Aspire Japan 10Q 2011 Q2 Quarterly report

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 July 31, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

ASPIRE JAPAN, INC.

(Exact name of registrant as specified in Charter

Delaware		000-51193		20-8326081
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

5757 W. Century Blvd., Suite 700

Los Angeles, CA 90045

(Address of Principal Executive Offices)

_______________

(310) 348-7255

(Issuer Telephone number)

_______________

(Former Name or Former Address 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 Exchange Act 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 o 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 filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o 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 x No o

State the number of shares outstanding of each of the issuer’s classes of common equity, as of as of September 10 2010: 7,854,150 shares of Common Stock.

ASPIRE JAPAN, INC.

FORM 10-Q

July 31, 2010

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4T.	Control and Procedures	17


PART II--OTHER INFORMATION

Item 1	Legal Proceedings	18
Item 1A	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	(Removed and Reserved)	18
Item 5.	Other Information	18
Item 6.	Exhibits	18

SIGNATURE

Item 1. Financial Statements

Aspire Japan, Inc.

(A Development Stage Company)

CONDENSED BALANCE SHEETS

	July 31,			January 31,
	2010			2010
	(Unaudited)
ASSETS

CURRENT ASSETS

Cash	$	366		$	388
Prepaid expense		2,656			545

TOTAL CURRENT ASSETS		3,022			933

OTHER ASSETS

Deposits		475			475

TOTAL ASSETS	$	3,497		$	1,408

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable and accrued expenses	$	18,600		$	20,353
Accrued interest		84,337			97,447
Accrued interest - related party		10,493			9,167
Judgement payable		1,091,033			1,049,719
Severance payable		236,730			236,730
Notes payable		263,178			370,206
Loans payable -related party		59,237			21,093

TOTAL CURRENT LIABILITIES		1,763,608			1,804,715

LONG TERM LIABILITIES
Notes payable		107,028			-
Accrued interest		47,468			-

TOTAL LIABILITIES	$	1,918,104		$	1,804,715

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' DEFICIT

Preferred Stock - Par value $.001;
Authorized: 50,000,000
Issued and Outstanding: none		-			-
Common Stock - Par value $0.001;
Authorized: 100,000,000
Issued and Outstanding:7,854,150 and 7,854,150 respectively		7,854			7,854
Additional Paid-In Capital		1,724,396			1,679,396
Other Comprehensive Loss		(5,078	)		(5,078	)
Accumulated Deficit during development stage		(3,641,779	)		(3,485,479	)

Total Stockholders' Deficit		(1,914,607	)		(1,803,307	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	3,497		$	1,408

The accompanying notes are an integral part of these unaudited financial statements.

Aspire Japan, Inc.

(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)





													For the period
	For the Three Months Ended July 31,						For the Six Months Ended July 31,						February 2, 2005 (Inception) to
	2010			2009			2010			2009			July 31, 2010


Revenue	$	-		$	-		$	-		$	-		$	-

Operating Expenses

Professional Fees		11,508			23,595			23,029			23,721			396,346
Marketing Expenses		-			-			-			-			156,562
Consulting Fees		-			-			-			-			216,510
Compensation Expense		22,500			22,500			45,000			45,000			506,031
Severance Expense		20,999			-			41,314			-			1,357,763
General and administrative		7,336			3,113			10,793			4,108			900,115

Total Operating Expenses		62,343			49,208			120,136			72,829			3,533,327

Loss from Operations		(62,343	)		(49,208	)		(120,136	)		(72,829	)		(3,533,327	)

Interest Income		-			-			-			-			2,631
Foreign Currency Transaction Loss		(393	)		(2,547	)		(510	)		(2,549	)		(7,369	)
Gain on liquidated damages		-			-			-			-			84,949
Interest Expense		(18,038	)		(15,745	)		(35,654	)		(27,976	)		(188,663	)

Total Other Income/(Expense)		(18,431	)		(18,292	)		(36,164	)		(30,525	)		(108,452	)

Provision for Income Taxes		-			-			-			-			-

Net Loss		(80,774	)		(67,500	)		(156,300	)		(103,354	)		(3,641,779	)

Other Comprehensive Income / (Loss)
Other Comprehensive Income		-			-			-			-			61
Foreign Currency Translation Loss		-			-			-			-			(5,139	)

Comprehensive Loss	$	(80,774	)	$	(67,500	)	$	(156,300	)	$	(103,354	)	$	(3,646,857	)

Net Loss Per Share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.01	)

Weighted average number of shares outstanding		7,854,150			7,854,150			7,854,150			7,854,150
during the period - basic and diluted

The accompanying notes are an integral part of these unaudited financial statements.

Aspire Japan, Inc.

