SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





_________________





FORM 10-Q


_________________





(Mark One)





x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Quarter Ended September 30, 2010oro
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Transition Period from ____________ to ____________








Commission File No. 000-27773





ASPIRE INTERNATIONAL, INC.


(Exact name of registrant as specified in its charter)





Maryland

91-1869317(State of Incorporation)

(I.R.S. Employer Identification No.)








18 Crown Steel Drive, Unit #310, Markham, Ontario L3R 9X8


(Address of principal executive offices)





(905) 943-9996


(Registrants’ telephone number, including area code)





(Former Name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes o      No x





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o

Accelerated filer oNon-accelerated filer   o      (Do not check if a smaller reporting company)
Smaller reporting company x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934)


Yes o     No x




















APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING


THE PRECEDING FIVE YEARS





Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


Yes o      No o


APPLICABLE ONLY TO CORPORATE ISSUERS:





Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.





32,924,419 issued and outstanding as of April 11, 2011.











ASPIRE INTERNATIONAL, INC.





TABLE OF CONTENTS





PagePART I - FINANCIAL INFORMATIONITEM 1.
FINANCIAL STATEMENTSConsolidated Balance Sheets
1Consolidated Statements of Operations
2-3Consolidated Statements of Cash Flows
4Notes to the Consolidated Financial Statements
5-8ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
9ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
10ITEM 4T.
CONTROLS AND PROCEDURES
11PART II OTHER INFORMATIONITEM 1.
LEGAL PROCEEDINGS
12ITEM 1A
RISK FACTORS
12ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
12ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
12ITEM 4.
REMOVED & RESERVED
12ITEM 5.
OTHER INFORMATION
12ITEM 6.
EXHIBITS
13SIGNATURES

14










PART I - FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS





ASPIRE INTERNATIONAL INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


AS OF




30 September

2010

(Unaudited)


31 December

2009

(Audited)ASSETSCurrent AssetsCash and cash equivalents

$
58,831


$
51,888Prepayment and other receivables


41,001



6,236Advances receivable


542,871



517,474Total Current Assets


642,703



575,598Capital and Other Assets
 Deferred charges


44,652



54,391Property and equipment, net


446,789



460,644Intellectual property


1



1Total Capital and Other Assets


491,442



515,036
 Total Assets

$
1,134,145


$
1,090,634


LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesAccounts payable and accrued liabilities

$
4,430,174


$
4,111,672Customer advances


783,351



746,703Advances from stockholders


904,479



743,463Loans payable


309,249



288,436Promissory note payable


2,612,692



2,017,478Total Current Liabilities


9,039,945



7,907,752


Commitments and ContingenciesStockholders' DeficitPreferred stock, par value of $0.001 per share; 5,000,000 authorized; Nil issued and outstandingCommon stock, par value of $0.001 per share; 150,000,000 authorized; 18,674,419 issued and outstanding (31 December 2009 – 14,899,419)


18,674



14,899Additional paid-in capital


18,969,779



17,838,954Stock to be issued


60,000



-Stock subscriptions receivable


(825,900
)


(617,750
)Deferred stock-based compensation


(585,832
)


(81,187
)Accumulated other comprehensive loss


(302,489
)


(274,408
)Accumulated deficit


(25,240,032
)


(23,697,626
)Total Stockholders' Deficit


(7,905,800
)


(6,817,118
)Total Liabilities and Stockholders' Deficit

$
1,134,145


$
1,090,634




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




1




ASPIRE INTERNATIONAL INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2010 AND 2009


(Unaudited)




2010


2009SALES

$
-


$
-COST OF SALES


-



-GROSS PROFIT


-



-OPERATING EXPENSESGeneral and administrative


375,384



18,876Interest


221,404



152,834Management salaries


100,000



100,000Depreciation


23,717



28,683TOTAL OPERATING EXPENSES


720,505



300,393NET LOSS

$
(720,505
)

$
(300,393
)OTHER COMPREHENSIVE LOSSForeign currency translation


(22,052
)


(109,469
)COMPREHENSIVE LOSS

$
(742,557
)

$
(409,862
)LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

$
(0.05
)

$
(0.02
)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED


13,455,994



12,369,016




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




2





ASPIRE INTERNATIONAL INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2010 AND 2009


(Unaudited)







2010


2009SALES

$
-


$
71,169COST OF SALES


-



63,198GROSS PROFIT


-



7,971OPERATING EXPENSESInterest


612,197



439,598General and administrative


562,400



350,542Management salaries


300,000



300,000Depreciation


67,809



87,540TOTAL OPERATING EXPENSES


1,542,406



1,177,680LOSS FROM OPERATIONS


(1,542,406
)


