UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

(Mark One)

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

For the quarterly period ended March 31, 2011

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

For the transition period from ______to______.

APEXTALK HOLDINGS, INC.

Exact name of registrant as specified in charter

Delaware		333-153838		26-1402471
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

637 Howard Street

San Francisco, CA 94105

(Address of principal executive offices)

_______________

1-888-494-2330

(Registrant’s telephone number, including area code)

_______________

Not Applicable

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

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

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer o (Do not check if a smaller reporting company)	Smaller Reporting Company x

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

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of May 13, 2011: 3,911,951 shares of common stock.

APEXTALK HOLDINGS, INC.

FORM 10-Q

March 31, 2011

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	21
Item 1A	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	(Removed and Reserved)	21
Item 5.	Other Information	21
Item 6.	Exhibits	21

PART I-- FINANCIAL INFORMATION

Item 1. Financial Statements

APEXTALK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2011 (Unaudited)		December 31, 2010
ASSETS
Current Assets
Cash and cash equivalents	$	5,698,459	$	3,870,882
Accounts receivable from a related company		1,124,796		706,361
Accounts receivable from third parties		667,414		693,021
Other receivables, net		203,082		52,050
Prepaid expenses		7,283		1,442
Deposits paid for acquiring property and equipment		272,842		-
Short-term advance to a related company		609,747		-
Note receivable from a related company				1,851,009
Entrusted bank loan receivable		21,798,448		18,661,811
Current assets of discontinued operations		1,487		1,718
Total Currents Assets		30,383,558		25,838,294
Property and equipment, net		420,524		406,301
Patent, net		8,969		8,969
Noncurrent assets of discontinued operations		17,597		19,521
Total Assets	$	30,830,648	$	26,273,085
LIABILITIES AND EQUITY

Current Liabilities
Accounts payable	$	20,842	$	36,793
Accrued expenses from other payables		183,742		135,395
Advance from customers		1,586,940		1,094,365
Short term note payable		2,539,595		2,527,689
Income tax payable		752,560		2,253,071
Other taxes payable		149,062		-
Current liabilities of discontinued operations		50,838		50,838
Total Current Liabilities		5,283,579		6,098,151

Total Liabilities		5,283,579		6,098,151

Commitments and Contingencies		-		-

Stockholders' Equity
Common stock, authorized 20,000,000 shares, par value $0.001, 3,911,951 shares and 3,370,284 shares issued and outstanding on March 31, 2011 and December 31, 2010, respectively		3,912		3,370
Additional paid-in-capital		11,800,807		8,467,246
Accumulated earnings		8,413,075		4,484,588
Accumulated other comprehensive income		523,541		356,162
Total Stockholders' Equity		20,741,335		13,311,366
Noncontrolling interests		4,805,734		6,863,568
Total Equity		25,547,069		20,174,934

Total Liabilities and Equity	$	30,830,648	$	26,273,085

See accompanying notes to unaudited condensed consolidated financial statements

APEXTALK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME

(Unaudited)

	For the Three Months Ended March 31,
	2011			2010

Consultancy fees earned - from a related company, net	$	711,330		$	-
Consultancy fees earned, net		6,390,524			-
Total Revenue, net		7,101,854			-

Operating Expenses
Payroll expenses		161,886			27,696
Rent and utilities		77,388			5,100
General and administrative		338,938			22,623
Legal and professional fees		138,875			35,689
Total Operating Expenses		717,087			91,108

Operating Income (Loss)		6,384,767			(91,108	)


Other Income
Interest income from entrusted bank loan receivable		582,940			-
Interest income		3,213			-
Total Other Income		586,153			-

Income (Loss) from Continuing Operations before Income Taxes and Discontinued Operations		6,970,920			(91,108	)

Provision for Income Taxes		(1,746,197	)		(1,588	)

Net Income (Loss) from Continuing Operations		5,224,723			(92,696	)

Discontinued Operations, Net of Taxes
Loss from discontinued operations, net of taxes		(2,156	)		(15,386	)
Loss from Discontinued Operations		(2,156	)		(15,386	)

Net Income (Loss)		5,222,567			(108,082	)

