each) as compensation for services they had provided to ASPI. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees We incurred $3,407 and $3,000 to our current auditors, Larry O'Donnell, CPA, PC ("O'Donnell"), in the fiscal years ended June 30, 2010 and 2009 respectively. Tax Fees We did not incur any tax fees to our current auditors, O'Donnell, in the fiscal years ended June 30, 2010 and 2009 for professional services rendered for tax compliance, tax advice, and tax planning. We did incurred $0 and $3,375 in tax fees an unconnected third party, in the fiscal years ended June 30, 2010 and 2009 for professional services rendered for tax compliance, tax advice, and tax planning. It is the role of the Audit Committee, or in the absence of an audit committee, the Board of Directors, to consider whether, and determine that, the auditor's provision of non-audit services would be compatible with maintaining the auditor's independence. 21 ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS The following documents are filed as a part of this Report. The audited consolidated financial statements for the years ended June 30, 2010 and 2009 start on page F-1. (i) Exhibits. The following is a complete list of exhibits filed as part of this Form 10-K. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-B.
EXHIBIT NUMBER DESCRIPTION AND METHOD OF FILING 2.1 Agreement and Plan of Merger and Reorganization Into Holding Company** 2.2 Acquisition Agreement By and Among ASPI, Inc. and Prestige Prime Office, Ltd. and Its Shareholders *** 3(i).1 Articles of Incorporation of ASPI, Inc.** 3(i).2 Articles of Incorporation of A08 Holdings, Inc.** 3(ii).1 Bylaws of ASPI, Inc.** 3(ii).2 Bylaws of A08 Holdings, Inc.** 21.1 Subsidiaries of the Registrant* 31.1 Certification of Chief Executive and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act* 32.1 Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act* * Filed herewith. ** Filed as an Exhibit to the Current Report on Form 8K filed with the SEC on July 7, 2009. *** Filed as an Exhibit to the Current Report on Form 8K filed with the SEC on September 10, 2010.
22 Larry O'Donnell, CPA, P.C. Telephone (303) 745-4545 2228 South Fraser Street Fax (303) 369-9384 Unit I Email larryodonnellcpa@comcast.net Aurora, Colorado 80014 www.larryodonnellcpa.com Report of Independent Registered Public Accounting Firm Board of Directors ASPI, Inc. and Aspeon, Inc. Denver, Colorado I have audited the accompanying consolidated balance sheets of ASPI, Inc. and predecessor company, Aspeon, Inc., as of June 30, 2010 and 2009 and the related consolidated statements of operations, stockholders' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ASPI, Inc. and predecessor company, Aspeon, Inc., as of June 30, 2010 and 2009 and the results of it's consolidated operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had suffered significant losses as of June 30, 2010 and 2009 and no ongoing source of income. Management's plans to address these matters are also included in Note 2 to the financial statements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Larry O'Donnell CPA, PC Larry O'Donnell CPA, PC Aurora, Colorado September 28, 2010 F-1
ASPI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, June 30, 2010 2009 -------------- --------------- ASSETS Current Assets Cash & Cash Equivalents $ 36,468 $ - Customer Deposits 41,852 - Prepaid Expenses and Other Current Assets 11,339 100 --------------------------------- Total Current Assets 89,659 100 Property & Equipment, net of $49,921 accumulated depreciation 307,988 - --------------------------------- --------------------------------- TOTAL ASSETS $ 397,647 $ 100 ================================= LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable 24,233 - Accrued Liabilities 127,218 - Prepayments, Clients 16,707 - Advances, Related Parties 167,062 - --------------------------------- Total Current Liabilities 335,220 - COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred Stock, $0.01 par value: 25,000,000 shares authorized, no shares - - issued and outstanding. Common Stock, $0.01 par value: 100,000,000 shares authorized 922,756 222,756 73,879,655 and 1,314,038 shares issued and outstanding, respectively Additional Paid In Capital (357,435) 85,188,312 Other Comprehensive Income 80 - Accumulated Deficit (502,974) (85,410,968) --------------------------------- Total Stockholders' Equity 62,427 100 --------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 397,647 $ 100 ================================= See accompanying Notes to Consolidated Financial Statements. F-2
