# RTB Digital, Inc.: Form 10-Q for the period ended Sep 30, 2010

- Company: [RTB Digital, Inc.](/companies/rtb.md) (CIK 1419275)
- Form: 10-Q
- Filed: 2010-11-19
- Accepted by EDGAR: Nov 19, 2010, 16:27 ET
- Period: 2010-09-30
- Accession: 0001185185-10-001361
- Inline XBRL: no
- Main document: https://www.sec.gov/Archives/edgar/data/1419275/000118518510001361/asapexpo10q093010.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1419275/000118518510001361/

## Management's discussion and analysis

As filed, 13,865 characters.

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report for the period ended September 30, 2010. This quarterly report contains certain forward-looking statements and the Company's future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

### OVERVIEW

ASAP Expo provides investment banking, management consulting and global trading services to Chinese companies. The mission is to bridge the China and the Western world.

The Investment Banking Services division helps Chinese companies list on the public trading markets in the USA or Europe. In 2008, ASAP Expo entered the Germany Frankfurt Exchange and established its presence in the Deutsche Boerse Open Market. The products we created are capable of proving our clients, especially small and median size companies, the opportunity to access international capital markets. Our mission is to provide our clients including start ups an early stage developments with the services that will assist them in the “first step” in becoming a public company.

Management Consultant division assists our own portfolio companies to meet Western management standards and enhance its value in the public market arena.

Global Business Services division provides consulting to entities seeking business opportunities in the U.S, Europe, and China. Its Global Trade Services (GTS) provides the following services:

1\) Resources for buyers.

2\) Quality inspection and assurance.

3\) Logistics, including ocean or air shipment, and door to door service.

4\) Finance assistance including opening Letter of Credits (LC) for the buyer to purchase the merchandise.

5\) LDP (Landed Duty Paid) quotations and payment terms for all the merchandise.

### RESULTS OF OPERATIONS

### Three and Nine Months Ended September 30, 2010 and 2009

### Revenue

The tradeshow revenue for the three and nine months ended September 30, 2010 was $0 and $0 compared to $49,234 and $112,853 for the same periods last year, respectively. This decrease was due to the Company’s transitioning into providing investment banking, management consulting and global trading services.

Revenue from the consulting services for the three and nine months ended September 30, 2010 was $0 and $0 compared to $0 and $76,489 for the same periods last year, respectively. The company anticipates revenue from consulting services in future periods because the Company has been allocating most of its resources and efforts to monetize its knowledge and relationship between West and East.

During the three and nine months ended September 30, 2010, the Company provided office space and staff to help ASAP Hotel start up its business operations, accordingly, charged a management fee of $21,000 and $63,000, respectively. There was no management fee income for the three and nine months ended September 30, 2009.

### Operating Expenses

For the three and nine months ended September 30, 2010, general and administrative expenses consist primarily of administrative personnel costs, facilities expenses, and travel expenses. For the three and nine months ended September 30, 2009, general and administrative expenses consist primarily of ASAP Global Sourcing show production costs, attendee marketing programs, and exhibitors' promotion costs.

General and administrative expenses was $19,907 for the three months ended September 30, 2010, as compared to negative $34,673 for the same period last year. The negative general and administrative expenses for the three months ended September 30, 2009 was due to adjustments in the period to reclassify payments made in prior periods for ASAP Hotel’s start-up costs from “expense” to “due from affiliated companies”. For the nine months ended September 30, 2010, general and administrative expenses decreased by $47,755 or 32.8% to $97,676 compared to $145,431 for the same period last year. The decrease in general and administrative expenses was primarily due to the elimination of ASAP Show production expenses as the Company exited this line of business. ASAP Show production expenses were $0 and $0 for the three and nine months ended September 30, 2010 compared to negative $67,382 and $34,489 for the same periods last year, respectively. ASAP Show production expenses were negative $67,382 for the three months ended September 30, 2009 due to adjustments in the period to reclassify payments made in prior periods for ASAP Hotel’s start-up costs from “expense” to “due from affiliated companies”.

Payroll and related benefits increased by approximately $22,409 or $30.5% to $95,883 for the three months ended September 30, 2010 from $73,474 for the same period last year. For the nine months ended September 30, 2010, payroll and related benefits increased by $106,477 or 60.1% to $283,747 compared to $177,270 for the same period last year. The increase was primarily because in the three and nine months ended September 30, 2009, a portion of executive and administrative staff pay was covered by the Company’s affiliates, IBMC and ASAP Hotel, which used the Company’s executive and administrative staff for their operations.

### Interest Expense

Interest expense increased to $37,464 during the three months ended September 30, 2010 from $25,575 for the same period last year, and increased to $94,748 during the nine months ended September 30, 2010 from $78,202 for the same period last year. The increases in the three and nine months ended September 30, 2010 were due to higher average balances of the officer line of credit.

### Income Taxes

Income taxes for the nine months ended September 30, 2010 were $800 compared to $1,698 for the same period last year. The income taxes for the nine months ended September 30, 2009 were the under-accrued income taxes on the year 2008 taxable income resulting from the consulting fee received in the last quarter of 2008.

