10-Q 1 f10q0611_bluebridge.htm QUARTERLY REPORT f10q0611_bluebridge.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
_______________
 
FORM 10-Q
_______________
 
(Mark One)
 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2011
 
or
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
BLUE BRIDGE CAPITAL, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
333-153838
 
26-1402471
(State or other jurisdiction of
incorporation or organization)
 
(Commission File Number)
 
(I.R.S Employer Identification No.)

637 Howard Street
San Francisco, CA 94105
 (Address of principal executive offices)
 _______________

1-888-494-2330
 (Registrant’s telephone number, including area code)
_______________
 
Apextalk Holdings, Inc.
_______________
 
 (Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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.
 
Large Accelerated Filer o
Accelerated Filer o  
Non-Accelerated Filer o   
(Do not check if a smaller reporting company)    
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 o No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of August 15, 2011, there were 3,911,951 shares of common stock were issued and outstanding.
 
 
 

 
 
 
BLUE BRIDGE CAPITAL, INC.
FORM 10-Q
 
June 30, 2011
 
 
PART I-- FINANCIAL INFORMATION
 
 
PART II-- OTHER INFORMATION
 
 
 
 
PART I-- FINANCIAL INFORMATION
 
 

 
BLUE BRIDGE CAPITAL, INC.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
             
             
   
June 30, 2011
(UNAUDITED)
   
December 31, 2010
 
ASSETS
Current Assets
 
 
       
  Cash and cash equivalents
  $ 11,842,898     $ 3,870,882  
  Accounts receivable from a related company
    991,101       706,361  
  Accounts receivable from third parties
    633,558       693,021  
  Other receivables, net
    377,926       52,050  
  Prepaid expenses
    58,455       1,442  
  Deposits paid for acquiring property and equipment
    309,430       -  
  Note receivable from a related company
    -       1,851,009  
  Entrusted bank loans receivable – current portion
    5,105,592       5,006,827  
  Entrusted bank loans receivable from a related party – current portion      15,780,925        13,654,984  
  Short-term advance to a related company
    3,867,873       -  
  Current assets of discontinued operations
    1,469       1,718  
Total Current Assets
   
36,339,074
      25,838,294  
Property and equipment, net
    704,473       406,301  
Patent, net
    8,969       8,969  
Entrusted bank loans receivable, net of current portion    
2,630,153
      -  
  Noncurrent assets of discontinued operations
    15,674       19,521  
  Total Assets
  $ 39,698,343     $ 26,273,085  
                 
LIABILITIES AND EQUITY
                 
Current Liabilities
               
  Accounts payable
  $ 13,561     $ 36,793  
  Accrued expenses from other payables
    96,660       135,395  
  Advance from customers
    2,011,140       1,094,365  
  Short term note payable
    2,577,551       2,527,689  
  Income tax payable
    1,418,837       2,253,071  
  Other taxes payable
    270,258       -  
  Current liabilities of discontinued operations
    50,838       50,838  
 Total Current Liabilities
    6,438,845       6,098,151  
                 
 Total Liabilities
    6,438,845       6,098,151  
                 
 Commitments and Contingencies
    -       -  
                 
Stockholders' Equity
               
  Common stock, authorized 20,000,000 shares, par value $0.001, 3,911,951 shares and 3,370,284 shares issued and outstanding
  on June 30, 2011 and  December 31, 2010, respectively
    3,912       3,370  
  Additional paid-in-capital
    11,800,807       8,467,246  
  Accumulated earnings
    14,954,764       4,484,588  
  Accumulated other comprehensive income
    911,715       356,162  
Total Stockholders' Equity
    27,671,198       13,311,366  
  Noncontrolling interests
    5,588,300       6,863,568  
Total Equity
    33,259,498       20,174,934  
                 
Total Liabilities and Equity
  $ 39,698,343     $ 26,273,085  
                 
See accompanying notes to unaudited condensed consolidated financial statements
  
 
 
BLUE BRIDGE CAPITAL, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
AND OTHER COMPREHENSIVE INCOME
 
(UNAUDITED)
 
   
 
                   
                         
   
For the Three Months Ended
   
For the Six Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
 
   
 
   
 
   
 
 
Consultancy fees earned - from a related company, net
  $ 470,951     $ 327,725     $ 1,182,281     $ 327,725  
Consultancy fees earned, net
    9,377,704       15,928       15,768,228       15,928  
      Total Revenue, net
    9,848,655       343,653       16,950,509       343,653  
                                 
Operating Expenses
                               
Payroll expenses
    172,851       48,898       334,737       76,594  
Rent and utilities
    78,401       15,960       155,789       21,060  
General and administrative
    448,640       51,083       787,578       73,706  
Legal and professional fees
    108,912       94,692       247,787       130,381  
  Total Operating Expenses
    808,804       210,633       1,525,891       301,741  
                                 
Operating Income
    9,039,851       133,020       15,424,618       41,912  
                                 
Other Income
                               
Gain on bargain purchase of Yi An
    -       306,005       -       306,005  
Interest income from entrusted bank loans receivable
    649,939       -       1,232,879       -  
Interest income
    11,159       180       14,372       180  
    Total Other Income
    661,098       306,185       1,247,251       306,185  
                                 
Income from Continuing Operations before Income Taxes and Discontinued Operations
    9,700,949       439,205       16,671,869       348,097  
                                 
    Provision for Income Taxes
    (2,417,856 )     (53,339 )     (4,164,053 )     (54,927 )
                                 
Net Income from Continuing Operations
    7,283,093       385,866       12,507,816       293,170  
                                 
Discontinued Operations, Net of Taxes
                               
     (Loss) from discontinued operations, net of taxes
    (1,941 )     (8,226 )     (4,097 )     (23,612 )
(Loss) from Discontinued Operations
    (1,941 )     (8,226 )     (4,097 )     (23,612 )
                                 
Net Income
    7,281,152       377,640       12,503,719       269,558  
                                 
    Less: Income attributable to noncontrolling interests
    739,463       110,068       2,033,543       110,068  
                                 
Net Income attributable to Stockholders
    6,541,689       267,572       10,470,176       159,490  
                                 
Amounts attributable to Stockholders
                               
   Income from continuing operations
    6,543,630       275,798       10,474,273       183,102  
   (Loss) from discontinued operations, net of taxes
    (1,941 )     (8,226 )     (4,097 )     (23,612 )
   Net income
    6,541,689       267,572       10,470,176       159,490  
                                 
Other Comprehensive Income
                               
      Total foreign currency translation gain
    431,277       36,709       542,345       36,709  
      Less: foreign currency translation gain attributable to noncontrolling interests
    43,103       17,987       70,459       17,987  
    Foreign currency translation gain attributable to stockholders
    388,174       18,722       471,886       18,722  
                                 
Comprehensive Income
  $ 6,929,863     $ 286,294     $ 10,942,062     $ 178,212  
                                 
                                 
Basic and Diluted Net Income per Share attributable to Stockholders
                         
     Income from continuing operations
  $ 1.67     $ 0.17     $ 2.80     $ 0.14  
     (Loss) from discontinued operations
    (0.00 )     (0.01 )     (0.00 )     (0.02 )
     Net income per share
  $ 1.67     $ 0.16     $ 2.80     $ 0.12  
                                 
Weighted average number of common shares outstanding
                               
during the period - Basic and Diluted
    3,911,951       1,653,617       3,747,356       1,306,277  
                                 