(A Development Stage Company)

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

From inception (February 2, 2005) through July 31, 2010

(Unaudited)

											Accumulated
											Deficit
	Preferred Stock				Common Stock				Additional Paid In		During Development			Other Comprehensive Income			Total Equity /
	Shares		Par		Shares		Par		Capital		Stage			(Loss)			(Deficit)

Stock Issued in exchange
of incorporation expenses
February 2, 2005		-	$	-		100,000	$	100	$	-	$	-		$	-		$	100

Net Loss for the period
February 2, 2005 (inception)
to January 31, 2006												(2,225	)		-			(2,225	)

Balance, January 31, 2006		-		-		100,000		100		-		(2,225	)		-			(2,125	)

Stock Issued for cash on
September 15, 2006 at $0.001
per share from private placement		-		-		6,700,000		6,700		-		-			-			6,700

Stock Issued for cash on
November 6, 2006 at $1.00		-		-		275,000		275		274,725		-			-			275,000
per share from private placement

In Kind contribution		-		-		-		-		7,000		-			-			7,000

Net Loss		-		-		-		-		-		(37,393	)		-			(37,393	)

Balance, January 31, 2007		-		-		7,075,000		7,075		281,725		(39,618	)		-			249,182

Stock Issued for cash on
April 16, 2007 at $1.00
per share from private placement		-				20,000		20		19,980		-			-			20,000

Stock Issued for cash on
April 18, 2007 at $1.00
per share from private placement		-				10,000		10		9,990		-			-			10,000

Stock Issued for cash on
April 19, 2007 at $1.00
per share from private placement		-				15,000		15		14,985		-			-			15,000

Stock Issued for cash on
April 20, 2007 at $1.00
per share from private placement		-				30,000		30		29,970		-			-			30,000

Stock Issued for cash on
April 25, 2007 at $1.00
per share from private placement		-				260,000		260		259,740		-			-			260,000

Stock Issued for cash on
April 26, 2007 at $1.00
per share from private placement		-				100,000		100		99,900		-			-			100,000

Stock Issued for services in
April 2007 at $1.00		-				100,000		100		99,900					-			100,000

Stock Issued in exchange
for legal expenses
June 30, 2007 at $1.00		-				50,000		50		49,950		-			-			50,000

In Kind contribution		-				-		-		51,000		-			-			51,000

Net Loss for the year		-				-		-		-		(2,108,895	)		-			(2,108,895	)
ended January 31, 2008

Other Comprehensive Income / (loss)		-				-		-		-		-			(5,139	)		(5,139	)

Total Comprehensive Loss																		(2,114,034	)

Balance, January 31, 2008		-		-		7,660,000		7,660		917,140		(2,148,513	)		(5,139	)		(1,228,852	)

In Kind contribution		-		-		-		-		90,000		-			-			90,000

Converison on notes payable
and accrued interest to
common stock at $3.00 per share		-		-		194,150		194		582,256		-			-			582,450

Net Loss for the year
ended January 31, 2009		-		-		-				-		(1,282,167	)					(1,282,167	)

Other Comprehensive Income															61			61

Total Comprehensive Loss																		(1,282,106	)
Balance January 31, 2009		-	$	-		7,854,150	$	7,854	$	1,589,396	$	(3,430,680	)	$	(5,078	)	$	(1,838,508	)

In Kind contribution		-		-		-		-		90,000		-			-			90,000

Net Loss for the year ended
January 31, 2010		-		-		-				-		(54,799	)					(54,799	)

Other Comprehensive Income																		-

Total Comprehensive Loss																		(54,799	)
Balance January 31, 2010		-	$	-		7,854,150	$	7,854	$	1,679,396	$	(3,485,479	)	$	(5,078	)	$	(1,803,307	)

In Kind contribution		-		-		-		-		45,000		-			-			45,000

Net Loss for the six months ended
July 31, 2010		-		-		-				-		(156,300	)					(156,300	)

Other Comprehensive Income																		-

Total Comprehensive Loss																		(156,300	)
Balance July 31,2010		-	$	-		7,854,150	$	7,854	$	1,724,396	$	(3,641,779	)	$	(5,078	)	$	(1,914,607	)

The accompanying notes are an integral part of these unaudited financial statements.

Aspire Japan, Inc.

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

						For the period
						February 2, 2005
		For The Six Months Ended July 31,				(Inception) to
		2010		2009		July 31, 2010

Cash Flows From Operating Activities:
Net Loss	$	(156,300)	$	(103,354)	$	(3,641,779	)

Adjustments to reconcile net loss to net cash used in operations
In-kind contribution		45,000		45,000		283,000
Stock issued for incorporation expense		-		-		100
Stock issued for services		-		-		150,000
Impairment of property and equipment		-		-		2,388
Depreciation		-		-		2,429
Changes in operating assets and liabilities:
Increase in Deposits		-		(475)		(475	)
Increase in Prepaid Expenses		(2,111)		(11,520)		(2,656	)
Increase/ (Decrease) in Accounts Payable and Accrued Expenses		(1,753)		(25,868)		18,600
Increase in Accrued Interest		34,358		27,976		171,682
Increase in accrued interest - related party		1,326		-		10,493
Increase in Accrued judgement		41,314		-		1,091,033
Increase in accrued severance		-		-		236,730

Net Cash Used In Operating Activities		(38,166)		(68,241)		(1,678,455	)

Cash Flows From Investing Activities:
Cash paid for Property, Plant, & Equipment		-		-		(4,817	)

Net Cash Used In Investing Activities		-		-		(4,817	)