ASPI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009 2010 2009 ----------------------------------------- REVENUES $ 24,920 $ - COST OF REVENUES 54,126 - ----------------------------------------- (29,206) - OPERATING EXPENSES General and Administrative 423,667 150,198 Depreciation 50,072 - Gain on Settlement of Debt - (61,992) Gain on Statute Barred Liabilities - (3,399,505) Gain on Sale of Subsidiary companies - (2,519,907) ----------------------------------------- Total Operating (Income) Expenses 473,739 (5,831,206) OPERATING (LOSS) PROFIT (473,739) 5,831,206 Interest and Other Income (Expenses) Net (29) (17,568) ----------------------------------------- Profit before Income Taxes (502,974) 5,813,638 Provision for Income Taxes - - ----------------------------------------- NET (LOSS) INCOME $ (502,974) $ 5,813,638 ========================================= NET INCOME (LOSS) PER SHARE Basic & Diluted $ - $ 2.42 ========================================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic & Diluted 2,398,114 ========================================= See accompanying Notes to Consolidated Financial Statements. F-3
ASPI, INC. AND PREDECESSOR COMPANY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE YEARS ENDED JUNE 30, 2009 and 2008 Common Stock Treasury Stock Additional Subscrip- Accum- Accum- Paid - in tion ulated ulated Compre Compre- Shares Amount Shares Amount Capital Receiv- Deficit -hensive hensive Total able Profit/(Loss) Profit/(Loss) # $ # $ $ $ $ $ $ $ ---------- ---------- --------- ------- ------------ ----------- ------------ --------- ---------- ---------- Balance, June 30, 2008 1,314,038 $ 197,106 (13,333)$ (60,000)$ 84,849,858 $ -$ (91,296,473) $ 71,867 $ - $ 6,237,641) Stock Issued to Round Up Individ- ual Stock- holder's Holdings on 15:1 Reverse Split 638 - - - - - - - - - Stock Issued in Settle- ment of Debt 63,655 637 - - 9,868 - - - - 10,504 Stock Issued as Compen- sation 75,000 750 - - 11,625 - - - - 12,375 Stock Issued as Diretors' Remuner- ation 50,000 500 - - 7,750 - - - - 8,250 Stock Issued In Settle- ment of Debt 2,376,324 23,763 - - 369,211 - - - - 392,974 Cancella- tion of Treas- ury Stock - - 13,333 60,000 (60,000) - - - - - Net & Compre- hensive Profit - - - - - - 5,813,638 - 5,813,638 5,813,638 ----------- ----------- ---------- --------- -------- ------------ ---------- ------------ --------- ---------- Balance, June 30, 2009 3,879,655 222,756 - - 85,188,312 - (85,482,835) 71,867 100 ----------------------------------------------------------------------------------------------- ---------- Subscrip- tion Receiv- able - - - - - 100,000 - - - 100,000 Common stock issued for subscrip- tion Receiv- able 10,000,000 100,000 - - (100,000 - - Common stock issued for Prestige Acquisi- tion 60,000,000 600,000 - - - - - 600,000 Acquisi- tion account- ing - - - - (85,545,747) - 85,482,835 (71,867) (134,779) Net & Compre- hensive Income - - - - - - (502,974) 80 (502,894) (502,894) =========== ----------- ---------- --------- -------- ------------ ---------- ------------ --------- ---------- Balance, June 30, 2010 73,879,655 $ 922,756 $ - $ - $ (357,435)$ -$ (502,974) $ 80 $ 62,427 =========== ========== ========= ======== ============ ========== ============ ========= ========== See accompanying Notes to Consolidated Financial Statements. F-4
ASPI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009 June 30, June 30, 2010 2009 ----------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES NET (LOSS) INCOME $ (502,974)$ 5,813,638 ADJUSTMENTS TO RECONCILE NET PROFIT TO NET CASH USED IN OPERATING ACTIVITIES Stock issued for Consultants - 12,375 Stock issued for Directors - 8,250 Gain on Settlement of Debt - (61,993) Gain on Statute barred Liabilities - (3,399,505) Gain on Sale of Subsidiaries - (2,519,907) Depreciation 49,921 - CHANGES IN OPERATING ASSETS & LIABILITIES Increase in Customer Deposits and Prepayments (53,091) (100) Increase in Accounts Payable 151,450 (14,400) Increase in Client Prepayments 16,708 - ----------------------------------- Total Cash Flow used in Operating Activities (337,986) (161,642) CASH FLOWS FROM INVESTING ACTIVITIES Payments for and Proceeds from