UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2011
 
OR
 
¨
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number   000-51048
 
ASIA PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
   
Nevada
47-0855301
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
119 Commercial Street
Suite 190-115, Bellingham
 Washington 98225
98225
(Address of principal executive offices)
(Zip Code)
(360) 392-2841
 
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x    No ¨
 
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 filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer ¨ (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 ¨     No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:   As of 11 November 2011, the issuer had  38,221,362  shares of common stock outstanding .

 
 
 
 
ASIA PROPERTIES, INC.
 
Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2011
 
FORWARD-LOOKING STATEMENTS
 
This Form 10-Q for the quarterly period ended  September 30, 2011 contains forward-looking statements that involve risks and uncertainties.  Forward-looking statements in this document include, among others, statements regarding our capital needs, business plans and expectations.  Such forward-looking statements involve assumptions, risks and uncertainties regarding, among others, the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, our business model and products and other factors.  Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology.  In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties set forth in reports and other documents we have filed with or furnished to the SEC.  These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this document.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.  The forward-looking statements in this document are made as of the date of this document and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

 
- 2 -
 

TABLE OF CONTENTS

FORM 10-Q

QUARTER ENDED SEPTEMBER 30, 2011

PART I

FINANCIAL INFORMATION

 
Page
Item 1. Consolidated Financial Statements (Unaudited)
 
     
 
Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010
4
     
 
Consolidated Statements of Operations for the three and nine month periods ended September 30, 2011 and 2010 and for the period from inception through September 30, 2011
5, 6
     
 
Consolidated Statements of Stockholders’ Deficit for the period from inception through September 30, 2011
7
     
 
Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2011 and 2010 and for the period from inception through September 30, 2011
8
     
 
Selected notes to consolidated financial statements
9
     
Item 2. Management's Discussion and Analysis of  Financial Condition and Results of Operations
11
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk
13
   
Item 4. Controls and Procedures
13

 
- 3 -
 

Asia Properties, Inc.
Balance Sheets
 
   
September 30,
2011
   
December 31,
2010
 
             
Assets
           
Current:
           
Cash
  $ 175     $ 342  
                 
Investment
               
Property rights
  $ 625,000     $ -  
   
 
   
 
 
Total Assets
  $ 625,175     $ 342  
                 
Current:
               
Other payables and accrued liabilities
  $ 122,343     $ 25,441  
Short term bank loans
    46,481       59,263  
Due to related parties
    764,869       618,905  
                 
Total Current Liabilities
    933,693       703,609  
                 
Long term liabilities
               
Long term loans
    47,857       47,879  
                 
Stockholders' Equity (Deficit)
               
                 
Common Stock, $0.001 par value; 200,000,000 shares authorized;
               
38,221,362 and 35,721,362 common shares issued and outstanding
               
at September 30, 2011 and December 31, 2010
    11,948       9,448  
Additional paid-in capital
    3,077,980       2,565,480  
Donated capital
    345,000       345,000  
Deficit accumulated during the development stage
    (3,791,303 )     (3,671,074 )
Total Stockholders' Equity (Deficit)
    (356,375 )     (751,146 )
                 
Total Liabilities and Stockholders' Equity (Deficit)
  $ 625,175     $ 342  

See accompanying notes to the financial statements

 
- 4 -
 

Asia Properties, Inc.
 
Consolidated Statements of Operations
(Unaudited)

   
For The
Three Months
Ended
September 30,
2011
   
For The
Three Months
Ended
September 30,
2010
 
             
Revenue
  $ -     $ -  
                 
Operating expenses
               
General and administrative
    32,814       21,341  
Management fees
    15,000       15,000  
Professional fees
    -       -  
Consulting
    9,836       -  
Total operating expenses
    57,650       36,341  
                 
Loss from operations
    (57,650 )     (36,341 )
                 
Net loss
  $ (57,650 )   $ (36,341 )

See accompanying notes to the unaudited consolidated financial statements.

 
- 5 -
 

Asia Properties, Inc.
 
Consolidated Statements of Operations
(Unaudited)

   
For The
Nine Months
Ended
September 30,
2011
   
For The
Nine Months
Ended
September 30,
2010
   
For The Period From
April 6, 1998
(Inception ) Through
September 30,
2011
 
                   
Revenue
  $ -     $ -     $ (46,342 )
                         
Operating expenses
                       
General and administrative
    65,393       52,735       1,809,473  
Management fees
    45,000       45,000       1,208,614  
Professional fees
    -       -       783,469  
Consulting
    9,836       45,000       145,082  
Total operating expenses
    120,229       142,735       3,946,638  
                         
Loss from operations
    (120,229 )     (142,735 )     (3,992,980 )
                         
Interest income
    -       -       3,294  
Disposal of subsidiary
    -       -       27,120  
Gain on settlement of debt
    -       -       178,307  
Income taxes recovered
    -       -       595  
Write-down of property and equipment
    -       -       (7,639 )
                         
Net loss
  $ (120,229 )   $ (142,735 )   $ (3,791,303 )
                         
Weighted average number of shares outstanding – basic and diluted
    36,083,999       35,593,157          
Net loss per share - basic and diluted
  $ (0.003 )   $ (0.004 )        

See accompanying notes to the unaudited consolidated financial statements.