                                 
See accompanying notes to unaudited condensed consolidated financial statements
 
 
BLUE BRIDGE CAPITAL, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
 
(UNAUDITED)
 
               
     
For the Six Months Ended June 30,
 
     
2011
   
2010
 
Cash flows from operating activities
           
 
Net income
 
$
12,503,719
   
$
269,558
 
 
Less: (loss) from discontinued operations, net of tax
   
(4,097
)
   
(23,612
)
 
Net income from continuing operations
   
12,507,816
     
293,170
 
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
         
 
Gain on bargain purchase of Yi An
   
-
     
(306,005
)
 
Depreciation and amortization
   
73,261
     
7,477
 
 
In kind contribution of services
   
-
     
18,300
 
Change in operating assets and liabilities net of effects from purchase of subsidiary Yi An:
         
 
(Increase) in accounts receivable from related parties
   
(267,729
)
   
-
 
 
Decrease in accounts receivable from third parties
   
72,303
     
-
 
 
(Increase) in other receivables
   
(321,156
)
   
(41,172
)
 
(Increase) in prepaid expenses
   
(56,361
)
   
-
 
 
(Increase) in other assets
   
-
     
(60,000
)
 
Increase in accounts payable
   
37,289
     
33,609
 
 
Increase (Decrease) in accrued expenses
   
(100,975
)
   
54,830
 
 
Increase in advanced from customers
   
885,013
     
-
 
 
Increase (Decrease) in income tax payable
   
(868,692
)
   
50,087
 
 
Increase in other taxes payable
   
267,187
     
9,769
 
Net cash provided by operating activities from continuing operations
   
12,227,956
     
60,065
 
Net cash (used in) operating activities from discontinued operations
   
(250
)
   
(25,411
)
Net cash provided by operating activities
   
12,227,706
     
34,654
 
                   
Cash flows from investing activities
               
 
Payment for purchase of interest in Yi An, net of cash acquired
   
(1,261,500
)
   
(3,782,192
)
 
Purchase of equipment
   
(360,315
)
   
(94,508
)
 
(Increase) in deposits paid for acquiring property and equipment
   
(305,913
)
   
-
 
 
Decrease in notes receivable from a related company
   
1,866,071
     
4,687,635
 
 
(Increase) in short term advance to a related company
 
(3,823,916
)
 
-
 
 
(Increase) in note receivable
   
-
     
(4,797,576
)
 
(Increase) in entrusted bank loans receivable from a related company
   
(1,835,480
)
   
-
 
Net cash (used in) investing activities from continuing operations
   
(5,721,053
)
   
(3,986,641
)
Net cash (used in) investing activities from discontinued operations
   
-
     
-
 
Net cash (used in) investing activities
   
(5,721,053
)
   
(3,986,641
)
                   
Cash flows from financing activities
               
 
Proceeds from issuance of common stock
   
1,300,000
     
4,250,000
 
 
Payments to note payable
   
-
     
(22,264
)
 
Proceeds from stockholders' loan
   
-
     
18,578
 
Net cash provided by financing activities from continuing operations
   
1,300,000
     
4,246,314
 
Net cash provided by financing activities from discontinued operations
   
-
     
100
 
Net cash provided by financing activities
   
1,300,000
     
4,246,414
 
                   
Effect of exchange rates on cash
   
165,114
     
862
 
                   
Net increase in cash
   
7,971,767
     
295,289
 
                   
Cash and cash equivalents from continuing operations at beginning of period
   
3,870,882
     
-
 
Cash and cash equivalents from discontinued operations at beginning of period
   
1,718
     
21,710
 
Cash and cash equivalents at end of period
   
11,844,366
     
316,999
 
Less cash and cash equivalents from discontinued operations at end of period
   
1,469
     
14,169
 
Cash and cash equivalents  from continuing operations at end of period
 
$
11,842,898
   
$
302,830
 
                   
Cash paid during the period for:
               
Income taxes
 
$
4,754,176
   
$
10,470
 
                   
See accompanying notes to unaudited condensed consolidated financial statements
 
 
 

BLUE BRIDGE CAPITAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

 
NOTE 1.        SUMMARY OF ORGANIZATION

Apextalk, Inc. was incorporated on November 7, 2007 under the laws of the state of Delaware.  On November 12, 2007, Apextalk, Inc. changed its name to Apextalk Holdings, Inc..  On June 1, 2011, Apextalk Holdings, Inc. changed its name to Blue Bridge Capital, Inc. (“BBC”). The company, located in San Francisco, California, is a holding company whose subsidiaries provide various telecom services (through September 1, 2010, see Note 5) and financial consulting services.
 
Apextalk Inc. (“API”) was incorporated on June 8, 2004 under the laws of the state of California.  The company has integrated VoIP and wireless technology to develop various market driven applications. BBC completed the acquisition of API on November 16, 2007 where BBC purchased all of the outstanding shares of API.  

Guangdong Yi An Investment Consulting Company Limited (“Yi An”) was incorporated in the People’s Republic of China (“PRC” or “China”) on September 7, 2009 as a limited liability company. Yi An engaged in financial consulting, financial advisory, management consulting, and business information consulting in the PRC. On February 1, 2010, Yi An established a 51% held subsidiary named Guangzhou Hua Ying Venture Capital Co., Ltd. (“Hua Ying”) which engaged in financial advisory services in the PRC as a limited liability company. Yi An and its majority owned subsidiary Hua Ying are hereafter referred to as (“Yi An”).  On June 1, 2010, BBC completed the purchase of 51% ownership of Yi An with the last cash payment made on June 7, 2010. On October 25, 2010, BBC completed the purchase of additional 24.37% ownership of Yi An. On March 25, 2011, BBC completed the purchase of additional 14.63% ownership of Yi An. As a result, BBC currently owns 90% of the issued and outstanding common stock of Yi An.
 
NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Changes in Basis of Presentation

The 2010 financial information has been revised so that the basis of presentation is consistent with that of the 2011 financial information. This revision reflects the financial condition and results of operations of API as discontinued operations for all periods presented. For a summary of discontinued operations see Note 5.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related notes of the Company for the three and six months ended June 30, 2011 and 2010, and as of June 30, 2011, are unaudited. The unaudited interim condensed consolidated financial information has been prepared in accordance with accounting principles generally accepted in the United State (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnote required by GAAP for complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2010  on Form 10-K that was filed on March 30, 2011. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management reflects all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of operations of the Company for the three and six months ended June 30, 2011 and 2010, the results of cash flows of the Company for the six months ended June 30, 2011 and 2010,  and the financial position of the Company as of June 30, 2011. Interim results are not necessarily indicative of the results to be expected for an entire year or any other future year or interim period. 
 
Consolidation
 
The accompanying condensed consolidated financial statements include the parent company and its wholly owned subsidiary of API  from January 1, 2010 to June 30, 2011 and majority owned subsidiary of Yi An from June 1, 2010 to June 30, 2011.  The Company discontinued its telecom operations, API, on September 1, 2010. However, BBC still wholly owns API as of June 30, 2011, thus, the financial condition and results of operations of API was included in the condensed consolidated financial statements during the respective periods.  All of the material inter-company transactions have been eliminated. The noncontrolling interests represent the noncontrolling shareholders’ 10.00% ownership interest of Yi An. The portion of the income applicable to noncontrolling interests in subsidiary undertaking is reflected in the condensed consolidated statements of operations.
 