Cash Flows From Financing Activities:
Proceeds from Note Payable		-		93,770		943,175
Repayment of Note Payable		-				(30,396	)
Repayment of Note Payable - related party		(15,300)		(45,000)		(681,060	)
Proceeds from Note Payable - related party		53,444		20,010		740,297
Proceeds from Common Stock issuance		-		-		716,700

Net Cash Provided by Financing Activities		38,144		68,780		1,688,716

Net Increase / (Decrease) in Cash		(22)		539		5,444

Effect of Exchange Rate on Cash		-		-		(5,078	)

Cash at Beginning of Period		388		712		-

Cash at End of Period	$	366	$	1,251	$	366

Supplemental disclosure of cash flow information:

Cash paid for interest	$	-	$	-	$	5,951

Cash paid for taxes	$	-	$	-	$	-

In March 2008 the Company converted a total of $542,573 of notes payable and accrued interest of $39,877 into 194,150 shares of common stock.

($3.00 per share)

The accompanying notes are an integral part of these unaudited financial statements.

Aspire Japan, Inc.

(a development stage company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

As of July 31, 2010

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Organization

ASPIRE JAPAN, INC. (f/k/a Dream Media, Inc.) (“the Company”) was incorporated on February 2, 2005 in the State of Delaware. In September 2006, the Company became actively engaged in raising capital in order to implement its business plan to deliver products from American sources directly to the Japanese consumer in the form of mail-order business. In August 2008, after accumulating over $2 million, the Company decided to abandon the mail-order business. Then, the Company entered into the Intellectual Property Rights Trading Business. In August 2008, the Company was unsuccessful in a business transaction for the Intellectual Property Rights Trading. The Company still intends to generate revenue and profits with the Intellectual Property Rights Trading Business at this point. The Company has not had any significant operations or activities from inception; accordingly, the Company is deemed to be in the development stage.

The accompanying unaudited condensed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the six months ended July 31, 2010 are not necessarily indicative of results that may be expected for the year ending Januar y 31, 2011. The condensed financial statements are presented on the accrual basis.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with FASB Accounting Standards Codification No. 605 – “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

Cash and Cash Equivalents, and Credit Risk

For purposes of reporting cash flows, the Company considers all cash accounts with maturities of 90 days or less and which are not subject to withdrawal restrictions or penalties, as cash and cash equivalents in the accompanying balance sheet.

The Company maintains a portion of its deposits in a financial institution that insures its deposits with the FDIC insurance up to $250,000 per depositor and deposits in excess of such insured amounts represent a credit risk to the Company. At July 31, 2010 and January 31, 2010 the Company had $0 in cash that was uninsured. In addition, at July 31, 2010 and January 31, 2010, the Company had total cash of $103 and $138, respectively in a Japanese bank which is uninsured.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of property and equipment.

Advertising Costs

Advertising costs are expensed as incurred. Total advertising costs charged to operations for the three and six months ended July 31, 2010 and 2009 and the period February 2, 2005 (Inception) to July 31, 2010 amounted to $0, $0, $0, $0, and $156,562 respectively.

Reclassification of Prior Period Accounts

Certain amounts from prior periods have been reclassified to conform to the current year presentation.

Going Concern

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a net loss of $3,641,799 from inception, a working capital deficiency of $1,760,586 and a stockholders’ deficit of $1,914,607 as of July 31, 2010 and used cash in operations of $1,678,455 from inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management continues to actively seek additional sources of capital to fund current and future operations. There is no assurance that the Company will be successful in continuing to raise additional capital and establish probable or proven reserves. These unaudited financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Stock Compensation

The Company follows FASB Accounting Standards Codification No. 718 – Compensation – Stock Compensation for share based payments to employees. The Company follows FASB Accounting Standards Codification No. 505 for share based payments to Non-Employees.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments including prepaid expenses, accounts payable, accrued expenses, loans and notes payable, and loans payable-related party and they approximate fair value due to the relatively short period to maturity for these instruments.

Foreign Currency Translation

The functional currency of the Company is the United States Dollar. The financial statements of the Company are translated to United States dollars using year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Net gains and losses resulting from foreign exchange translations are included in the statements of operations and changes in stockholders’ equity as other comprehensive income (loss).

Earnings Per Share:

Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under FASB Accounting Standards Codification No. 260 - Earnings Per Share. Diluted EPS reflects the potential dilution of securities that could share in the earnings. As of July 31, 2010 and 2009 there were no common share equivalents outstanding.

Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) No. 2009-13, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. The ASU significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. The ASU will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided t hat the guidance is retroactively applied to the beginning of the year of adoption. The Company does not expect the adoption of ASU No. 2009-13 to have any effect on its financial statements upon its required adoption on January 1, 2011.

NOTE 2 - PROPERTY AND EQUIPMENT

During the three and six months ended July 31, 2010 and 2009, and the period February 2, 2005 (Inception) to July 31, 2010 the Company recorded depreciation expense of $0, $0, $0, $0 and $2,429 respectively. As of January 31, 2009 the Company deemed all computers impaired and recorded an impairment expense of $2,388. The Company has not purchased any new property or equipment through July 31, 2010.