 
- 6 -
 

Asia Properties, Inc.
Statements of Stockholders’ Deficit
From December 31, 2004 Through September 30, 2011
      
      Common  Stock    
Additional
Paid In
   
Donated
             
   
Number of
   
Amount
   
Capital
   
Capital
   
Deficit
   
Total
 
   
shares
    $     $     $     $     $  
Balance December 31, 2004
    7,519,028       7519       1,729,509       270,000       (2,064,981 )     (57,953 )
Issued for services at $0.26 per share
    40,000       40       10,360       -       -       10,400  
Issued for services at $0.50 per share
    50,000       50       24,950       -       -       25,000  
Issued for properties at $0.50 per share
    600,000       600       299,400       -       -       300,000  
Issued for properties at $1.45 per share
    45,000       45       159,955       -       -       160,000  
Issued for properties at $2.55 per share
    350,000       350       899,650       -       -       900,000  
Issued for cash at $0.50 per share
    1,050,000       1,050       523,950       -       -       525,000  
Finders fee paid
    -       -       (25,000 )             -       (25,000 )
Donated capital
    -       -       -       60,000       -       60,000  
Net loss for the year
    -       -       -       -       (247,792 )     (247,792 )
                                                 
Balance, December 31, 2005
    9,654,028       9,654       3,622,774       330,000       (2,312,773 )     1,649,655  
                                                 
Option exercised for cash at $1.00 per share
    40,000       40       39,960       -       -       40,000  
Issued for cash at $1.00
    105,000       105       104,895       -       -       105,000  
Donated capital
    -       -       -       15,000       -       15,000  
Net loss for the year
    -       -       -       -       (252,278 )     (252,278 )
                                                 
Balance December 31, 2006
    9,799,028       9,799       3,767,629       345,000       (2,565,051 )     1,557,377  
                                                 
Issued for cash at $1.00
    55,000       55       54,945       -       -       55,000  
Finders fee paid
    2,750       3       2,747       -       -       2,750  
4 for 1 split on 16 April
    29,570,334       -       -       -       -       -  
Net loss for the year
    -       -       -       -       (298,260 )     (298,260 )
                                                 
Balance December 31, 2007
    39,427,112       9,857       3,825,321       345,000       (2,863,311 )     1,316,867  
                                                 
Issued for cash at $0.20
    225,000       225       44,775       -       -       45,000  
Finders fee paid
    11,250       11       2,239       -       -       2,250  
Cancelled due to unsuccessful transfer of property rights
    (3,940,000 )     (985 )     (1,323,460 )     -       -       (1,324,445 )
Net loss for the year
    -       -       -       -       (513,977 )     (513,977 )
                                                 
Balance December 31, 2008
    35,723,362       9,108       2,548,875       345,000       (3,377,288 )     (474,305 )
                                                 
Cancelled due to unsuccessful transfer of property rights
    (40,000 )     (10 )     (35,545 )     -       -       (35,555 )
Net loss for the period
    -       -       -       -       (114,528 )     (114,528 )
                                                 
Balance December 31, 2009
    35,371,362       9,098       2,513,330       345,000       (3,491,816 )     (624,388 )
                                                 
Issued for services
    350,000       350       52,150       -       -       52,500  
Net loss for the period
    -       -       -       -       (179,258 )     (179,258 )
                                                 
Balance December 31, 2010
    35,721,362       9,448       2,565,480       345,000       (3,671,074 )     (751,146 )
                                                 
Issued for properties at $0.05 per share
    500,000       500       24,500       -       -       25,000  
Issued for properties at $0.245 per share
    2,000,000       2,000       488,000       -       -       490,000  
Net loss for the period
    -       -       -       -       (120,229 )     (120,229 )
                                                 
Balance September 30, 2011
    38,221,362       11,948       3,077,980       345,000       (3,791,303 )     (356,375 )

See accompanying notes to the unaudited consolidated financial statements.