 
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations and Risks

Substantially Yi An’s assets are located in the PRC and substantially Yi An’s revenues were derived from customers located in the PRC.  In addition, financial instruments that potentially subject Yi An to significant concentrations of credit risk consist primarily of cash, accounts receivable and short term notes receivable.  As of June 30, 2011, Yi An maintained cash balances at financial institutions in the PRC. These cash balances may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limited applicable to financial institutions located in the United States. However, none of Yi An’s cash has been or is currently insured by the FDIC or a similar government sponsored institution. Yi An has not experienced any losses in such accounts and believes it is not exposed to any significant risks related to its cash. Moreover, Yi An monitors the credit ratings of these financial institutions in order to mitigate the company’s credit risk. Further, Yi An mitigates credit risk through procedures that include determination of credit limits, credit approvals, and related monitoring procedures to ensure delinquent receivables are collected.
 
Yi An’s operations are carried out in China. Accordingly, Yi An’s business, financial condition and results of operations, respectively, may be influenced significantly by the political, economic and legal environments in China as well as by the general state of the economy in China. Yi An’s operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. Yi An’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

Cash and Cash Equivalents

The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents. The cash of $11,817,473 is uninsured by FDIC as it is held in the bank accounts in China.

Accounts Receivable and Allowance for Doubtful Accounts

---Financial Consultancy services

The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.  An allowance for doubtful accounts is established and recorded based on managements’ assessment of customer credit history, overall trends in collections and write-offs, and expected exposures based on facts and prior experience. As of June 30, 2011, the Company has recorded $-0- amount allowance for doubtful accounts.

---Value- added Telecom Service

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company evaluates the trends in customers’ payment patterns, including review of specific delinquent accounts, changes in business conditions and external communications available about customers to estimate the level of allowance that is needed to address potential losses that the Company may incur due to the customer’s inability to pay.  Accounts are considered delinquent or past due, if they have not been paid within the six-month-term. Delinquent account balances are written off after management has determined that the likelihood of collection is not probable. As of June 30, 2011, the Company has recorded an allowance for doubtful accounts in the amounts of $-0-.
 
 
Property and Equipment

Property and equipment are stated at cost and are depreciated on the straight-line method except equipment located in United States are depreciated using 150% the double-declining balance method, less estimated residual values, over their estimated useful lives, which differ by asset category. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful lives of the assets:

● Equipment: 3-5 years
● Software: 5 years
● Leasehold improvements: over the lease terms
● Motor vehicles: 5 years

Expenditures associated with upgrades and enhancements are intended to improve, add functionality, or otherwise extend the life of a respective asset are capitalized; while expenditures that do not, such as repairs and maintenance, are expensed as incurred. The residual value of property and equipment is estimated to be equal to 10% of the original cost.  Upon disposal, the assets and related accumulated depreciation are removed from the Company’s accounts, and the resulting gains or losses are reflected in the statements of operations.

Intangible Assets

Intangible assets are stated at cost and are amortized using straight-line method over their estimated useful lives. Patent fees paid are not amortized until approved.

Impairment of Long-lived Assets
 
The Company evaluates the recoverability of its long-lived assets, including goodwill, on an annual basis or more frequently if indicators of potential impairment arise. Following the criteria of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 350, Intangibles-Goodwill & Other, the Company evaluates the recoverability of its amortizable purchased intangible assets based on an estimate of the undiscounted cash flows resulting from the use of the related asset group and its eventual disposition. The asset group represents the lowest level for which cash flows are largely independent of cash flows of other assets and liabilities. Measurement of an impairment loss for long-lived assets that the Company expects to hold and use is based on the difference between the fair value and carrying value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments

FASB ASC 825, Disclosure about Fair Value of Financial Instruments, requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
 
The carrying value of cash and cash equivalents, accounts receivable, other receivable, notes receivable, entrusted bank loan receivable, accounts payable, notes payable and other payables approximate their fair values because of the short-term nature of these instruments.  Management of the Company is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.
 
Revenue and Cost Recognition

---Financial Consultancy services

The Company recognizes revenues from consultancy services when services are performed and collectability is reasonably assured.
 
---Value- added Telecom Service

The Company recognizes revenue on arrangements in accordance with FASB ASC 605, Revenue Recognition. Revenue is recognized when amounts are earned and when the amount and timing of the revenue can be reasonably estimated. Accounts with no activities in three months will be cancelled and the unused balances in these accounts will not be refunded to customers and recorded as revenue. Expenses are recognized when they occurred and matched against revenue, as a component of costs of services in the statement of operations in accordance with FASB ASC 605, Revenue Recognition. Revenues from internet communication services are recognized in the period such services are used by the end user and monthly service fee is charged.

Advertising expenses

The Company expenses advertising costs as incurred. Advertising expenses were $225,470 and $-0- for the six months ended June 30, 2011 and 2010, respectively.
 
 
Income Taxes

The Company accounts for income taxes under the FASB ASC 740, Income Taxes. Under FASB 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.  Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period included the enactment date.

FASB ASC 740 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This Interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

Foreign Currency Transactions

The functional currency of Yi An is Renminbi (“RMB”). Foreign currency transactions during the period are translated to the functional currency at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the approximate rates of exchange at that date. Non-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.
 
The financial statements are translated into U.S. Dollars (“USD”) using the closing rate method.  The balance sheet items are translated into USD using the exchange rates at the respective balance sheet dates.  The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period.  All exchange differences are recorded within equity.

The exchange rates used to translate amounts in RMB from Yi An into USD for the purposes of preparing the financial statements were as follows:

   
June 30, 2011
Balance sheet items, except for share capital, additional paid-in capital and retained earnings as of period ended
 
RMB1=USD0.15471
Amounts included in the statements of operations and cash flows for the period
 
RMB1=USD0.15296

The translation gain recorded for the six months ended June 30, 2011 was $471,886.
 
No presentation is made that RMB amounts have been, or would be, converted into USD at the above rates. Although the Chinese government regulations now allow convertibility of RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that RMB could be converted into USD at that rate or any other rate.

The value of RMB against USD and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of USD reporting.
 
Other Comprehensive Income

The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to USD is reported as other comprehensive income in the statements of operations and comprehensive income and stockholders’ equity.

Earnings (Loss) per Share

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC 260, Earnings Per Share.  As of June 30, 2011 and 2010, there were no diluted shares outstanding.

Business Segments

The Company operates in two segments and segments information is presented in Note 6.
 

Reclassification

Certain amounts from the prior year financial statements have been reclassified to conform to the current year presentation.  These reclassifications had no effect on the Company's condensed consolidated net income (loss) or stockholders' equity (deficiency).

Recent Accounting Pronouncements

Occasionally, new accounting standards are issued or proposed by the FASB, or other standards-setting bodies that we adopt by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.  
 
NOTE 3.        ACQUISITION

On December 16, 2009, BBC entered into a share transfer agreement (the “Share Transfer Agreement”) with the common stock shareholders of Guangdong Yi An Investment Consulting Co., Ltd (“Yi An”). Pursuant to the Share Transfer Agreement, BBC will acquire 51% of the issued and outstanding common stock of Yi An for an aggregate of RMB 25,500,000 (or approximate $4,000,000). The Share Transfer Agreement was approved by the Chinese government on March 9, 2010.  With the unanimous written consent of the board of directors of the Company, on June 7, 2010 the Yi An Shareholders received an aggregate of $3,951,595.  In exchange, the Company acquired 51% of the issued and outstanding common stock of Yi An (the “Closing”).  As a result of the Closing, both parties agreed that Yi An became a subsidiary of the Company from June 7, 2010, and this transactions was accounted for as a business combination.