NOTE 3 – JUDGEMENT PAYABLE / ACCRUED SEVERANCE

In January 2008 the Company entered into a separation agreement with its former President and Chief Executive Officer. The Company agreed to pay him a total of $230,000. The payment terms are as follows $30,000 monthly beginning January 31, 2008 and a final payment of $50,000 payable July 31, 2008. As of April 30, 2010 the Company paid a total of $30,000 and is currently in default of the agreement. In February 2009 the former President and Chief Executive Officer filed a law suit against the Company and the current President and Chief Executive Officer claiming total damages of $1,205,587. During the year ended January 31, 2009 the Company accrued additional severance expenses of $1,005,587 in accordance with the default under the settlement agreement. On May 18, 2009 the former President and Chief Exec utive Officer obtained a default judgment in the amount of $1,049,719 which includes the money award amount, prejudgement interest of 9%, post judgement interest of 9% through July 31, 2010, attorney fees, and other costs and disbursements. The Judgment accrues interest at a rate of 9% per anuum. As of July 31, 2010 the former President and Chief Executive officer is owed a total of $1,091,033.

In December 2007 the Company terminated its Executive Vice-President. As of July 31, 2010 the Company has not entered into any settlement agreement with the former Executive Vice-President and has recorded accrued severance in the amount of $236,730 pursuant to the terms of his employment agreement.

NOTE 4 - RELATED PARTY TRANSACTIONS

During the year ended January 31, 2007, the Company received $101,680 from a related party officer and director. The amount was due in July 2007 and bears interest of 6% per annum. During the year ended January 31, 2008, the Company received $5,835 from a related party officer and director. The amount was due on demand and bears interest of 6% per annum. During the year ended January 31, 2008, the Company repaid $105,326 of the note payable to the related party officer and director. During the year ended January 31, 2007, the Company received a loan of $203,602 from a related party officer and director. This amount bears interest at a rate of 10% per annum and was payable anytime before March 24, 2008. During the year ended January 31, 2008, the Company repaid $134,204 of the note payab le to the related party officer and director. During the year ended January 31, 2009 the Company borrowed an additional $263,839 and repaid a total of $277,974 of notes payable to the related party officer and director. (See Note 6).

During the year ended January 31, 2010, the Company received $111,897 and repaid a total of $148,256 from a related party officer and director. The amount is due on demand and bears interest of 10% per annum. (See Note 6).

As of July 31, 2010 and January 31, 2010 the related party officer and director is owed a total of $59,237 and $21,093, respectively and accrued interest of $10,493 and $9,167, respectively. The Company recorded interest expense on the related party loans during the three and six months ended July 31, 2010 and 2009 of $633, $1,326, $1,265 and $1,990 respectively (See Note 6).

NOTE 5 - INTELLECTUAL PROPERTY RIGHTS SALES AGREEMENT

On August 13, 2008, we entered into an Intellectual Property Rights Sales Agreement (the “Eiwa Agreement”) with Eiwa Kokudo Kankyo, Inc. (“Eiwa”). Pursuant to the Eiwa Agreement, we agreed to pay approximately $5,454,545 (equal to 600 Million YEN) to Eiwa for the Intellectual Property of the Aqua-make system. In addition, we are entitled to sell the rights of this Intellectual Property to the third party upon signing the agreement. Pursuant to the agreement the Company entered into an agreement with EIWA to pay the purchase price in the following manner:

1.	August 29, 2008, 50 Million Japanese Yen (Approximately $454,545)

2.	September 12, 2008, 50 Million Japanese Yen (Approximately $454,545)

3.	September 30, 2008, 200 Million Japanese Yen (Approximately $1,818,182)

4.	January 31, 2009, 300 Million Japanese Yen (Approximately $2,727,273)

On November 27, 2008, we notified Eiwa that we were unilaterally canceling the agreement. We have not made any payments and we are in default under the payment terms of the agreement. If Eiwa does not agree to cancel the agreement, we might be required to make the payments as per the agreement. To date, we are not aware of Eiwa pursuing any remedies associated with the cancellation. It is very possible that we will incur a material liability as a result of this cancelled agreement if Eiwa pursues legal remedies.

The reason no liability has been recorded for the cancelled purchase agreement with Eiwa is because we have not recorded any amounts due under the intangible purchase agreement as no property has been received – we do not receive the IP until all payments have been made. Since no payments have been made and no property has been received, this is disclosed as a commitment only.

Thereafter, on August 15, 2008, we entered into an Intellectual Property Rights Sales Agreement with Global Investment Service, Inc. (“GIS”) to sell the Intellectual Property of the Aqua-make system to GIS for $14,545,455 (equal to 1.6 Billion YEN). Pursuant to the GIS Agreement, we have the right of first refusal to buy Intellectual Property back from GIS in the event that GIS agrees to sell the intellectual property within three years from August 15, 2008 by issuing 3.2 million shares of our common stock. We also need to agree to purchase the Intellectual Property to exercise the buy back option. As part of such conditions, we have agreed not to split our stock for the next three years. Pursuant to the agreement, GIS entered into a note with us to pay the purchase price in the following manner:

1.	August 29, 2008, 200 Million Japanese Yen (Approximately $1,818,182)

2.	September 30, 2008, 400 Million Japanese Yen (Approximately $3,636,354)

3.	January 31, 2009, 1 Billion Japanese Yen (Approximately $9,090,909)

Pursuant to the agreement, we are required to pay a fixed royalty amount of 13,340,000 Japanese Yen (Approximately $121,273) monthly to GIS for the license to operate the business and to use our best efforts to market the product in the United States. As of July 31, 2010, we have not made any royalty payments.