Less: Income attributable to noncontrolling interests		1,294,080			-

Net Income (Loss) attributable to stockholders		3,928,487			(108,082	)

Amounts attributable to Stockholders
Income from continuing operations		3,930,643			(92,696	)
Discontinued operations, net of taxes		(2,156	)		(15,386	)
Net income (loss)		3,928,487			(108,082	)

Other Comprehensive Income
Total foreign currency translation gain		111,068			-
Less: foreign currency translation gain attributable to noncontrolling interests		(27,356	)		-
Foreign currency translation gain attributable to stockholders		83,712			-

Comprehensive Income (Loss)	$	4,012,199		$	(108,082	)


Basic and Diluted Net Income (Loss) per Share attributable to stockholders
Net income (loss) per share from continuing operations	$	1.10		$	(0.10	)
Discontinued operations		(0.00	)		(0.01	)
Net income (loss) per share	$	1.10		$	(0.11	)

Weighted average number of common shares outstanding
during the year - Basic and Diluted		3,580,932			962,424

See accompanying notes to unaudited condensed consolidated financial statements

APEXTALK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock				Paid in		Accumulated Earnings		Accumulated Other Comprehensive		Total Stockholders’ Equity		Noncontrolling			Total Equity
	Shares		Amount		Capital				Income				Interest
Balance, December 31, 2010		3,370,284		3,370		8,467,246		4,484,588	356,162			13,311,366	6,863,568				20,174,934

Common stock issued for cash		541,667		542		1,299,458		—	—			1,300,000	—				1,300,000

Acquisition of additional Yi An’s shares from noncontrolling interest		—		—		2,034,103		—		83,667		2,117,770		(3,379,270	)		(1,261,500	)

Net income		—		—		—		3,928,487		—		3,928,487		1,294,080			5,222,567




Foreign currency translation gain		—		—		—		—		83,712		83,712		27,356			111,068

Balance, March 31, 2011 (Unaudited)		3,911,951	$	3,912	$	11,800,807	$	8,413,075	$	523,541	$	20,741,335	$	4,805,734		$	25,547,069

See accompanying notes to unaudited condensed consolidated financial statements

APEXTALK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2011			2010
Cash flows from operating activities
Net income (loss)	$	5,222,567		$	(108,082	)
Less discontinued operations, net of tax		(2,156	)		(15,386	)
Net income (loss) from continuing operations		5,224,723			(92,696	)
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization		31,158			32
In kind contribution of services		—			7,900
Change in operating assets and liabilities:
(Increase) in accounts receivable from related parties		(413,827	)		—
Decrease in accounts receivable from third parties		28,782			—
(Increase) Decrease in other receivables		(150,321	)		1,871
(Increase) in short term advance to a related company		(607,866	)
(Increase) in prepaid expenses		(5,841	)		(22,000	)
(Increase) in other asset		—			(60,000	)
Increase (Decrease) in accounts payable		(15,951	)		2,544
Increase (Decrease) in accrued expenses and other payables		47,694			(3,392	)
Increase in advanced from customers		485,916			—
Increase in other tax payable		148,602			—
(Decrease) in income tax payable		(1,506,461	)		—
Net cash provided by (used in) operating activities from continuing operations		3,266,608			(165,741	)
Net cash (used in) operating activities from discontinued operations		(231	)		(19,877	)
Net cash provided by (used in) operating activities		3,266,377			(185,618	)

Cash flows from investing activities
Payment for purchase of Yi An interests		(1,261,500	)		—
Purchase of equipment		(43,479	)		—
(Increase) in deposits paid to acquiring P&E		(272,001	)		—
Repayment of notes receivable from a related company		1,853,991			—
(Increase) in entrusted bank loan receivable		(3,039,329	)		—
Net cash (used in) investing activities from continuing operations		(2,762,318	)		—
Net cash (used in) investing activities from discontinued operations		—			—
Net cash (used in) investing activities		(2,762,318	)		—

Cash flows from financing activities
Proceeds from issuance of common stock		1,300,000			2,000,000
Proceeds from stockholder loan		—			18,578
Net cash provided by financing activities from continuing operations		1,300,000			2,018,578
Net cash provided by financing activities from discontinued operations		—			100
Net cash provided by financing activities		1,300,000			2,018,678