The total purchase price for this acquisition was $3,951,595.  Of the total cash consideration of $3,951,595, $306,005 was preliminarily allocated to gain on bargain purchase, $13,102,872 to tangible assets, $169,403 to cash acquired, $2,563,660 to net assumed liabilities and $6,451,615 to noncontrolling interests. Gain on bargain purchase represents the excess of net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed excess over the aggregate purchase price and the fair value of the noncontrolling interest in Yi An. Such preliminarily gain is present as an extraordinary item separately in the Company’s condensed statement of operation and other comprehensive income.
 
   
Fair Value
 
Fixed assets
 
$
271,368
 
Deposits paid for acquiring P&E
   
2,481
 
Accounts receivables
   
900,242
 
Other receivables
   
39,591
 
Note receivable
   
11,889,190
 
Cash in bank
   
169,403
 
Other payables
   
(805
)
Note payable
   
(2,460,965
)
Accrued professional fees
   
(2,001
)
Accrued expenses
   
(7,205
)
Income taxes payable
   
(82,781
)
Other taxes payable
   
(9,903
)
Non-controlling interest in Hua Ying
   
(2,360,379
)
Non-controlling interest in Yi An
   
(4,090,636
)
Cash BBC paid for 51% interest in Yi An
   
(3,951,595
)
Gain on bargain purchase of 51% interest in Yi An
 
$
(306,005
)
 
 
This business combination did have a material impact on the Company’s condensed consolidated financial statements, and therefore pro forma disclosures are presented below. The following information is under the assumption that BBC purchased 51% of Yi An interest on Yi An’s inception date as of September 7, 2009 at book value.
 
Pro forma Blue Bridge Capital, Inc. condensed consolidated statements of operations and other comprehensive income
 
     
Six months
 
     
ended
 
     
June 30, 2010
 
Total revenues
   
$
1,363,871
 
Cost of service
     
13,884
 
Gross profit
     
1,349,987
 
Total operating expenses
     
498,881
 
Income from operations
     
851,106
 
Total other income
     
1,870
 
Income from operations before taxes
     
852,976
 
Income tax expense
     
260,433
 
Net Income
     
592,543
 
        Less: net profit attributable to noncontrolling interests
     
427,591
 
Net Income attributable to BBC’s Stockholders
     
164,952
 
Foreign currency translation gain attributable to BBC
     
18,144
 
Comprehensive Income
   
$
183,096
 
 
NOTE 4.        SHARE TRANSFER AGREEMENT DATED JUNE 18, 2010

On June 18, 2010, BBC entered into another share transfer agreement with the shareholder (“Yi An noncontrolling interest shareholder”) who owned 49% of the issued and outstanding common shares of Yi An. Pursuant to this share transfer agreement, the Yi An noncontrolling interest shareholder will transfer 39% of Yi An’s issued and outstanding common shares to BBC at an aggregate purchase price of RMB 21,642,616, which shall be paid in full within 720 days following June 18, 2010.
 
On October 25, 2010, BBC completed a partial closing of the stock transfer agreement dated June 18, 2010 by paying the Yi An noncontrolling interest shareholder $2,000,000 for 24.37% of Yi An’s issued and outstanding common shares.

On March 25, 2011, BBC completed the remaining closing of the stock transfer agreement dated June 18, 2010 by paying the Yi An noncontrolling interest shareholder $1,261,500 for 14.63% of Yi An’s issued and outstanding common shares. As a result, BBC owns 90% of the issued and outstanding common stock of Yi An. Changes in a parent’s ownership interest in which the parent retains its controlling financial interest in its subsidiary is accounted for as an equity transaction. The carrying amount of the noncontrolling interest was adjusted to reflect the change in BBC’s interest in Yi An. The difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest was adjusted were recognized in BBC’s stockholders’ equity. As a result of the above transaction on purchasing 14.63% of Yi An common shares, BBC’s paid-in capital and accumulated other comprehensive income were increased by $2,117,770 during the six months ended June 30, 2011
 
 
NOTE 5.        DISCONTINUED THE OPERATIONS OF APEXTALK INC.
 
On November 19, 2010, API entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Inno Global Inc. (“Innoglo”), a California company, The Purchase Agreement was effective September 1, 2010 and provided for the transfer of cash equal to $2,753 and gross accounts receivable equal to $ 2,244 net of an allowance for doubtful accounts equal to $395 by API to Innoglo in exchange for the assumption of certain API liabilities by Innoglo. Specifically, Innoglo assumed deferred revenue from API equal to $4,602. The net assets transferred from API to Innoglo were equal to the net liabilities assumed by Innoglo from API. As such, no gain or loss is recognized on the transaction.  Pursuant to the closing of the Purchase Agreement, BBC transferred API’s telecom customers to Innoglo and discontinued its telecom business operations.
 
The following table summarized the assets and liabilities of the discontinued operations, excluding intercompany balances eliminated in consolidated, at June 30, 2011 and December 31, 2010, respectively:
 
             
   
6/30/2011 (Unaudited)
   
12/31/2010
 
Assets in discontinued operations
           
Current assets:
           
    Cash and cash equivalents
 
$
1,469
   
$
1,718
 
    Accounts receivable, net of allowance
   
-
     
-
 
    Total current assets
   
1,469
     
1,718
 
                 
Non-current assets:
               
     Property, plant and equipment, net
   
15,674
     
19,521
 
                 
Total assets in discontinued operations
 
$
17,143
   
$
21,239
 
                 
Liabilities in discontinued operations
               
     Accounts payable
 
$
10,419
   
$
10,419
 
     Accrued expenses
   
40,419
     
40,419
 
                 
Total liabilities in discontinued operations
 
$
50,838
   
$
50,838
 
 
Financial data for the discontinued operations of API for the three and six months ended June 30, 2011 and 2010  are as follows:
 
                         
   
Three Months Ended
   
Six Months Ended
 
   
6/30/2011
   
6/30/2010
   
6/30/2011
   
6/30/2010
 
                         
Revenue
 
$
-
   
$
5,668
   
$
-
   
$
9,398
 
Cost of revenue
   
-
     
(6,779
)
   
-
     
13,884
 
Gross (loss)
   
-
     
(1,111
   
-
     
(4,486
)
Net (loss)
   
(1,941
)
   
(8,226
)
   
(4,097
)
   
(23,612
)
Net (loss) attributable to the Company
 
$
(1,941
)
 
$
(8,226
)
 
$
(4,097
)
 
$
(23,612
)
                                 
Per share information attributable to the Company
                               
Basic and diluted net (loss) per common shares
 
$
(0.00
)
 
$
(0.01
)
 
$
(0.00
)
 
$
(0.02
)
Average common shares outstanding - basic and diluted
   
3,911,951
     
1,653,617
     
3,747,356
     
1,306,277
 
                                 
 
NOTE 6.        SEGMENT INFORMATION
 
Upon the closing of the first acquisition of Yi An, both BBC and Yi An agreed that Yi An would be a subsidiary of BBC as of June 7, 2010.  Therefore, we were involved in two segments of business: investment consulting services in the PRC and value-added telecom service in the U.S.. However, upon the discontinuing operation of API on September 1, 2010, the financial data for the discontinued operations of API for the three and six months ended June 30, 2011 and 2010 is presented in Note 5, and the Company has consulting services segment as its only continuing operation. As the result, no table related to the three and six months ended June 30, 2011 and 2010 segment information is present.
 