As of October 31, 2008, we received payments of approximately $84,949 and Global Investment Services, Inc. is in default under the payment terms of the agreement. On November 30, 2008, we received notice of termination of the agreement from Global Investment Services, Inc. As of July 31, 2010, we have recorded a gain in liquidated damages of $84,949.

NOTE 6 – NOTES AND LOANS PAYABLE -RELATED PARTY

During the year ended January 31, 2007, the Company received a loan of $203,602 from a related party officer and director. This amount bears interest at a rate of 10% per annum and was payable anytime before March 24, 2008.During the year ended January 31, 2008, the Company repaid $134,204 of the note payable to the related party officer and director.

During the year ended January 31, 2009 the Company borrowed an additional $263,839 and repaid a total of $277,974 of notes payable to the related party officer and director.

As of July 31, 2010 and January 31, 2010 the related party officer and director is owed a total of $59,237 and $21,093, respectively and accrued interest of $10,493 and $9,167, respectively. The Company recorded interest expense during the three and six months ended July 31, 2010 and 2009 of $633, $1,326, $1,265 and $1,990 respectively.

NOTE 7 – NOTES PAYABLE

On July 11, 2007, the Company entered into a twelve month unsecured note payable for $200,000. The note will accrue interest at a rate of 18%, with principle and interest due and payable on July 10, 2008. Accrued interest at January 31, 2008 was $20,148. On March 18, 2008 the Company converted the principle and accrued interest of $24,784 into 74,928 common shares of the Company’s common stock at a conversion price of $3.00.

On August 28, 2007, the Company entered into a twelve month unsecured note payable for $85,419. The note will accrue interest at a rate of 18%, with principle and interest due and payable on August 30, 2008. Accrued interest at July 31, 2010 and January 31, 2010 was $44,863 and $37,328, respectively. A new note was entered into on August 31, 2008 with a new due date of August 31, 2009. All other terms remained the same. A new note was entered into on August 31, 2009 with a new due date of August 30, 2010. All other terms remained the same. A new note was entered into on August 31, 2010 with a new due date of August 30, 2011. All other terms remained the same.

On October 10, 2007, the Company entered into a twelve month unsecured note payable for $59,177. The note will accrue interest at a rate of 18%, with principle and interest due and payable on October 9, 2008. Accrued interest at July 31, 2010 and January 31, 2010 was $29,913 and $24,631, respectively. A new note was entered into on October 9, 2008 with a new due date of October 9, 2009. A new note was entered into on October 9, 2009 with a new due date of October 9, 2010. All other terms remained the same.

On October 12, 2007, the Company entered into a twelve month unsecured note payable for $33,767. The note will accrue interest at a rate of 18%, with principle and interest due and payable on October 11, 2008. Accrued interest at July 31, 2010 and January 31, 2010 was $17,035 and $14,021. A new note was entered into on October 11, 2008 with a new due date of October 11, 2009. A new note was entered into on October 11, 2009 with a new due date of October 10, 2010. All other terms remained the same.

On November 12, 2007, the Company entered into a twelve month unsecured note payable for $9,040. The note will accrue interest at a rate of 18%, with principle and interest due and payable on November 11, 2008. Accrued interest at January 31, 2008 was $357. On March 18, 2008 the Company converted the principle and accrued interest of $566 into 3,202 common shares of the Company’s common stock at a conversion price of $3.00.

On November 15, 2007, the Company entered into a twelve month unsecured note payable for $78,456. The note will accrue interest at a rate of 18%, with principle and interest due and payable on November 16, 2008. Accrued interest at January 31, 2008 was $2,979. On March 18, 2008 the Company converted the principle and accrued interest of $4,798 into 27,751 common shares of the Company’s common stock at a conversion price of $3.00.

On November 26, 2007, the Company entered into a twelve month unsecured note payable for $64,391. The note will accrue interest at a rate of 18%, with principle and interest due and payable on November 27, 2008. Accrued interest at January 31, 2008 was $2,096. On March 18, 2008 the Company converted the principle and accrued interest of $3,588 into 22,660 common shares of the Company’s common stock at a conversion price of $3.00.

On December 28, 2007, the Company entered into a twelve month unsecured note payable for $127,627. The note will accrue interest at a rate of 18%, with principle and interest due and payable on December 29, 2008. Accrued interest at January 31, 2008 was $2,140. On March 18, 2008 the Company converted the principle and accrued interest of $5,098 into 44,242 common shares of the Company’s common stock at a conversion price of $3.00.