Effect of exchange rates on cash		23,287			—

Net increase in cash		1,827,346			1,833,060

Cash and cash equivalents from continuing operations at beginning of period		3,870,882			—
Cash and cash equivalents from discontinued operations at beginning of period		1,718			21,710
Cash and cash equivalents at end of period		5,699,946			1,854,770
Less cash and cash equivalents from discontinued operations at end of period		1,487			8,803
Cash and cash equivalents from continuing operations at end of period	$	5,698,459		$	1,845,967

Cash paid during the period for:
Interest	$	—		$	—
Income taxes	$	2,064,606		$	6,350

See accompanying notes to unaudited condensed consolidated financial statements

APEXTALK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. SUMMARY OF ORGANIZATION

Apextalk, Inc. was incorporated on November 7, 2007 under the laws of the state of Delaware. On November 12, 2007, Apextalk, Inc. changed its name to Apextalk Holdings, Inc (“APH”). On April 20, 2011, our Board of Directors unanimously agreed to change our name from Apextalk Holdings, Inc. to Blue Bridge Capital, Inc. (“BBC”) and a majority of the shareholders approved the name change. We filed a Definitive Information Statement on Schedule 14C with the SEC on May 9, 2011. We will file the amended articles of incorporation with the state of Delaware on May 30, 2011. The company, located in San Francisco, California, is a holding company whose subsidiaries provide various telecom services (through September 1, 2010, see Note 4) and financial consulting services.

Apextalk Inc. (“API) was incorporated on June 8, 2004 under the laws of the state of California. The company has integrated VoIP and wireless technology to develop various market driven applications. APH completed the acquisition of API on November 16, 2007 where APH purchased all of the outstanding shares of API.

Guangdong Yi An Investment Consulting Company Limited (“Yi An”) was incorporated in the People’s Republic of China (“PRC” or “China”) on September 7, 2009 as a limited liability company. Yi An engaged in financial consulting, financial advisory, management consulting, and business information consulting in the PRC. On February 1, 2010, Yi An established a 51% held subsidiary named Guangzhou Hua Ying Venture Capital Co., Ltd. (“Hua Ying”) which engaged in financial advisory services in the PRC as a limited liability company. Yi An and its majority owned subsidiary Hua Ying are hereafter referred to as (“Yi An”). On June 1, 2010, APH completed the purchase of 51% ownership of Yi An with the last cash payment made on June 7, 2010. On October 25, 2010, APH completed the purchase of additional 24.37% ownership of Yi An. On March 25, 2011, APH completed the purchase of additional 14.63% ownership of Yi An. As a result, APH owns 90% of the issued and outstanding common stock of Yi An as of March 31, 2011.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Changes in Basis of Presentation

The 2010 financial information has been revised so that the basis of presentation is consistent with that of the 2011 financial information. This revision reflects the financial condition and results of operations of API as discontinued operations for all periods presented. For a summary of discontinued operations see Note 4.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related notes of the Company for the three months ended March 31, 2011 and 2010, and as of March 31, 2011, are unaudited. The unaudited interim condensed consolidated financial information has been prepared in accordance with accounting principles generally accepted in the United State (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnote required by GAAP for complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2010 on Form 10-K that was filed on March 30, 2011. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management reflects all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of operations of the Company for the three months ended March 31, 2011 and 2010, the results of cash flows of the Company for the three months ended March 31, 2011 and 2010, and the financial position of the Company as of March 31, 2011. Interim results are not necessarily indicative of the results to be expected for an entire year or any other future year or interim period.

Consolidation

The accompanying consolidated financial statements include the parent company and its wholly owned subsidiary of API from January 1, 2010 to March 31, 2011 and majority owned subsidiary of Yi An from June 1, 2010 to March 31, 2011. The Company discontinued its telecom operations, API, on September 1, 2010. However, APH still wholly owns API as of March 31, 2011, thus, the financial condition and results of operations of API was included in the consolidated financial statements during the respective periods. All of the material inter-company transactions have been eliminated. The noncontrolling interests represent the noncontrolling shareholders’ 10.00% ownership interest of Yi An. The portion of the income applicable to noncontrolling interests in subsidiary undertaking is reflected in the consolidated statements of operations.