(1,169,709
)Writedown of assets


-



(127,339
)NET LOSS

$
(1,542,406
)

$
(1,297,048
)OTHER COMPREHENSIVE LOSSForeign currency translation


(28,081
)


(150,569
)COMPREHENSIVE LOSS

$
(1,570,487
)

$
(1,448,138
)LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED

$
(0.12
)

$
(0.02
)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED


12,694,186



12,369,016




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




3




ASPIRE INTERNATIONAL INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2010 AND 2009


(Unaudited)





2010


2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(1,542,406
)

$
(1,297,048
)Adjustments for non-cash items:Depreciation


67,809



87,540Writedown of assets


-



127,339Stock-based compensation


198,355



267,973Stock issued for services


217,500



-Interest accrued on promissory notes payable


595,214



421,665Adjustments for changes in working capital:Prepayments and other receivables


(34,232
)


(6,833
)Accounts payable and accrued liabilities


318,502



336,413CASH USED IN OPERATING ACTIVITIES


(179,258
)


(62,951
)CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of equipment


(41,698
)


-CASH USED IN INVESTING ACTIVITIES


(41,698
)


-CASH FLOWS FROM FINANCING ACTIVITIESAdvances from stockholders


161,016



205,444Proceeds from stock to be issued


60,000



-Proceeds from warrants exercised


14,100



-Stock subscriptions receivable


(8,150
)


-Proceeds from loans payable


20,813



66,006CASH PROVIDED BY FINANCING ACTIVITIES


247,779



271,450EFFECT OF FOREIGN CURRENCY TRANSLATION


(19,896
)


(151,611
)NET DECREASE IN CASH


6,943



(56,888
)CASH, BEGINNING OF PERIOD


51,888



24,227CASH, END OF PERIOD

$
58,831


$
81,115




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




4




ASPIRE INTERNATIONAL INC. AND SUBSIDIARIES


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2010


(Unaudited)





1.    NATURE OF OPERATIONS





The consolidated financial statements include the accounts of Aspire International, Inc. (the “Company” or “Aspire”) and its wholly-owned subsidiaries, Perfisans Networks Corporation, Mega Bond Group (Hong Kong) Limited (“Mega Bond”), and Aspire International Group (Hong Kong) Limited. Perfisans Networks Corporation includes the accounts of its wholly-owned subsidiaries, Perfisans Networks (Taiwan) Corporation and Aspire (GuangXi) Inc. All material inter-company balances and transactions have been eliminated. The Company has funded its operations to date mainly through the issuance of shares.





Mega Bond’s business activity involved the sale of electronic components up to the end of March 31, 2009.  Mega Bond ceased business operations in the second quarter of 2009.  It is management’s intention to close the Mega Bond office in fiscal 2011.





We have ceased business operations at our Taiwan branch, Perfisans Networks (Taiwan) Corporation effective the second quarter of 2009.  It is management’s intention to close the Taiwan branch in fiscal 2011.





During the third quarter of 2010, the Company opened a new subsidiary, Aspire International Group (Hong Kong) Limited, which will identify potential acquisition targets in the online shopping industry.





2.    BASIS OF PRESENTATION





The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. 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 of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the nine month period ended 30 September 2010 are not necessarily indicative of the results that may be expected for the year ending 31 December 2010.  For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended 31 December 2009.





3.    GOING CONCERN





Certain principal conditions and events are prevalent which indicate that there could be substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. These include:





1)
Recurring operating losses2)
Stockholders’ deficiency3)
Working capital deficiency4)
Adverse key financial ratios





The continuation of the Company as a going concern is dependent upon its ability to raise additional financing and ultimately attain and maintain profitable operations from commercialization of its intellectual property.





The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





5




4.    ADVANCES RECEIVABLE





The Company’s subsidiary Aspire GuangXi executed a manganese ore mining distribution and management agreement in China with the mine owner and a management company. From the proceeds of the mining operation, Aspire GuangXi is required to distribute 30% to the management company who is responsible to incur all operating expenses. As of September 30, 2010, Aspire GuangXi has a receivable of $542,871 (December 31, 2009 - $517,474), as a result of paying for certain expenses on behalf of the management company and to enable it to commence mining operations. Once the mine commences operations the Company is expected to receive repayment of these advances.