On January 31, 2008, the Company entered into a twelve month unsecured note payable for $36,284. The note will accrue interest at a rate of 18%, with principle and interest due and payable on January 31, 2009. Accrued interest at January 31, 2008 was $0. On March 18, 2008 the Company converted the principle and accrued interest of $841 into 12,375 common shares of the Company’s common stock at a conversion price of $3.00.

On February 29, 2008 the Company entered into a twelve month unsecured note payable for $9,457. The note will accrue interest at a rate of 18%, with principle and interest due and payable on February 28, 2009. On March 18, 2008 the Company converted the principle and accrued interest of $84 into 3,180 common shares of the Company’s common stock at a conversion price of $3.00.

On March 3, 2008 the Company entered into a twelve month unsecured note payable for $9,609. The note will accrue interest at a rate of 18%, with principle and interest due and payable on March 2, 2009. On March 18, 2008 the Company converted the principle and accrued interest of $72 into 3,227 common shares of the Company’s common stock at a conversion price of $3.00.

On March 13, 2008 the Company entered into a twelve month unsecured note payable for $19,472. The note will accrue interest at a rate of 18%, with principle and interest due and payable on March 12, 2009. On March 18, 2008 the Company converted $7,708 of principle and accrued interest of $48 into 2,585 common shares of the Company’s common stock at a conversion price of $3.00. Accrued interest at July 31, 2010 and January 31, 2010 was $5,047 and $3,997, respectively. On March 13, 2009 this note was extended to March 31, 2010 and on October 9, 2009, it was further extended to October 8, 2010.

On April 28, 2008 the Company entered into a twelve month unsecured note payable for $28,371. The note will accrue interest at a rate of 18%, with principle and interest due and payable on April 27, 2009. Accrued interest at July 31, 2010 and January 31, 2010 was $11,529 and $8,996, respectively. On April 28, 2009, this note was extended to April 28, 2010 and on October 9, 2009, it was further extended to October 8, 2010.

On May 22, 2008, the Company entered into a twelve month unsecured note payable for $4,814. The note will accrue interest at a rate of 18% per annum and is payable May 21, 2009. Accrued interest at July 31, 2010 and January 31, 2010 was $1,899 and $1,470 respectively. On May 22, 2009, this note was extended to May 22, 2010 and on October 9, 2009, it was further extended to October 8, 2010.

On June 3, 2008, the Company entered into a twelve month unsecured note payable for $14,229. The note will accrue interest at a rate of 18% per annum and is payable June 2, 2009. Accrued interest at July 31, 2010 and January 31, 2010 was $5,529 and $4,259, respectively. On May 22, 2009, this note was extended to May 22, 2010 and on October 9, 2009, it was further extended to October 8, 2010.

On April 30, 2009, the Company entered into a twelve month unsecured note payable for 5,000,000 Japanese Yen (Approximately $51,620). The note will accrue interest at a rate of 20% per annum and is payable April 30, 2010. On December 22, 2009 the Company repaid principal of $30,396 and accrued interest of $6,675. Accrued interest at July 31, 2010 and January 31, 2010 was $2,559 and $454, respectively. A new note was entered into on April 30, 2010 with a new due date of April 30, 2011. All other terms remained the same.

On May 28, 2009, the Company entered into a twelve month unsecured note payable for 2,000,000 Japanese Yen (Approximately $20,627). The note will accrue interest at a rate of 20% per annum and is payable May 27, 2010. On December 22, 2009 the Company repaid accrued interest of $2,351. Accrued interest at July 31, 2010 and January 31, 2010 was $2,487 and $441, respectively. A new note was entered into on May 28, 2010 with a new due date of May 27, 2011. All other terms remained the same.

On June 30, 2009, the Company entered into a twelve month unsecured note payable for 2,000,000 Japanese Yen (Approximately $20,936). The note will accrue interest at a rate of 20% per annum and is payable June 29, 2010. On December 22, 2009 the Company repaid accrued interest of $2,008. Accrued interest at July 31, 2010 and January 31, 2010 was $2,524 and $447, respectively. A new note was entered into on June 30, 2010 with a new due date of June 29, 2011. All other terms remained the same.

On August 18, 2009, the Company entered into a twelve month unsecured note payable for 1,000,000 Japanese Yen (Approximately $10,578). The note will accrue interest at a rate of 20% per annum and is payable August 17, 2010. On December 22, 2009 the Company repaid accrued interest of $730. Accrued interest at July 31, 2010 and January 31, 2010 was $1,275 and $226, respectively. A new note was entered into on August 18, 2010 with a new due date of August 17, 2011. All other terms remained the same.

On September 15, 2009, the Company entered into a twelve month unsecured note payable for 1,000,000 Japanese Yen (Approximately $11,031). The note will accrue interest at a rate of 20% per annum and is payable September 15, 2010. On December 22, 2009 the Company repaid accrued interest of $592. Accrued interest at July 31, 2010 and January 31, 2010 was $1,330 and $236, respectively. A new note was entered into on September 15, 2010 with a new due date of September 15, 2011. All other terms remained the same.

On October 1, 2009, the Company entered into a twelve month unsecured note payable for 1,500,000 Japanese Yen (Approximately $16,710). The note will accrue interest at a rate of 20% per annum and is due on September 30, 2010. On December 22, 2009 the Company repaid accrued interest of $751. Accrued interest at July 31, 2010 and January 31, 2010 was $2,014 and $357, respectively.