 
- 7 -
 

Asia Properties, Inc.
Statements of Cash Flows
      
(Stated in US Dollars)
         
   
For the 9
months ended
30 September
2011
   
For the year ended
31 December 2010
   
Cumulative total
since inception
 
Cash flows used in operating activities
                 
Net loss
    (120,229 )     (179,258 )     (3,791,303 )
Adjustments to reconcile net loss to net cash used in operating activities
                       
Amortized property rights
    -       -       97,309  
Cancellation of shares issued for property rights
    -       -       (1,360,000 )
Deferred assets amortized
    -       -       12,507  
Depreciation
    -       -       12,599  
Donated management services
    -       -       345,000  
Gain on settlement of debt
    -       -       (178,307 )
Gain on disposal of subsidiary
    -       -       -  
Investment written off
    -       -       20,000  
Property rights written off
    -       -       1,637,900  
Shares issued for services rendered
            52,500       808,776  
Write down of investment to NRV
    -       -       37,400  
Write down of property and equipment
    -       -       7,639  
Changes in operating assets and liabilities
                       
Increase/ (decrease) in short term loans
    (12,782 )     (16,637 )     34,882  
Increase in prepaid expenses and deposits
    -       -       -  
Increase in payables and accruals
    96,902       7,634       455,258  
Net cash used in operating activities
    (36,109 )     (135,761 )     (1,860,340 )
                         
Cash flow used in investing activities
                       
Property rights acquired for resale
    -       -       (375,209 )
Increase in deferred assets
    -       -       (12,507 )
Purchase of property and equipment
    -       -       (20,238 )
Purchase of securities
    -       -       (20,000 )
Purchase of investment
    (625,000 )     -       (652,000 )
Net cash used in investment activities
    (625,000 )     -       (1,079,954 )
                         
Cash flows from financing activities
                       
Issuance of stock
    515,000       -       1,921,600  
Increase in long term loan
    (22 )     (9 )     59,474  
Advances from related party
    145,964       132,484       959,413  
Net cash provided by financing activities
    660,942       132,475       2,940,469  
                         
Net increase/ (decrease) in cash
    (167 )     (43,286 )     175  
Cash, beginning of year
    342       3,628       -  
Cash, end of year
    175       342       175  
See accompanying notes to the financial statements.

 
- 8 -
 

Asia Properties, Inc.

Notes to the Financial Statements
September 30, 2011
(Unaudited)
           
              
1.
Basis of Presentation
The accompanying unaudited interim financial statements of Asia Properties, Inc., have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Asia Properties’ Annual Report filed with the SEC on Form 10-KSB.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2010 as reported in the form 10-KSB have been omitted.

Principles of Consolidation

The consolidated financial statements include the accounts of Asia Properties and its 100% owned subsidiary, Asia Properties (HK) Limited that was registered in Hong Kong on November 7, 2007, after elimination of all significant inter-company accounts and transactions.

2 .
Going Concern

Planned principal activities have begun but Asia Properties has not generated significant revenues to date. The company had a net loss of $120,229 and had a working capital and stockholders’ deficit of $356,375 at September 30, 2011. These matters raise substantial doubt about Asia Properties’ ability to continue as a going concern. Continuation of Asia Properties' existence depends upon its ability to obtain additional capital. Management’s plans in regards to this matter include receiving continued financial support from directors and raising additional equity financing in 2011. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

3.
Related Party Transactions

For the nine months ended September 30, 2011, Asia Properties accrued $45,000 salary to its CEO.  As of September 30, 2011, Asia Properties owed its CEO $764,869 in expense reimbursements and unpaid salary.

 
- 9 -
 

Notes to the Financial Statements (continued)

4.
Shareholders’ Equity

The following table summarizes common stock issuances and retirements as of September 30, 2011:

         
Common
 
   
Number of
Shares
   
Stock
Amount
 
             
Balance as of December 31,   2008
    39,411,362     $ 9,108  
Shares cancelled
    (40,000 )     (10 )
                 
Balance as of December 31,   2009
    35,371,362     $ 9,098  
Shares issued for services
    350,000       350  
                 
Balance as of December 31, 2010
    35,721,362     $ 9,448  
                 
Shares issued for properties acquired
    2,500,000       2,500  
                 
Balance as of September 30, 2011
    38,221,362       11,948  

 
a)
On August 30, 2011 the Company issued 2,000,000 shares for another fifty-three gold claims in Newfoundland, Canada.
 
b)
On July 18, 2011 the Company issued 500,000 shares for sixteen gold claims in Quebec, Canada.
 
c)
On April 10, 2010 the Company issued 350,000 shares for services rendered.
 
d)
On December 31, 2009 the Company cancelled 40,000 shares issued in 2005 for the Thailand land purchase as a result of the non-delivery of title.

5.
Commitments
The Company is committed to pay C$100,000 for fifty-three gold claims in Newfoundland, Canada that it acquired on August 30 h 2011.

6.
Subsequent Events

The Company has engaged consultants to oversee mineral exploration work on its sixty-nine Canadian claim sites, namely Banroy and King’s Point.
The Company is also actively seeking to acquire mining properties in the Philippines and has signed a Non-disclosure agreement for 42,000 hectares of gold claims in Mindanao.

 
- 10 -
 
 
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operation.
 