5.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES





30 September 2010

(Unaudited)


31 December 2010

(Audited)Accounts payable

$
292,686


$
296,404Accrued liabilities – management salaries


2,499,000



2,199,000Accrued liabilities – payroll


395,033



399,348Accrued liabilities – interest


251,806



251,935Accrued liabilities – consulting


194,424



194,424Accrued liabilities – professional


32,069



35,018Accrued liabilities – others


765,156



735,543Total

$
4,430,174


$
4,111,672





6.    ADVANCES FROM STOCKHOLDERS





Advances from stockholders include the following:





A loan of $90,000 from a director of the corporation, which is unsecured, bears interest at 2% per month, and is due on demand. For the nine months ended 30 September 2010, the Company has accrued interest of $16,200 (nine months ended 30 September 2009 - $16,200) as interest on this loan from a director.





Other loans from shareholders and directors which are unsecured, non-interest bearing, and are due on demand. The Company calculated the fair value of interest on these interest free loans from shareholders at the rate of 5% (2009 – 5%) per annum and recorded it as a component of additional paid in capital.





During the nine months ended 30 September 2010, the Company received advances from stockholders totalling $69,500 which are unsecured, non-interest bearing, and due on demand.





7.    CAPITAL STOCK





On 9 April 2010, the Company issued 40,000 shares to a consultant for stock promotional services.





On 19 April 2010, the Company issued 50,000 shares to a consultant for legal services.





On 4 June 2010, the Company issued 100,000 shares to a consultant for stock promotional services.





On 7 July 2010, the Company issued 60,000 shares to a consultant for services rendered. Of these shares, 40,000 were subsequently cancelled on 7 October 2010 for non-performance.





On 20 July 2010, the Company issued 1,000,000 shares as collateral for a funding arrangement. A receivable of $200,000 was recorded in respect of this issuance. Subsequent to year-end, these shares were cancelled as discussed in note 10.




6




On 27 July 2010, the Company issued 950,000 shares and share purchase warrants to a consultant in exchange for $0.01 per share and for services to be provided over 12 months. Each warrant entitles the consultant to purchase one share of the Company at a price of $0.012 and is exercisable at any time within 12 months after the signing date. The value of the services from the issuance of these shares and warrants will be amortized over 12 months.





On 27 July 2010, the Company issued 400,000 shares at a price of $0.012 in settlement of warrants exercised by consultants. A receivable of $4,800 was recorded in respect of this issuance.





On 18 August 2010, the Company issued 350,000 shares to a consultant for services rendered.





On 16 September 2010, the Company issued 775,000 shares at a price of $0.012 in settlement of warrants exercised by consultants. A receivable of $9,300 was recorded in respect of this issuance.





On 16 September 2010, the Company issued 50,000 shares to a consultant for services rendered.




8.    COMMITMENTS AND CONTINGENCIES





The Company has been served with a Notice dated July 21, 2006 from a former employee and Investor of Griffin Industries (Prior to name change to Perfisans Holdings Inc.) for specific performance of the March 24, 1999 Rescission Agreement. The former employee is asking for replacement warrants equivalent in value to the price of stock on October 19, 1998 calculated at 6,000 shares priced at $75 per share for a total consideration of $450,000. There has been no development or communication regarding this claim since July 21, 2006 and no expense has been accrued in the financial statements.





On May 26, 2008, Perfisans Networks Corporation (“Perfisans”), a wholly-owned subsidiary of Aspire International Inc. (the “Company”) entered into a Management Agreement with Liuzhou Yi Sheng Da Trading Co., Ltd. (“Liuzhou”), dated May 26, 2008, whereby the parties agreed that the management of the Manganese Ore at Guangxi Fong Sheng shall be assigned to the Company for a period of ten years, commencing on June 1, 2008 and terminating on May 31, 2018. The Company will be paid a management fee of 21% of the total sales revenue of the Ore.





The Company leased premises in Canada under an operating lease with a three year term expiring on May


31, 2010. The Company continues to lease this premises on a month-to-month basis at a rate of $2,200 CAD, after this lease expired.





The Company’s subsidiary Aspire Guangxi executed a distribution and management agreement with the owner of a manganese ore mine in China. To facilitate access to the mine, the Company has committed payments to the property owners in the outskirts of the mining property to facilitate access to the mining property. The Company is committed to the following payments:





2011

$
3,7522012


14,2102013


15,7192014


17,2282015 and thereafter


75,450Total

$
126,358




7




9.    SEGMENTED DISCLOSURES





Starting in the third quarter of 2010, the Company began operating a new segment in the online shopping industry. Revenue and assets by geographic regions and business segment are as follows for the nine months ended 30 September 2010:





China

(Mine Management)


Hong Kong (Import / Export)