On October 22, 2009, the Company entered into a twelve month unsecured note payable for 1,000,000 Japanese Yen (Approximately $11,000). The note will accrue interest at a rate of 20% per annum and is payable October 21, 2010. On December 22, 2009 the Company repaid accrued interest of $368. Accrued interest at July 31, 2010 and January 31, 2010 was $1,326 and $235, respectively.

On November 10, 2009, the Company entered into a twelve month unsecured note payable for 200,000 Japanese Yen (Approximately $2,223). The note will accrue interest at a rate of 20% per annum and is payable October 9, 2010. On December 22, 2009 the Company repaid accrued interest of $51. Accrued interest at July 31, 2010 and January 31, 2010 was $268 and $48, respectively.

On November 20, 2009 the Company entered into a twelve month unsecured note payable for 300,000 Japanese Yen (Approximately $3,369). The note will accrue interest at a rate of 20% per annum and is payable October 19, 2010. On December 22, 2009 the Company repaid accrued interest of $59. Accrued interest at July 31, 2010 and January 31, 2010 was $406 and $72, respectively.

On November 27, 2009 the Company entered into a twelve month unsecured note payable for 1,300,000 Japanese Yen (Approximately $14,970). The note will accrue interest at a rate of 20% per annum and is payable October 27, 2010. On December 22, 2009 the Company repaid accrued interest of $205. Accrued interest at July 31, 2010 and January 31, 2010 was $1,805 and $320, respectively.

NOTE 8 -- STOCKHOLDERS' EQUITY

Common and Preferred Stock:

Preferred stock includes 50,000,000 shares authorized at a par value of $0.001, of which none are issued or outstanding.

During 2005, the Company issued 100,000 shares of common stock for the amount of $100 ($0.001 per share) in exchange for the incorporation expenses for the Company.

During September 2006, the Company issued 6,700,000 shares of common stock at ($0.001 per share) in a private placement offering exempt from registration with the U.S. Securities Act of 1933 for a total value of $6,700.

During November 2006, the Company undertook a private placement issuance, Regulation D Rule 506 offering of 275,000 shares of common stock for a value of $275,000 ($1.00 per share). The Company believes this offering is exempt from registration with the US Securities and Exchange Commission.

During April 2007, the Company undertook a private placement issuance, Regulation D Rule 506 offering of 435,000 shares of common stock for a value of $435,000 ($1.00 per share). The Company believes this offering is exempt from registration with the US Securities and Exchange Commission.

During April 2007, the Company issued 100,000 shares of common stock valued at a recent cash offering price of $100,000 or $1.00 per share to a consultant for providing strategic planning services. The Company has amortized the value of the shares over the contract period of six months.

During June 2007, the Company issued 50,000 shares of common stock for legal services. The shares were valued at $50,000 or $1.00 per share based on a recent cash offering price.

On March 18, 2008 a note holder converted a total of $542,572 of notes payable and accrued interest of $39,878 into 194,150 shares of common stock ($3.00 per share).

In-Kind Contribution of Compensation

During the year ended January 31, 2007, the Company recorded $7,000 as in-kind contribution of salary for services provided by its President.

During the year ended January 31, 2008, the Company recorded $51,000 as in-kind contribution of salary for services provided by its President.

During the year ended January 31, 2009, the Company recorded $90,000 as in-kind contribution of salary for services provided by its President.

During the year ended January 31, 2010, the Company recorded $90,000 as in-kind contribution of salary for services provided by its President.

During the three and six months ended July 31, 2010, the Company recorded $22,500 and $45,000, respectively as in-kind contribution of salary for services provided by its President.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

Certain statements contained herein, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Given these uncertainties, readers of this prospectus and investors are cautioned not to place undue reliance on such forward-looking statements.

Plan of Operations

We anticipate that our operational as well as general and administrative expenses for the next 12 months will total $225,000. The breakdown is as follows:

Marketing Materials	$	50,000
Legal/Accounting	$	75,000
General/Administrative	$	100,000
Total	$	225,000

Because of our nature as a development stage company, it is unlikely that we could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender. We intend on financing operations primarily through funds raised in private placements. There can be no assurance that we will able to obtain additional funding when and if needed or that such funding, if available, can be obtained on terms acceptable to us.

Capital Resources and Liquidity

During the year ended January 31, 2010, we received $111,897 and repaid a total of $148,256 from a related party officer and director. The amount is due on demand and bears interest of 10% per annum.

As of July 31, 2010 and January 31, 2010 the related party officer and director is owed a total of $59,237 and $21,093, respectively and accrued interest of $10,493 and $9,167, respectively. The Company recorded interest expense on the related party loans during the three months ended July 31, 2010 and 2009 of $693 and $1,806 respectively.

As of July 31, 2010, we had cash of $366.