Use of Estimates

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

Concentrations and Risks

Substantially Yi An’s assets are located in the PRC and substantially Yi An’s revenues were derived from customers located in the PRC. In addition, financial instruments that potentially Yi An to significant concentrations of credit risk consist primarily of cash, accounts receivable and short term notes receivable. As of March 31, 2011, Yi An maintained cash balances at financial institutions in the PRC. These cash balances may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limited applicable to financial institutions located in the United States. However, none of Yi An’s cash has been or is currently insured by the FDIC or a similar government sponsored institution. Yi An has not experienced any losses in such accounts and believes it is not exposed to any significant risks related to its cash. However, Yi An monitors the credit ratings of these financial institutions in order to mitigate the company’s credit risk. Further, Yi An mitigates credit risk through procedures that include determination of credit limits, credit approvals, and related monitoring procedures to ensure delinquent receivables are collected.

Yi An’s operations are carried out in China. Accordingly, Yi An’s business, financial condition and results of operations, respectively, may be influenced significantly by the political, economic and legal environments in China as well as by the general state of the economy in China. Yi An’s operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. These include risks are associated with, among others, the political, economic and legal environments and foreign currency exchange. Yi An’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

Cash and Cash Equivalents

The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents. The cash of $5,701,372 is uninsured by FDIC as it is held in the bank accounts in China.

Accounts Receivable and Allowance for Doubtful Accounts

---Financial Consultancy services

The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on managements’ assessment of customer credit history, overall trends in collections and write-offs, and expected exposures based on facts and prior experience. As of March 31, 2011, the Company has recorded $-0- amount allowance for doubtful accounts.

---Value- added Telecom Service

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company evaluates the trends in customers’ payment patterns, including review of specific delinquent accounts, changes in business conditions and external communications available about customers to estimate the level of allowance that is needed to address potential losses that the Company may incur due to the customer’s inability to pay. Accounts are considered delinquent or past due, if they have not been paid within the six-month-term. Delinquent account balances are written off after management has determined that the likelihood of collection is not probable. As of March 31, 2011, the Company has recorded an allowance for doubtful accounts in the amounts of $-0-.

Property and Equipment

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

● Equipment: 3-5 years

● Software: 5 years

● Leasehold improvements: over the lease terms

● Motor vehicles: 5 years

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

Intangible Assets

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

Impairment of Long-lived Assets

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

Fair Value of Financial Instruments

FASB ASC 825, Disclosure about Fair Value of Financial Instruments, requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

The carrying value of cash and cash equivalents, accounts receivable, other receivable, notes receivable, entrusted bank loan receivable, accounts payable, notes payable and other payables approximate their fair values because of the short-term nature of these instruments. Management of the Company is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Revenue and Cost Recognition

---Financial Consultancy services

The Company recognizes revenues from consultancy services when services are performed and collectability is reasonably assured.

---Value- added Telecom Service

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

Advertising expenses

The Company expenses advertising costs as incurred. Advertising expenses were $99,145 and $-0- for the three months ended March 31, 2011 and 2010, respectively.

Income Taxes

The Company accounts for income taxes under the FASB ASC 740, Income Taxes. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period included the enactment date.

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

Foreign Currency Transactions

The functional currency of Yi An is Renminbi (“RMB”). Foreign currency transactions during the period are translated to the functional currency at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the approximate rates of exchange at that date. Non-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.

The financial statements are translated into U.S. Dollars (“US$”) using the closing rate method. The balance sheet items are translated into US$ using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. All exchange differences are recorded within equity.

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

		March 31, 2011
Balance sheet items, except for share capital, additional paid-in capital and retained earnings as of period ended		RMB1=US$0.15244
Amounts included in the statements of operations and cash flows for the period		RMB1=US$0.15197

The translation gain recorded for the three months ended March 31, 2011 was $83,712.

No presentation is made that RMB amounts have been, or would be, converted into US$ at the above rates. Although the Chinese government regulations now allow convertibility of RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that RMB could be converted into US$ at that rate or any other rate.

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

Other Comprehensive Income

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

Earnings (Loss) per Share

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC 260, Earnings Per Share. As of March 31, 2011 and 2010, there were no diluted shares outstanding.