 
NOTE 7.        SHORT-TERM ADVANCE TO A RELATED COMPANY

As of June 30, 2011, the Company has a short-term advance of $3,867,873 to Guangzhou China Royal Pawn Co. Ltd. (“China Royal Pawn” see Note 16). Advance to the related company is unsecured, interest free and repayable on demand. The advance was repaid in early July 2011.

NOTE 8.        NOTES RECEIVABLE FROM RELATED COMPANY

As of December 31, 2010, the Company has a loan of $1,851,009 to China Royal Pawn. Loan to the related company is unsecured, interest free and repayable on demand. The loan was repaid in January 2011.
 
NOTE 9.        ENTRUSTED BANK LOANS RECEIVABLE

As of June 30, 2011 and December 31, 2010, Yi An entered into several entrusted loan arrangements with certain bankers in the aggregate amount of $15,780,924and $13,654,984, respectively, in which Yi An acts as the entrusting party, the bankers act as the lender and a related company, acts as the borrower (the “Entrusted bank loans receivable from a related party”).
 
As of June 30, 2011 and December 31, 2010, Hua Ying entered into entrusted loan arrangements in aggregate amount of $5,105,592 and $5,006,827, respectively with banks, in which Hua Ying acts as the entrusting party, the banks act as the lender and two third parties, act as the borrowers (the “Entrusted bank loans receivable”).
 
Entrusted bank loans receivable at June 30, 2011 and December 31, 2010 were as follows:

   
Jun 30, 2011
   
Dec 31, 2010
 
             
Entrusted bank loan receivable from a related party, annual interest rate 8.4% - 22.8%, due from October 2011 through May 2012
  $ 15,780,925     $ 13,654,984  
Entrusted bank loan receivable from a third party, annual interest rate 6% - 11.12%, due from December 2011 through June 2013
    5,105,592       2,427,552  
Entrusted bank loan receivable from a third party, annual interest rate 6%, due December 2011
    -       2,579,275  
      20,886,517       18,661,811  
Less: Current portion
    18,256,364       18,661,811  
Long-term portion
    2,630,153       -  

The interest income arising from the Entrusted bank loans receivable from a related party for the three months ended June 30, 2011 and 2010 was $573,000 and $Nil, respectively, while for the six months ended June, 30, 2011 and 2010 amounted to $1,085,717 and $Nil, respectively.
 
The interest income arising from the Entrusted bank loans receivable from third parties for the three months ended June 30, 2011 and 2010 was $76,939 and $Nil, respectively, while for the six months ended June 30, 2011 and 2010 amounted to $147,162 and $Nil, respectively. 

NOTE 10.        PROPERTY AND EQUIPMENT
 
At June 30, 2011 and December 31, 2010 property and equipment were as follows:
 
   
June 30, 2011 (Unaudited)
   
December 31, 2010
 
             
Computer and Office Equipment
 
$
67,248
   
$
57,138
 
Motor Vehicles
   
698,891
     
338,085
 
 Leasehold Improvement
   
81,222
     
80,705
 
 Less accumulated depreciation
   
(142,888)
     
(69,627)
 
   
$
704,473 
   
$
406,301
 
 
Depreciation expense for the three months ended June 30, 2011 and 2010 was $42,103 and $7,445, respectively, while for the six months ended June, 30, 2011 and 2010 amounted to $73,261 and $7,477, respectively.


NOTE 11.      SHORT TERM NOTE PAYABLE

As of June 30, 2011 and December 31, 2010, the Company has cash advanced from a third party of $2,577,551 and $2,527,689, which is unsecured, interest free and repayable on demand.

NOTE 12.      INCOME TAXES

The Company accounts for income taxes under FASB ASC 740, Income Taxes.  Under FASB ASC 740, clarification is given on the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, FASB ASC 740, Income Taxes, describes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
 
Yi An was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable tax rate is 25% in 2011 and 2010.
 
NOTE 13.       COMMITMENTS

Operating Lease Commitments

Yi An leased office spaces from third parties under an operating lease which expire at various dates from January 2010 through June 30, 2014 at various monthly rent and management fee totaling from $612 to $13,625.

BBC leased office space from a company that owned by the chairman of the Company under an operating lease which expires on December 31, 2011 at a monthly rental rate of $2,500.
 
Marketing fees Commitments

The Company participates in a long-term marketing contractual arrangement with a third party. The future payments related to this contractual arrangement at a monthly rate $15,471 and expires on September 30, 2013.
 
As at June 30, 2011, the Company had an outstanding commitment with respect to the above operating leases and marketing fees, which are due as follows:
 
 Year ending December 31
 
Amount
 
2011
 
$
305,943
 
2012
   
480,963
 
2013
   
402,758
 
2014
   
202,011
 
2015
   
128,745
 
Total
 
$
1,520,420
 
 
NOTE 14.      STOCKHOLDERS’ EQUITY
 
On February 24, 2011, the Company issued 541,667 shares common stock to Foshan Royal Investment Ltd., a New Jersey company, at a purchase price of $2.40 per share, for $1,300,000 in cash.
 
NOTE 15.      STATUTORY RESERVES
 
As stipulated by the relevant laws and regulations for enterprises operating in the PRC, Yi An is required to make annual appropriations to a statutory surplus reserve fund. Specifically,  Yi An is required to allocate 10% of its  profits after taxes, as determined in accordance with the PRC accounting standards applicable to Yi An , to a statutory surplus reserve until such reserve reaches 50% of the registered capital of Yi An. As of December 31, 2010, Yi An provided $969,150 statutory reserve which is included in accumulated earnings of the Company’s Stockholders’ equity.
 
 
NOTE 16.      RELATED PARTY TRANSACTIONS

---Value- added Telecom Service
 
The current U.S. office space is sub-leased from a company that is owned by the chairman of BBC during 2011 and 2010. The rent expense for the three months ended June 30, 2011 and 2010 is $6,500 and $6,000, respectively, while for the six months ended June, 30, 2011 and 2010 amounted to $12,500 and $12,000, respectively.

During the three and six months ended June 30, 2011, the Company paid consultancy fees of $20,000 and $25,000, respectively to a company that is owned by the chairman of the Company.
 
During the three and six months ended June 30, 2010, API accrued compensation for key management personnel for the administrative and managerial services rendered to the company.  The total compensation accrued for the three and six months ended June 30, 2010 is $1,125 and $2,250, respectively.
 
In addition on the compensation for key management personal accrued by API as stated above, for the three and six months ended June 30, 2010, key management personnel contributed administrative and managerial services to BBC with a fair value of $10,400 and $18,300, respectively.
 
---Financial Consultancy services
 
On July 1, 2010, Yi An entered into a two-year strategic alliance agreement with China Royal Pawn, a related company. A director of both BBC and Yi An is also one of the five directors of China Royal Pawn. This director owns shares in BBC, but no shares in Yi An. According to the agreement, Yi An would receive 40% on the fee charged by the related company as referral commission and consultancy fee for risk control services provided regarding the referred clients.
 