Asia Properties, Inc was established to seek opportunities to invest in real estate and develop resorts in South East Asia.  The Company has in July, 2011 restructured itself into a junior mining exploration company

At the moment, it intends to deploy Asian based capital to develop and acquire mining assets in North America and other favorable mining jurisdictions.

The Company is not highly leveraged and expects to be able to capitalize on suitable possibilities when identified.

 
- 11 -
 
 
Limited Operating History; Need for Additional Capital
 
There is no historical financial information about us upon which to base an evaluation of our performance. We have no revenue generating assets. We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services.
 
We will require additional financing to cover our costs that we expect to incur over the next twelve months.  We believe that debt financing will not be an alternative for funding our operations as we do not have tangible assets to secure any debt financing.  We anticipate that additional funding will be in the form of equity financing from the sale of our common stock.  However, we cannot provide any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations.  In the absence of such financing, we will not be able to continue and our business plan will fail.
 
Results of Operations
 
Revenues
 
We have not generated any revenues from our operations during the nine-month period ended September 30, 2011 or during last two years.
 
Expenses
 
We incurred general and administrative expenses of $65,393 for the nine-month period ended September 30, 2011, as compared to $52,735 for the same period in 2010, an increase of $12,658 or 24%.
 
Our management fees remained the same at $45,000 for the nine-months ended September 30, 2011 as for last year.
 
We did not incur any consulting or professional fees during either quarter.
 
Liquidity and Capital Resources
 
As at September 30, 2011, we had cash of $175.
 
Cash Used in Operating Activities
 
Net cash used in operating activities was $36,109 for the nine-month period ended September 30, 2011.  For the same period in 2010, there was net cash used of $43,662.  For the period from April 6, 1998 (inception) to September 30, 2011, net cash used in operating activities was $1,860,340.
 
Cash Used in Investing Activities
 
Net investing activities was $625,000 during the quarter under review and $1,079,954 for the period from April 6, 1998 (inception) to September 30, 2011.
 
Cash from Financing Activities
 
We have funded our business to date primarily from sales of our common stock but did not sell any common stock during the nine months ended September 30, 2011. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.  If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our operations and our business will fail.

 
- 12 -
 
 
Going Concern
 
We are a development stage company.  In a development stage company, management devotes most of its activities to developing a market for its products and services.  Planned principal activities have begun, but we have not generated revenues to date.
 
Future Financing
 
We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations.  Issuances of additional shares will result in dilution to our existing shareholders.  There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned operations.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable.
 
Item 4.  Controls and Procedures.

Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, 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 management, including the our Chief Executive Officer (as our chief executive officer and chief financial officer), to allow timely decisions regarding required disclosures.  In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  As of the end of the period covered by this report, and under the supervision and with the participation of management, including our Chief Executive Officer, who is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, such persons conducted an evaluation of the effectiveness of the design and operation of these disclosure controls and procedures.  Based on this evaluation and subject to the foregoing, our Chief Executive Officer concluded that these controls are not effective because there are material weaknesses in our internal controls over financial reporting.  A material weakness is a deficiency, or a combination of control deficiencies, in internal control over reporting such that there is a reasonable possibility that that a material misstatement our annual or interim financial statements will not be prevented or detected on a timely basis.
 
Changes in Internal Control Over Financial Reporting
 
During the period covered by this report, there have not been any changes in the our internal controls that have materially affected or are reasonably likely to materially affect, the our internal control over financial reporting.  However, please note the discussion above.

 
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PART II - OTHER INFORMATION
 
Item 1.  Legal Proceedings.
 
We are not presently a party to any legal proceedings and, to our knowledge, no such proceedings are threatened or pending.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

No stock was sold for valuable consideration during the nine months ended September 30, 2011.
 
Item 3.  Defaults Upon Senior Securities.
 
None.
 
Item 4.  Submission of Matters to a Vote of Security Holders.
 
No matters were submitted to our security holders for a vote during the nine months ended September 30, 2011.
 
Item 5.  Other Information.
 
None.
 
Item 6.  Exhibits.
 
The following exhibits are attached hereto:

Exhibit No.
 
Description of Exhibit
     
10.7
 
Claim Acquisition Agreement between Asia Properties, Inc. and Banroy Resources dated July 18, 2011
     
31.1
 
Certification of principal executive officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith
     
32.1
 
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
     
99.1
  
Official Claims Certificate No. 87311 issued by the Province of Quebec, Canada dated September 22, 2100

 
- 14 -
 
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASIA PROPERTIES, INC.
 
   
By:
 
   
/s/ Daniel Mckinney
 
Daniel Mckinney
 
Chief Executive Officer
 
   
and
 
   
/s/ Gilbert Loke
 
Gilbert Loke
 
Chief Financial Officer)
 
   
November 21, 2011
 

 
 
 
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