sale of subsidiaries (50,000) 100 Purchase of property and equipment (357,909) - ----------------------------------- Total Cash Flow (used) provided by Investing Activities (407,909) 100 CASH FLOWS FROM FINANCING ACTIVITIES Advances under Notes Payable - 161,527 Advances from related parties 167,062 - Proceeds from sales of common stock 613,841 - ----------------------------------- Total Cash Flow provided by Financing Activities 780,903 161,527 Foreign Currrency Translation 1,460 - DECREASE IN CASH & CASH EQUIVALENTS $ 36,468 $ (15) =================================== Cash and Cash Equivalents at the beginning of the period $ - $ 15 =================================== Cash and Cash Equivalents at the end of the period $ 36,468 $ - =================================== SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash paid for interest $ - $ - ----------------------------------- Cash paid for income tax $ - $ - ----------------------------------- See accompanying Notes to Financial Statements. F-5
ASPI, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements For the Year Ended June 30, 2010 NOTE 1 - BUSINESS AND BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Business ASPI, Inc. was incorporated in the State of Delaware in September 2008, as a wholly owned subsidiary company of Aspeon, Inc. Aspeon, Inc. was a publicly quoted shell company with no cash on hand, $1,000 of assets, no operating business or other source of income, outstanding liabilities of $2,520,800 and a stockholders' deficit of $2,519,808. Effective May 21, 2009, under an Agreement and Plan of Merger and Reorganization into a Holding Company ("the Reorganization") filed with the Secretary of State of Delaware: - ASPI, Inc. acquired 100% of the issued share capital of Aspeon, Inc. in a share for share exchange of ASPI, Inc. shares for Aspeon, Inc. shares with Aspeon, Inc.'s existing shareholders., and - Aspeon, Inc. merged with a one of its former subsidiary companies, A08, Inc. As a result of the Reorganization, shareholders in publicly quoted Aspeon, Inc. became shareholders in the publicly quoted ASPI, Inc., Aspeon, Inc. ceased to exist as an independent legal entity following its merger with A08, Inc., A08, Inc. became a subsidiary company of ASPI, Inc. with A08, Inc. owning the subsidiary companies formerly owned by Aspeon, Inc. Prestige Prime Office, Ltd. Acquisition Effective June 30, 2010, ASPI entered into an Acquisition Agreement with Prestige Prime Office, Ltd. Under the Agreement, ASPI acquired all of the issued and outstanding common stock of Prestige Prime Office, LTD. ("Prestige"), a Hong Kong Special Administrative Region Corporation. As a result of the acquisition, Prestige will become a wholly-owned subsidiary of ASPI. In exchange for $50,000, cash, and 60,000,000 restricted shares of the common stock of ASPI, ASPI acquired 100% all of the 4,000,000 issued and outstanding shares of common stock of Prestige. Prestige has one sole shareholder, Mr. Yeung Cheuk Hung. As a result of the acquisition, Mr. Yeung became the majority shareholder of ASPI holding approximately 81.21% of the issued and outstanding common stock of ASPI. Prestige is a serviced office provider in the Far East. Prestige provides office space that is fully furnished, equipped and staffed, located at premier addresses in central business districts with convenient access to airports or public transportation. Services include advanced communication system, network access, updated IT and world-class administrative support, as well as a full menu of business services and facilities, such as meeting rooms and video conferencing. F-6 Mega Action Limited During the year ended June 30, 2010, the Company incorporated a subsidiary, Mega Action Limited, a BVI corporation (the "Subsidiary"). Two of the Company's directors, Yuen Ling Look and Siu Lun Tong, will act as directors of the new Subsidiary. In consideration of $1.00, Mega Action Limited issued the Company one share of Mega Action Limited ("Mega Action"). Mega Action is authorized to issue up to 50,000 shares of a single class each with a par value of $1.00. There is only one share of Mega Action share issued and outstanding. Mega Action is a wholly owned Subsidiary of the Company. Mega Action will operate as the eastern operations management division of the Company. Basis of Presentation Principles of Consolidations The accompanying