During the three and six months period ended June 30, 2011, Yi An received net consultancy fees of $470,951 and $1,182,281, respectively from the related company, China Royal Pawn.  Total accounts receivable of $991,101 and $706,361 from this related company is recorded as of June 30, 2011 and December 31, 2010, respectively.

During the three and six month ended June 30, 2010, Yi An received consultancy fees of $327,725 from China Royal Pawn.
 
As of June 30, 2011, the Company has a short-term advance of $3,867,873 to China Royal Pawn. Advance to the related company is unsecured, interest free and repayable on demand. The advance was repaid in early July 2011.
 
As of June 30, 2011 and December 31, 2010, Yi An entered into several entrusted loan arrangements with certain bankers in the aggregate amount of $15,780,924 and $13,654,984, respectively, in which Yi An acts as the entrusting party, the bankers act as the lender and a related company, acts as the borrower (the “Entrusted bank loans receivable from a related party”). As of June 30, 2011, a Entrusted bank loan receivable from a related party of $3,094,298 bears interest at 20% per annum and the remaining Entrusted bank loans receivable from a related party of $12,686,626 bear interest at 22.8% per annum. As of December 31, 2010, Entrusted bank loans receivable from a related party of $6,068,882 bear interest at 8.4% per annum and the remaining Entrusted bank loans receivable from a related party of $7,586,102 bear interest at 20% per annum. All Entrusted bank loans receivable will be wholly repayable within twelve months from the correspondent dates of the arrangements entered into. The interest income arising from the Entrusted bank loans receivable from a related party for the three months ended June 30, 2011 and 2010 was $573,000 and $Nil, respectively, while for the six months ended June, 30, 2011 and 2010 amounted to $1,085,717 and $Nil, respectively.
 
NOTE 17.       CONCENTRATIONS

As of June 30, 2011, 99% of Company’s net assets are located in the PRC.
 
 
NOTE  18.     LEGAL PROCEEDINGS
 
On December 16, 2010, a third party trading company commenced an action against the Company in the Supreme Court of the State of New York, for compensatory damages and an award of attorney’s fees. In the action, Dongguan Suile Trading Co. Ltd. (“Dongguan”) sought compensatory damages equal to $2,500,383, plus interest and cost, pursuant to the terms of a loan Agreement, in which it alleged the Company had defaulted.
 
On June 7, 2011, Dongguan filed a Stipulation of Discontinuance (the “Stipulation”) for the settlement of the above action filed against the Company. The Stipulation provides for the withdrawal of the action with prejudice and without interest, costs, or disbursements to any party.  

Other than as described above, there are no material legal proceedings to which the Company is a party, or to which any of the Company’s property is subject, that the Company expect to have a material adverse effect on our financial condition.

NOTE 19.     STOCK PURCHASE AGREEMENT DATED NOVEMBER 17, 2009

On December 14, 2009, BBC assisted its then existing shareholders (the “Apextalk Shareholders”)  to close  a portion of a stock purchase agreement (the “Agreement”) with  API, Global Apex Holdings, Inc. (“GAH”), a Delaware corporation whose shareholders were identical to the original Apextalk Shareholders, Global Apex, Inc. (“GAI”), a California corporation and a wholly owned subsidiary of Global Apex Holdings and five individual purchasers set forth in the Agreement (the “Purchasers”).
 
Pursuant to the Agreement, the Apextalk Shareholders agreed to transfer to the Purchasers an aggregate of 413,736 shares of BBC’s common stock (the “Purchased Shares”), representing 90% of the BBC’s issued and outstanding common stock, at an aggregated purchase price of $300,000 (the “Purchase Price”). After the final closing of the Stock Purchase, the Purchasers aggregately hold 90% of the BBC’s issued and outstanding common stock as of Decemb31, 2009.
 
Subject to the terms and condition of the Agreement, BBC will transfer 70% of its equity interest in API to GAI, and BBC will retain the remaining 30% equity interest in API. As of August 10, 2011, the transfer has not completed due to the complications arise from operations and of net assets transfer. BBC is planning to complete this transfer by the end of September 2011.
 
As additional consideration, BBC agreed to grant GAH the right to receive a cash payment in the amount of $30,000 for each $1,000,000 invested into the Company of up to $4,000,000 in the aggregate from outside investors. During 2010, GAH received $120,000 in cash payments from the BBC related to the $4,000,000 common stocks issued to the outside investors during the year ended at December 31, 2010.
 

 
 
The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance.  Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus.  Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
 
Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements, including the risks and uncertainties described below and other factors we describe from time to time in our periodic filings with the U.S. Securities and Exchange Commission (the “SEC”). We therefore caution you not to rely unduly on any forward-looking statements. The forward-looking statements in this report speak only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
 
Corporate History and Structure
 
We are a Delaware company with subsidiaries and affiliate entity in both U.S. and China.

Apextalk Holdings, Inc., (hereinafter referred to as the “Company,” “we,” “us,” or “our”) was incorporated in the State of Delaware on November 7, 2007.   On November 16, 2007 we entered into a share exchange agreement with Apextalk, Inc., a California based corporation, whereby Apextalk, Inc. became our wholly owned subsidiary.  On November 18, 2007, we issued 89,619 common shares (post reverse split) to TLMS International, Inc. and 44,810 common shares (post reverse split) to Spencer Luo for in exchange for an aggregate $111,038 investment in us.
 
On December 16, 2009, we entered into a share transfer agreement by and among the Company, Guangdong Yi An Investment Consulting Co., Ltd (“Yi An”), Ms Weiling Liang, and Mr. Yu Chen.  The share transfer transaction was approved by the Chinese Government on March 9, 2010 and Yi An became a 51% owned subsidiary as of June 7, 2010.  On June 18, 2010, we entered into a new share transfer agreement with Ms Weiling Liang, for the purchase of additional 39% Yi An equity interest, in the amount of approximately $3,200,000 (“Purchase Price”). On March 25, 2011, the Company completed the final partial closing of the transaction and fulfilled its obligation by paying Ms. Liang $1,261,500 or approximately 38.68% of the Purchase Price in exchange for 14.63% of Yi An’s issued and outstanding common stock. As a result, Yi An became a 90% owned subsidiary of the Company. The transaction was duly approved and registered with Bureau of Foreign Trade & Economic Cooperation of Guangzhou Municipality and Administration of Industry & Commerce of Guangzhou Municipality.
 
Yi An was founded in September 2009 and is located in Guangzhou, Guangdong Province in the People’s Republic of China. Yi An is a consulting company which engages in financial consulting, management consulting, and business information consulting.  Yi An provides various services to its clients, including generating customer credit information for use by short-term lenders, and assisting them to establish and improve internal controls and compliance systems and procedures. It currently operates four offices in Guangzhou, Beijing, Foshan and Dongguan.

On April 20, 2011, our Board of Directors unanimously agreed to change our name to Blue Bridge Capital, Inc. and a majority of the shareholders approved the name change. We filed a Definitive Information Statement on Schedule 14C with the SEC on May 9, 2011. We filed the amended articles of incorporation with the state of Delaware on May 30, 2011.

On August 1, 2011, our Board of Directors unanimously agreed to change our name to Sterling Bridge Capital, Inc. and a majority of the shareholders approved the name change. We filed a Preliminary Information Statement on Schedule 14C with the SEC on August 3, 2011 and  a Definitive Information Statement on Schedule 14C with the SEC on August 15, 2011. We will file the amended articles of incorporation with the state of Delaware during September 2011.
 