We do not believe we can satisfy our cash requirements for the next twelve months from revenue and through funds raised in our private placements. We plan to raise additional capital to be used for operating capital. We intend to raise these funds through additional private placements. We have not identified any sources of capital, lines of credit or loans at this time. Completion of our plan of operation is subject to attaining adequate revenue and through funds raised from private placements. We cannot assure investors that adequate revenues will be generated. In the event we are not successful in reaching our initial revenue targets, Management believes that it will raise the funds required and we would then be able to proceed with our business plan for the development and marketing of our products and services a long with the commencement of our business activities in 2010.

In the absence of our projected revenues and the absence of additional capital we may be unable to proceed with our plan of operations. We anticipate that depending on market conditions and our plan of operations, we would incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our operations to cover our operating expenses. Consequently, there is substantial doubt about our ability to continue to operate as a going concern.

As reflected in the accompanying unaudited financial statements, we are in the development stage, have a net loss of $3,641,779 from inception, working capital deficiency of $1,760,586, a stockholders’ deficit of $1,914,607 and have a negative cash flow from operations of $1,678,455 from inception. This raises substantial doubt about its ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We have completed our efforts to become a public company and by doing so we have incurred and will continue to incur additional significant expenses for legal, accounting and related services. As a public entity, subject to the reporting requirements of the Securities Exchange Act of 1934, there will be ongoing expenses associated with the ongoing professional fees for accounting, legal and a host of other expenses for annual reports and proxy statements as well as costs for (i) increased marketing and advertising to support any growth in sales for us; (ii) potential to hire additional personnel to manage and expand our operations.

Results of Operations

We did not have any operating income from inception through January 31, 2010. For the three and six months ended July 31, 2010, we recognized a net loss of $80,774 and $156,300 respectively and for the period from inception through July 31, 2010, we recognized a net loss of $3,641,779. Expenses for the three months ended July 31, 2010 were comprised of costs of professional fees of $11,508, compensation expense of $22,500, severance expense of $20,999 and general and administrative expenses of $7,336. Expenses for the six months ended July 31, 2010 were comprised of costs of professional fees of $23,029, compensation expense of $45,000, severance expense of $41,314 and general and administrative expenses of $10,793.

For the three months ended July 31, 2009, we recognized a net loss of $67,500. Expenses for the period were comprised of costs of professional fees of $23,595, compensation of $22,500, and general and administrative expenses of $3,113. For the six months ended July 31, 2009, we recognized a net loss of $103,354. Expenses for the period were comprised of costs of professional fees of $23,721, compensation of $45,000, and general and administrative expenses of $4,108.

Commitments

1.	August 29, 2008, 50 Million Japanese Yen (Approximately $454,545)

2.	September 12, 2008, 50 Million Japanese Yen (Approximately $454,545)

3.	September 30, 2008, 200 Million Japanese Yen (Approximately $1,818,182)

4.	January 31, 2009, 300 Million Japanese Yen (Approximately $2,727,273)

On November 27, 2008, we notified Eiwa that we were unilaterally canceling the agreement. We have not made any payments and we are in default under the payment terms of the agreement. If Eiwa does not agree to cancel the agreement, we might be required to make the payments as per the agreement. To date, we have not been made aware of whether Eiwa is pursuing any remedies associated with the cancellation. It is very possible that we will incur a material liability as a result of this cancelled agreement if Eiwa pursues any legal remedies.

Thereafter, on August 15, 2008, we entered into an Intellectual Property Rights Sales Agreement with Global Investment Service, Inc. (“GIS”) to sell the Intellectual Property of the Aqua-make system to GIS for $14,545,455 (equal to 1.6 Billion YEN). Pursuant to the GIS Agreement, we have the right of first refusal to buy Intellectual Property back from GIS in the event that GIS agrees to sell the intellectual property within three years from August 15, 2008 by issuing 3.2 million shares of our common stock. We also need to agree to purchase the Intellectual Property to exercise the buyback option. As part of such conditions, we have agreed not to split our stock for the next three years. Pursuant to the agreement, GIS entered into a note with us to pay the purchase p rice in the following manner:

1.	August 29, 2008, 200 Million Japanese Yen (Approximately $1,818,182)

2.	September 30, 2008, 400 Million Japanese Yen (Approximately $3,636,354)

3.	January 31, 2009, 1 Billion Japanese Yen (Approximately $9,090,909)

As of October 31, 2008, we have received payments of approximately $84,949 and Global Investment Services, Inc. is in default under the payment terms of the agreement. On November 30, 2008, we received notice of termination of the agreement from Global Investment Services, Inc. As of July 31, 2010 we have recorded a gain in liquidated damages of $84,949.

Critical Accounting Policies

The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Recent Accounting Pronouncements

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting Companies.

Item 4T. Controls and Procedures

a) Evaluation of Disclosure Controls. Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. 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

Item 1. Legal Proceedings.

There were no material developments to legal proceedings during the quarterly period ended July 31, 2010.

Item 1A. Risk Factors.

Not Applicable to smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

None.

Item 5. Other Information.

None

Item 6. Exhibits

(a) Exhibits

31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ASPIRE JAPAN, INC.

Date: September 14, 2010	By:	/s/ Ken Osako
		Ken Osako
		President, Chief Executive Officer, Chief Financial Officer

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Aspire Japan (ASJP) Inactive 10-Q2011 Q2 Quarterly report

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