consolidated financial statements include the accounts of ASPI and its wholly-owned subsidiaries, Prestige Prime Office, Ltd. and Mega Action Limited. Both subsidiaries operations are located in Asia. All significant inter-company balances and transactions have been eliminated in consolidation. Reclassification Certain amounts previously reported have been reclassified to conform to current presentation. Significant Accounting Policies Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents. Fair Value of Financial Instruments The carrying amount of cash, accounts payable and notes payable is considered to be representative of its fair value because of the short-term nature of this financial instrument. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally on the straight-line method over the estimated useful life of each type of asset which ranges from three to five years. Major improvements are capitalized, while expenditures for repairs and maintenance are expensed when incurred. Upon retirement or disposition, the F-7 related costs and accumulated depreciation are removed from the accounts, and any resulting gains or losses are credited or charged to income. Revenue Recognition The Company recognizes revenue when it is earned and expenses are recognized when they occur. Advertising Expenses For the years ended June 30, 2010 and 2009, the Company expended $23,202 and $-0-, respectively on advertising and marketing. The Company expenses these costs when incurred. Foreign Currency Translation The financial statements of ASPI's wholly-owned subsidiaries, Prestige and Mega are measured using the local currency (the Hong Kong Dollar (HK$)) as the functional currency. Assets and liabilities of Prestige and Mega are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the period. The resulting cumulative translation adjustments have been recorded as a component of comprehensive income (loss), included as a separate item in shareholders' equity. The Company is exposed to movements in foreign currency exchange rates. In addition, the Company is subject to risks including adverse developments in the foreign political and economic environment, trade barriers, managing foreign operations and potentially adverse tax consequences. There can be no assurance that any of these factors will not have a material negative impact on the Company's financial condition or results of operations in the future. Stock-Based Compensation Beginning January 1, 2006, the Company adopted the provisions of and accounts for stock-based compensation using an estimate of value in accordance with the fair value method. Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period. The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes. The valuation method applies to new grants and to grants that were outstanding as of the effective date and are subsequently modified. Other Comprehensive Income (Loss) The Company has no material components of other comprehensive income (loss), and accordingly, net loss is equal to comprehensive loss in all periods. Net Income (Loss) per Share Basic net income per share is computed by dividing net income available to common shareholders for the period by the weighted average number of common shares outstanding for the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period. F-8 Income Taxes Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment. Recent Accounting Pronouncements In July 2010, the Financial Accounting Standards Board ("FASB") issued Proposed Accounting Standard Update (Topic 450) - Disclosure of Certain Loss Contingencies. This amendment would lower the current disclosure threshold and broaden the current disclosure requirements to provide adequate and timely information to assist users in assessing the likelihood, potential magnitude, and potential timing (if known) of future cash outflows associated with loss contingencies. For public entities, the new guidance would be effective for fiscal years ending after December 15, 2010, and interim and annual periods in subsequent fiscal years. The Company is currently evaluating the impact of the future adoption of the Update. There were various other accounting standards and interpretations issued in 2009 and 2010, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. NOTE 2 - GOING CONCERN The Company's financial statements for the year ended June 30, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $502,974 for the year ended June 30, 2010 and an accumulated deficit of $502,974 at June 30, 2010. At June 30, 2010, the Company had total current assets of $89,659 and total liabilities, all current of $335,200 for a working capital deficit of $245,541. The Company's ability to continue as a going concern may be dependent on the success of management's plan discussed below. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. To the extent the Company's operations are not sufficient to fund the Company's capital requirements, the Company may attempt to enter into a revolving loan agreement with financial institutions or attempt to raise capital through the sale of additional capital stock or through the issuance of debt. At the present time, the Company does not have a revolving loan agreement with any financial institution nor can the Company provide any assurance that it will be able to enter into any such agreement in the future or be able to raise funds through the further issuance of debt or equity in the Company. NOTE 3 - ADVANCES, RELATED PARTIES During the year ended June 30, 2010, Top Growth Holdings Group, an affiliate and entity of which Ms. Look, an officer and director of the Company, advanced $2,996 to the Company. Such funds are due on demand. F-9 During the year ended June 30, 2010, Mr. Yeung Cheuk Hung, the manager of Prestige and the majority shareholder of the Company, has advanced funds at June 30, 2010 of $163,745 to support the operations of Prestige. Such funds are due on demand. During the year ended June 30, 2010, Ms. Look, an officer and director of the Company and the manager of Mega, advanced funds of $321 to Mega to support operations. Such funds are due on demand. NOTE 4 - COMMITMENTS AND CONTIGENCIES Prestige operates from Silvercord, No.30 Canton Road, Tsimshatsui, which is a premier commercial building in Hong Kong. The center is located on one floor and occupies approximately 5,000 square feet. We pay an annual rental rate of $213,780. NOTE 5 - STOCKHOLDERS' EQUITY The authorized capital stock of the Company is 100,000,000 shares of common stock with a $0.01 par value and 25,000,000 shares of preferred stock with a par value of $0.01 per share. At June 30, 2010, the Company had 73,879,655 shares of its common stock issued and outstanding. During the year ended June 30, 2010, the Company did issue a Subscription Receivable for $100,000 to issue 10,000,000 shares at $0.01 per share to Top Growth Holdings Group, of which Ms. Look, an officer and director of the Company is a beneficial owner. Prior to year end the Receivable was paid for and the Company issued 10,000,000 shares of its restricted common stock. On June 30, 2010, the Company issued 60,000,000 restricted shares of the common stock to the sole equity holder of Prestige Prime Offices, Ltd., Mr. Mr. Yeung Cheuk Hung in exchange for 100% all of the 4,000,000 issued and outstanding shares of common stock of Prestige, as further described in Note 1. NOTE 6 - TAXES The Company is subject to foreign and domestic income taxes. The Company has had no income, and therefore has paid no income tax. Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company's deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry-forwards. The NOL carry forwards expire in various years through 2030. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the NOL carry-forwards. NOL carry-forwards may be further limited by a change in company ownership and other provisions of the tax laws. F-10 The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows: Estimated NOL Valuation Net Tax Period Ending Carry-forward Allowance Benefit June 30, 2010 502,947 (502,947) - NOTE 7 - SUBSEQUENT EVENTS The Company has evaluated it activities subsequent to the year ended June 30, 2010 and found no other reportable subsequent events. F-11 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ASPI, INC. Date: October 11, 2010 By: /s/ Yuen Ling Look -------------------------------- Yuen Ling Look, President, Chief Executive Officer and Chief Financial Officer (Principal Accounting Officer) In accordance with the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Dated: October 11, 2010 ASPI, INC. /s/ Yuen Ling Look -------------------------------------- Yuen Ling Look, Director Siu Lun Tong -------------------------------------- Siu Lun Tong, Director 23