 
 
Business Overview

In response to the characteristics of the private sector economy and the local financial markets in China, Yi An established a proprietary database which can quickly collect and analyze the market data, clients’ credit and financial information, as well as the latest bank lending data. Together with our well-trained sales and consulting team, we offer world class financial consulting, financial advisory, management consulting, and business information consulting services in the PRC.

The Company plans to expand its business into other developed regions across the nation, in order to diversify our revenue source geographically and take advantage of the rapid growth of the economy in different regions.
 
The institutional client base of Yi An includes: small loan companies, pawn companies, guarantee companies, investment companies and commercial banks. Our basic strategies of developing business relationship with institutional clients are:
 
●  
Focus on developing business relationship with influential financial institution clients in the region;
 
●  
Give priority to institutions which has business models that focus on short term credit,  such as small loan companies and pawn companies;
 
●  
Gradually expand our business focus to guarantee companies, which have more long-term loyal customers and a flexible liquidity raising method;
 
●  
Acquire more commercial bank clients in the future.
 
Since its establishment, Yi An focuses on building relationships with local trade associations, which have members that are influential in the area or are backed by the local governments.  Yi An has quickly obtained strong resource support and converted them into business benefits via cooperation with Guangdong SME Financing Promotion Association and the “SME Investment & Financing Magazine”. The Company steadily develops partnerships with guarantee and pawn associations, finance associations, private associations and departments of local governments.
 
Business Plan
 
Our company goal is to become a major full service provider of financing advisory services in China. Our strategy is to build a strong, well-known, and highly respected brand within the industry.
 
The following outlines our business plan for the next 12 months:
 
1.
The first 90 days, we will continue to focus on our financial advisory consulting service in Beijing and major cities in Guangdong Province in China.
   
 
Yi An is based in Guangzhou, and has vigorously expanded its business throughout the Pearl River Delta and Beijing area since it was founded.
   
 
Based on our year-to-date statistics, we expect Yi An’s consulting service to continue to grow rapidly throughout the year of 2011. To maintain the growing trend, we will continue our customer-relationship- building strategy by sending our sales managers to visit target Small-and-Medium Enterprises (SMEs) Associations in the major cities of China. We currently actively collaborate with trade associations such as Guangdong SME Financial & Listing Promotion Association, and trade magazines such as “SME Investment & Financing Magazine” to acquire new potential clients.
   
2.
During the next 180 days, we will focus on maintaining the rapid growth of Yi An business, as well as improving earnings.
   
 
We will expand our business cooperating partners to other trade associations, such as Guarantee & Mortgage Industry Associations, Finance Associations, Private Industry Associations, Financial Institutions, and Local government offices in many regions.
   
 
We are planning to open additional offices in Shanghai and other major cities located in China. Our new offices will provide the same business consulting services as our current four offices. We expect the opening of these additional offices will expand our business network to the local clients, as well as diversify our source of revenue geographically. Having clients located in different geographic areas helps to diversify and mitigate  the government policy risk, in which we would likely to face if we were concentrated in a single geographic area.
   
 
Results of Operation for the Six Months Ended June 30, 2011 and 2010
   
 
The following table presents certain consolidated statement of operations information for the six months ended June 30, 2011 and 2010. The discussion following the table is based on these results.
 
 
 
 
   
For the Six Months Ended
 
   
June 30,
 
   
2011
   
2010
 
   
 
   
 
 
Consultancy fees earned - from a related company, net
  $ 1,182,281     $ 327,725  
Consultancy fees earned, net
    15,768,228       15,928  
      Total Revenue, net
    16,950,509       343,653  
                 
Operating Expenses
               
Payroll expenses
    334,737       76,594  
Rent and utilities
    155,789       21,060  
General and administrative
    787,578       73,706  
Legal and professional fees
    247,787       130,381  
  Total Operating Expenses
    1,525,891       301,741  
                 
Operating Income
    15,424,618       41,912  
                 
Other Income
               
Gain on bargain purchase of Yi An
    -       306,005  
Interest income from entrusted bank loan receivable
    1,232,879       -  
Interest income
    14,372       180  
    Total Other Income
    1,247,251       306,185  
                 
Income from Continuing Operations before Income Taxes and Discontinued Operations
    16,671,869       348,097  
                 
    Provision for Income Taxes
    (4,164,053 )     (54,927 )
                 
Net Income from Continuing Operations
    12,507,816       293,170  
                 
Discontinued Operations, Net of Taxes
               
     (Loss) from discontinued operations, net of taxes
    (4,097 )     (23,612 )
(Loss) from Discontinued Operations
    (4,097 )     (23,612 )
                 
Net Income
    12,503,719       269,558  
                 
    Less: Income attributable to noncontrolling interests
    2,033,543       110,068  
                 
Net Income attributable to Stockholders
    10,470,176       159,490  
                 
Amounts attributable to Stockholders
               
   Income from continuing operations
    10,474,273       183,102  
   (Loss) from discontinued operations, net of taxes
    (4,097 )     (23,612 )
   Net income
    10,470,176       159,490  
                 
Other Comprehensive Income
               
      Total foreign currency translation gain
    542,345       36,709  
      Less: foreign currency translation gain attributable to noncontrolling interests
    70,459       17,987  
    Foreign currency translation gain attributable to stockholders
    471,886       18,722  
                 
Comprehensive Income
  $ 10,942,062     $ 178,212  
                 
 
Revenue: We generated $16,950,509 in revenue for the six months ended June 30, 2011, representing an increase of $16,606,856 or 4,832%, compared to revenue of $343,653 during the same period in 2010. The increase in revenue was mainly attributable to the revenue generated by our newly-acquired subsidiary, Yi An.  For the six months ended June 30, 2011, 93% of our revenue was generated from consulting services we provided in the areas of business financial consulting, financial advisory, management consulting, and business information consulting to private financial institutions and small-and-medium-sized enterprises in Beijing and major cities in Guangdong Province. The remaining 7% was generated as a result of consulting services we provided to China Royal Pawn for client development and risk management.
 
 
 
Payroll expenses: Payroll expenses were $334,737 for the six months ended June 30, 2011 and $76,594 for the same period in 2010, representing an increase of $258,143 or 337%.  The increase was primarily due to the additional personnel we acquired during the acquisition of Yi An and the expansion of sales team in our offices.
 
Rent and utilities: The rent and utilities were $155,789 for the six months ended June 30, 2011, compared to $21,060 in the same period in 2010, representing an increase of $134,729 or approximately 640%. Our increased expenses for rent and utilities are due to increased office space that we rent to meet our growing needs.
 
General and Administrative Expenses: General and administrative expenses include sales, taxes, start-up expenses, depreciation, advertising, travel and entertainment expenses.  Our general and administrative expenses were $787,578 for the six months ended June 30, 2011, compared to $73,706 for the same period in 2010, representing an increase of $713,872 or 969%.  The increase was primarily due to the expansion of scale and scope of our business after the acquisition of Yi An. 
 
Legal and professional fees: The legal and professional fees were $247,787 for the six months ended June 30, 2011 and $130,381 for the same period in 2010, representing an increase of $117,406 or 90%. The increase was primarily attributable to our need of additional legal, accounting and other professional services as a result of the acquisition of Yi An.
 
Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2010

The following tables set forth key components of our results of operations for the periods indicated, in U.S. dollars, and key components of our revenue for the period indicated, in dollars.
 
   
For the Three Months Ended
 
   
June 30,
 
   
2011
   
2010
 
   
 
   
 
 
Consultancy fees earned - from a related company, net
  $ 470,951     $ 327,725  
Consultancy fees earned, net
    9,377,704       15,928  
      Total Revenue, net
    9,848,655       343,653  
                 
Operating Expenses
               
Payroll expenses
    172,851       48,898  
Rent and utilities
    78,401       15,960  
General and administrative
    448,640       51,083  
Legal and professional fees
    108,912       94,692  
  Total Operating Expenses
    808,804       210,633  
                 
Operating Income
    9,039,851       133,020  
                 
Other Income
               
Gain on bargain purchase of Yi An
    -       306,005  
Interest income from entrusted bank loan receivable
    649,939       -  
Interest income
    11,159       180  
    Total Other Income
    661,098       306,185  
                 
Income from Continuing Operations before Income Taxes and Discontinued Operations
    9,700,949       439,205  
                 
    Provision for Income Taxes
    (2,417,856 )     (53,339 )
                 
Net Income from Continuing Operations
    7,283,093       385,866  
                 
Discontinued Operations, Net of Taxes
               
     (Loss) from discontinued operations, net of taxes
    (1,941 )     (8,226 )
(Loss) from Discontinued Operations
    (1,941 )     (8,226 )
                 
Net Income
    7,281,152       377,640  
                 
    Less: Income attributable to noncontrolling interests
    739,463       110,068  
                 
Net Income attributable to Stockholders
    6,541,689       267,572  
                 
Amounts attributable to Stockholders
               
   Income from continuing operations
    6,543,630       275,798  
   (Loss) from discontinued operations, net of taxes
    (1,941 )     (8,226 )
   Net income
    6,541,689       267,572  
                 
Other Comprehensive Income
               
      Total foreign currency translation gain
    431,277       36,709  
      Less: foreign currency translation gain attributable to noncontrolling interests
    43,103       17,987  
    Foreign currency translation gain attributable to stockholders
    388,174       18,722  
                 
Comprehensive Income
  $ 6,929,863     $ 286,294  
                 


Revenue: We generated $9,848,655 in revenue for the three months ended June 30, 2011, representing an increase of $9,505,002 or 2,766% compared to revenue of $343,653 during the same period in 2010. The increase in revenue was mainly attributable to the revenue generated by our newly acquired subsidiary, Yi An.  For the three months ended June 30, 2011, 95% of our revenue was generated from consulting services we provided in the areas of business financial consulting, financial advisory, management consulting, and business information consulting to private financial institutions and small-and-medium-sized enterprises in Beijing and major cities in Guangdong Province. The remaining 5% was generated as a result of consulting services we provided to China Royal Pawn for client development and risk management.
 
Payroll expenses: Payroll expenses were $172,851 for the three months ended June 30, 2011 and $48,898 for the same period in 2010, representing an increase of $123,953 or 253%.  The increase was primarily due to the additional personnel we acquired after the acquisition of Yi An.
 
Rent and utilities: The rent and utilities were $78,401 for the three months ended June 30, 2011, compared to $15,960 in the same period in 2010, representing an increase of $62,441 or approximately 391%. Our expenses for rent and utilities increased because we increased the rental office space to meet our growing needs.
 
General and Administrative Expenses: General and administrative expenses include sales, taxes, start-up expenses, depreciation, advertising, travel and entertainment expenses.  Our general and administrative expenses were $448,640 for the three months ended June 30, 2011, compared to $51,083 for the same period in 2010, representing an increase of $397,557 or 778%.  The increase was primarily due to the expansion of scale and scope of our business after the acquisition of Yi An. 
 
Legal and professional fees: The legal and professional fees were $108,912 for the three months ended June 30, 2011 and $94,692 for the same period in 2010, representing an increase of $14,220 or 15%. The increase was primarily attributable to our need of additional legal, accounting and other professional services as a result of our acquisition of Yi An.
 
Liquidity and Capital Resources
 
As of June 30, 2011, the Company’s current assets were $38,969,227 and current liabilities were $6,438,845. Cash and cash equivalents totaled $11,842,898 as of June 30, 2011 and the Company’s shareholders’ equity at June 30, 2011 was $27,671,198. The Company had cash provided by operating activities from continuing operations for the six months ended June 30, 2011 of $12,227,956 and cash used in operating activities from continuing operations equal to $60,065 for the same six month period in 2010, respectively. The Company had net cash used in investing activities in continuing operations of $5,721,053 and $3,986,641 for the six months ended June 30, 2011 and 2010, respectively. The Company had net cash provided by financing activities in continuing operations of $1,300,000 and $4,246,314 for the six months ended June 30, 2011 and 2010, respectively. The Company had net cash used in discontinued operations of $250 and $25,311 for the six months end June 30, 2011 and 2010, respectively.
 
Off-Balance Sheet Arrangements
 
We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities.  We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
 
 
 
Critical Accounting Policies
 
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
 
A summary of significant accounting policies is included in Note 2 to the consolidated financial statements included in this quarterly report.  Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company's operating results and financial condition.
 
Recent Accounting Pronouncements
 
Occasionally, new accounting standards are issued or proposed by the FASB, or other standards-setting bodies that we adopt by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.  
 
Subsequent Event
 
On August 1, 2011, our Board of Directors approved a change of our name to “Sterling Bridge Capital, Inc.” Our majority stockholder also approved of the name change on August 1, 2011 by written consent. On August 3, 2011, we filed a Preliminary Information Statement with the SEC regarding the name change. On August 15, 2011, we filed a Definitive Information Statement with the SEC regarding the name change. We expect the name change to be effective in September 2011.
 
 
Not required for smaller reporting companies.
 
 
a)   Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of our second fiscal quarter 2011 pursuant to Rule 13a-15(b) of the Securities and Exchange Act.  Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
 
(b)   Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
 
PART II - OTHER INFORMATION
 
 
On December 16, 2010, Dongguan Suile Trading Co., Ltd. (“Dongguan”) commenced an action against us in the Supreme Court of New York, alleging that we defaulted on terms in an agreement (the “Dongguan Agreement”) between us and Dongguan, entitling Dongguan to compensatory damages and an award of attorney’s fees. In the action, Dongguan sought compensatory damages equal to $2,500,383, plus interest and costs, pursuant to the terms of the Dongguan Agreement.
 
On June 7, 2011, the above legal proceeding was withdrawn by Dongguan with prejudice, and without interest, costs and disbursements to any party.
 
Item 1A.        Risk Factors
 
Not applicable because we are a smaller reporting company.
 
Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds
 
None
 
 
None
 
 
 
None
 
 
(a)                   Exhibits
 
                        31.1 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
 
                        31.2 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
 
                        32.1 Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002
 
                        32.2 Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002
 
        101  Interactive Data File (Form 10-Q for the quarterly period ended June 30, 2011 furnished in XBRL).

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
   
BLUE BRIDGE CAPITAL, INC.
   
Registrant
     
Date: August 15, 2011
 
By: /s/ Hui Liu
   
Hui Liu
   
Chief Executive Officer
(Duly Authorized Officer and Principal Executive Officer)
 
     
Date: August 15, 2011
 
By: /s/ Shan Liu
   
Shan Liu
Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
 

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