Hong Kong (Online Shopping)Sales


-



-



-Cost of Sales


-



-



-Operating Expenses


(1,505,884
)


(4,071
)


(24,451
)Net Loss


(1,505,884
)


(4,071
)


(24,451
)Total Assets


1,068,412



4,978



60,755





Revenue and assets by geographic regions and business segment are as follows for the nine months ended 30 September 2009:





China

(Mine Management)


Hong Kong (Import / Export)Sales


-



71,169Cost of Sales


-



(63,198
)Operating Expenses


(1,209,134
)


(95,885
)Net Loss


(1,209,134
)


(87,914
)Total Assets


1,150,465



4,769




10.    SUBSEQUENT EVENTS





On 14 January 2011, the Company cancelled 1,000,000 shares which were previously issued as collateral in a funding arrangement that did not materialize.





On 14 February 2011, the Company entered into an Acquisition Agreement with its directors Bok Wong and To Hon Lam and the Company’s wholly owned subsidiary Perfisans Networks Corporation. Pursuant to this agreement, Bok Wong and To Hon Lam acquired 100% of the common stock of Perfisans for consideration of $10.





On 14 February 2011, the Company and Candid Global Resources Hong Kong Ltd entered into an Asset Purchase Agreement whereby Candid Global Resources Hong Kong Ltd agreed to sell 100% of their assets, including the sub-entity known as “Mygos” and related trademarks and intellectual property for 10,000,000 common shares of Aspire.




8




ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS





The following discussion should be read in conjunction with the information contained in our consolidated financial statements at the notes thereto appearing elsewhere in this quarterly report, and in conjunction with the Management’s Discussion and Analysis set forth in our annual report on Form 10-K for the year ended December 31, 2009.





Forward-Looking Statements





Certain statements contained in this quarterly filing, 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





Overview





Aspire International Inc. is a U.S. company, incorporated in October 14, 1997 in the state of Maryland.





On 14 February 2011, the Company disposed of its subsidiary Perfisans Networks Corporation, and consequently its primary mining operations, contained in its subsidiary Aspire GuangXi Inc.





Additionally, on 14 February 2011, the Company entered into an Asset Purchase Agreement with Candid Global Resources (Hong Kong) Ltd., which agreed to sell 100%  of its assets, including the sub-entity known as “Mygos” and related trademarks and intellectual property in exchange for 10,000,000 shares of Aspire.





The Company’s primary business operations, purchased as part of this agreement, is the Mygos website (http://www.mygos.net/) which is an online business-to-consumer shopping mall, headquartered in Shenzhen, in the Guangdong province of China. Mygos operates as a platform to allow users to start their own businesses online and currently hosts over 80,000 active stores.





The Company’s plans during fiscal 2011 are as follows:





During Q1 and Q2 of 2011, the Company will focus on expanding Mygos’s business in the China and South East Asia (including the Hong Kong, Macao, and Taiwan markets).





In Q3 of 2011, the Company intends to begin promoting Mygos in India, Japan, South Korea, and North America.





In Q4 of 2011, the Company intends to begin promoting Mygos in Australia, New Zealand, and Africa.





9




Liquidity and Capital Resources





We are still in the process of developing and implementing our plan of operations and raising additional capital. As such, management is taking action to obtain additional funding.





At September 30, 2010, we had an accumulated deficit of $25,240,032 and negative working capital of $8,397,242. For the nine months ended September 30, 2010, net cash used in operating activities amounted to $173,308 as compared to $62,951 for the nine months ended September 30, 2009.





We have a promissory note in the amount of $2,612,692 that bears interest at 3% per month, with principal and interest payable at December 31, 2005. Management is in default of the payment on maturity and is currently in discussions with the lender to revise the terms. The new terms have not been finalized or agreed to by either side and the lender has not demanded repayment.





At September 30, 2010, we had no material commitments for capital expenditures other than for those expenditures incurred for the mining operations.





It is not anticipated that further financing will need to be raised to carry out our business plans for Mygos for fiscal 2011.





Off-Balance Sheet Arrangements





We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.





Critical Accounting Policies





The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate our estimates and assumptions based upon historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent that actual results differ from those estimates, our future results of operations may be affected. We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements.





Our significant accounting policies are summarized in Note 3 of our annual financial statements filed on Form 10-K on March 18, 2011.  While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s consolidated 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 consolidated results of operations, financial position or liquidity for the periods presented in this report.





ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





The Company’s business activities contain elements of risk. The Company considers a principal type of market risk to be a valuation risk. All assets are valued at fair value as determined in good faith by or under the direction of the Board of Directors (which is based, in part, on quoted market prices). Market prices of common equity securities in general, are subject to fluctuations which could cause the amount to be realized upon sale to differ significantly from the current reported value. The fluctuations may result from perceived changes in the underlying economic characteristics of the Company’s portfolio companies, the relative prices of alternative investments, general market conditions and supply and demand imbalances for a particular security.




10




Neither the Company’s investments nor an investment in the Company is intended to constitute a balanced investment program. The Company will be subject to exposure in the public market pricing and the risks inherent therein.





ITEM 4T.  CONTROLS AND PROCEDURES





(a) Evaluation of Disclosure Controls and Procedures





As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and principle accounting officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).





A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be presented or detected on a timely basis.





Based on management’s assessment, we have concluded that the Company’s internal control over financial reporting was not effective due to the material weaknesses identified below:





Inherent in small business is the pervasive problem of segregation of duties. Given that the Company only employs two executive officers, one of which is a director, segregation of duties is not possible at this stage in the corporate lifecycle. We are planning to mitigate this risk by hiring an adequate amount of staff in the future in order to segregate incompatible duties. We do not presently possess the necessary funds to hire such staff. Until this time that we have adequate funds to hire additional staff, the board will be actively involved in reviewing all significant transactions which are subject to this weakness.





This weakness was identified by our auditors during the audit of the December 31, 2008 fiscal year as filed on Amended Form 10-K. This weakness has existed since inception of the Company and has not been remedied as of September 30, 2010.





(b) Changes in Internal Controls





There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





11





PART II OTHER INFORMATION





ITEM 1.    LEGAL PROCEEDINGS





In the normal course of business, the Company is, and in the future may be, subject to various disputes, claims, lawsuits, and administrative proceedings arising in the ordinary course of business with respect to commercial, employment and other matters, which could involve substantial amounts of damages. In the opinion of management, any liability related to any such known proceedings would have a material adverse effect on the business or financial condition of the Company.  Additionally, from time to time, we may pursue litigation against third parties to enforce or protect our rights under our contracts, trademarks, trade secrets and our intellectual property rights generally.  At the present time, the Company is not the subject of any lawsuits or claims.





ITEM 1A    RISK FACTORS





Not required for smaller reporting companies.





ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





On 9 April 2010, the Company issued 40,000 shares to a consultant for stock promotional services.





On 19 April 2010, the Company issued 50,000 shares to a consultant for legal services.





On 4 June 2010, the Company issued 100,000 shares to a consultant for stock promotional services.





On 7 July 2010, the Company issued 60,000 shares to a consultant for services rendered. Of these shares, 40,000 were subsequently cancelled on 7 October 2010 for non-performance.





On 20 July 2010, the Company issued 1,000,000 shares as collateral for a funding arrangement. A receivable of $200,000 was recorded in respect of this issuance. Subsequent to year-end, these shares were cancelled as discussed in note 10.





On 27 July 2010, the Company issued 950,000 shares and share purchase warrants to a consultant in exchange for $0.01 per share and for services to be provided over 12 months. Each warrant entitles the consultant to purchase one share of the Company at a price of $0.012 and is exercisable at any time within 12 months after the signing date. The value of the services from the issuance of these shares and warrants will be amortized over 12 months.





On 27 July 2010, the Company issued 400,000 shares at a price of $0.012 in settlement of warrants exercised by consultants. A receivable of $4,800 was recorded in respect of this issuance.





On 18 August 2010, the Company issued 350,000 shares to a consultant for services rendered.





On 16 September 2010, the Company issued 775,000 shares at a price of $0.012 in settlement of warrants exercised by consultants. A receivable of $9,300 was recorded in respect of this issuance.





On 16 September 2010, the Company issued 50,000 shares to a consultant for services rendered.





ITEM 3.    DEFAULTS UPON SENIOR SECURITIES





None.





ITEM 4.     REMOVED & RESERVED





None.





ITEM 5.    OTHER INFORMATION





There were no matters required to be disclosed in a Current Report on Form 8-K during the fiscal quarter covered by this report that were not so disclosed.





There were no changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since Company last disclosed these procedures.





12





ITEM 6.    EXHIBITS





(a)

ExhibitsExhibitNumber

Exhibit31.1

Certification of Chief Executive Officer and Principal Accounting Officer, pursuant to Rule 13a - 14(a).*32.1

Certification of Chief Executive Officer and Principal Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*





* Filed herewith





13





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.





Date: April 14, 2011
Aspire International, Inc.By:
/s/ Bok WongName: Bok WongTitle: Chief Executive Officer andChief Financial Officer











14