### Net Loss

The Company recorded a net loss of $132,254 and $413,971 for the three and nine months ended September 30, 2010 as compared to a net loss of $15,056 and $213,073 for the same periods last year, respectively. The increases in the net losses were mainly due to the decrease in revenues, increase in payroll and related benefit which was partly offset by the reduction in trade show production expenses.

### LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital deficit was $758,336 at September 30, 2010, as compared to $643,531 at December 31, 2009. During the nine months ended September 30, 2010, the Company had average monthly general and administrative expenses of approximately $10,853, as compared to $30,830 (excluding ASAP Show production expenses) for the nine months ended September 30, 2009. During the next twelve months, ASAP Expo will focus on its investment banking, management consulting and global trading services to generate additional revenue. With the net revenue from its services, and continuing support from its major shareholders to provide a revolving line-of-credit, management believes ASAP Expo will have enough net working capital to sustain its business for another 12 months.

The Company has a revolving line-of-credit (the "Yuan Line of Credit") from Frank Yuan, the Company's CEO and certain members of his family, which is due upon demand, and provides for borrowings up to a maximum total of $1,500,000, as amended. The Yuan Line of Credit carries an interest rate of 10.0% per annum. The total balance as of September 30, 2010 was $1,290,667, and the accrued and unpaid interest was $140,408.

The forecast of the period of time through which ASAP Expo’s financial resources will be adequate to support its operations is a forward-looking statement that involves risks and uncertainties. ASAP Expo’s actual funding requirements may differ materially as a result of a number of factors, including unknown expenses associated with the cost of providing investment banking, management consulting and global trading services.

ASAP Expo has no commitments to make capital expenditures for the fiscal year ending December 31, 2010.

Over the next two to five years, ASAP Expo plans to utilize a combination of internally generated funds from operations and potential debt and equity financing to fund its long-term growth.

The Report of the Company's Independent Registered Public Accounting Firm on our December 31, 2009 financial statements includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The financial statements do no include any adjustments that might result from the outcome of this uncertainty.

At the present time, we have received no commitments for the funds required for our planned capital investments. Obtaining those funds, if we can do so, will require that we issue substantial amounts of equity securities or incur significant debts. We believe that the expected return on those investments will justify the cost. However, our plan, if accomplished, will significantly increase the risks to our liquidity.

### CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the our financial statements and the accompanying notes. The amounts of assets and liabilities reported on our balance sheet and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, stock based compensation and the valuation of deferred taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:

### Revenue Recognition

Accounting Standards Codification (“ASC”) 605, "Revenue Recognition" outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with Securities and Exchange Commission. Management believes the Company's revenue recognition policies conform to ASC 605.

Revenues include amounts earned under trade show booth sales and consulting fee.

### Trade Shows

Trade shows generate revenue through exhibitor booths sales, corporate sponsorship, and advertising. Such revenue is typically collected in advance, deferred and then recognized at the time of the related trade show.

### Consulting Fees

The Company acted as a consultant for international brands to enter the China market. For this service, the Company charged international brands a consultant fee. The fee is based upon hours serviced and an upfront retainer fee. The Company also receives a portion of royalty revenue from the brand for sales above and beyond a pre-specified minimum guarantee. The Company recognizes its Consultant fees and Royalty revenue when they are received.

In addition, the Company provides advisory services for companies wanting to become publicly traded and raise capital in the United States or Europe. Consulting fees received for providing advisory services are subject to refund until the client becomes publicly traded in the United States or Europe, thus are recorded as deferred revenue until the fees are no longer refundable.

### Income Taxes

The Company accounts for income taxes under ASC 740, "Income Taxes." Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Management provides a valuation allowance for significant deferred tax assets when it is more likely than not that such asset will not be recovered.

### New Accounting Pronouncements

In April 2010, the FASB issued the amendment to ASC Topic 718, “*Compensation – Stock Compensation”*, which provides clarification that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade should not be considered to contain a condition that is not a market, performance, or service condition. As a result, an entity would not classify such an award as a liability if it otherwise qualifies as equity. This topic will be effective for periods beginning on or after December 15, 2010. The Company has not elected to early adopt this topic and is evaluating the impact that this topic will have on the Company’s financial statements.

## Market risk

As filed, 3,045 characters.

(a) Evaluation of Disclosure Controls and Procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures. Based upon that evaluation, the CEO and CFO concluded that as of June 30, 2010 our disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company required to be included in the Company's periodic filings with the SEC, subject to the various limitations on effectiveness set forth below under the heading, "LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS," such that the information relating to the Company, required to be disclosed in SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure." (b) Changes in internal control over financial reporting. There has been no change in the Company's internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS The Company's management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, and/or the degree of compliance with the policies or procedures may deteriorate.

Filed Nov 19, 2010.
Source: SEC EDGAR, the filing index for accession 0001185185-10-001361. Last ingested by Listed: Nov 4, 2026, 18:58 ET. No prices; not investment advice.