Business Segments

The Company operates in two segments and segments information is presented in Note 5.

Reclassification

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

Recent Accounting Pronouncements

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

NOTE 3. SHARE TRANSFER AGREEMENT DATED JUNE 18, 2010

On June 18, 2010, APH entered into another share transfer agreement with the shareholder (“Yi An noncontrolling interest shareholder”) who owned 49% of the issued and outstanding common shares of Yi An. Pursuant to this share transfer agreement, the Yi An noncontrolling interest shareholder will transfer 39% of Yi An’s issued and outstanding common shares to APH at an aggregate purchase price of RMB 21,642,616, which shall be paid in full within 720 days following June 18, 2010.

On October 25, 2010, APH completed a partial closing of the stock transfer agreement dated June 18, 2010 by paying the Yi An noncontrolling interest shareholder $2,000,000 for 24.37% of Yi An’s issued and outstanding common shares.

On March 25, 2011, APH completed the remaining closing of the stock transfer agreement dated June 18, 2010 by paying the Yi An noncontrolling interest shareholder $1,261,500 for 14.63% of Yi An’s issued and outstanding common shares. As a result, APH owns 90% of the issued and outstanding common stock of Yi An. Changes in a parent’s ownership interest in which the parent retains its controlling financial interest in its subsidiary are accounted for as an equity transaction. The carrying amount of the noncontrolling interest was adjusted to reflect the change in APH’s interest in Yi An. The difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest was adjusted were recognized in APH’s stockholders’ equity. As a result of the above transaction on purchasing 14.63% of Yi An common shares, APH’s paid-in capital was increased by $2,117,770 during the three months ended March 31, 2011

NOTE 4. DISCONTINUED THE OPERATIONS OF APEXTALK INC.

On November 19, 2010, API entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Inno Global Inc. (“Innoglo”), a California company, The Purchase Agreement was effective September 1, 2010 and provided for the transfer of cash equal to $2,753 and gross accounts receivable equal to $ 2,244 net of an allowance for doubtful accounts equal to $395 by API to Innoglo in exchange for the assumption of certain API liabilities by Innoglo. Specifically, Innoglo assumed deferred revenue from API equal to $4,602. The net assets transferred from API to Innoglo were equal to the net liabilities assumed by Innoglo from API. As such, no gain or loss is recognized on the transaction. Pursuant to the closing of the Purchase Agreement, APH transferred API’s telecom customers to Innoglo and discontinued its telecom business operations.

The following table summarized the assets and liabilities of the discontinued operations, excluding intercompany balances eliminated in consolidated, at March 31, 2011 and December 31, 2010, respectively:


	3/31/2011 (Unaudited)		12/31/2010
Assets in discontinued operations
Current assets:
Cash and cash equivalents	$	1,487	$	1,718
Accounts receivable, net of allowance		-		-
Total current assets		1,487		1,718

Non-current assets:
Property, plant and equipment, net		17,597		19,521

Total assets in discontinued operations	$	19,084	$	21,239

Liabilities in discontinued operations
Accounts payable	$	10,419	$	10,419
Accrued expenses		40,419		40,419

Total liabilities in discontinued operations	$	50,838	$	50,838

The results of operations of API for the three months ended March 31, 2011 and 2010 presented below:

	Three Months Ended
	3/31/2011			3/31/2010

Revenue	$	-		$	3,730
Cost of revenue		-			7,105
Gross loss		-			(3,375	)
Net loss		(2,156	)		(15,386	)
Net loss attributable to the Company	$	(2,156	)	$	(15,386	)

Per share information attributable to the Company
Basic and diluted net loss per common shares	$	(0.00	)	$	(0.01	)
Average common shares outstanding - basic and diluted		3,580,932			962,424

NOTE 5. SEGMENT INFORMATION

Upon the closing of the first acquisition of Yi An , both APH and Yi An agreed that Yi An would be a subsidiary of APH as of June 7, 2010. However, upon the discontinuing operation of API on September 1, 2010, therefore, we only have consulting services segment for the three months ended March 31, 2011 while only have value-add telecom service segment for the three months ended March 31, 2010. As the result, no table related to the three months ended March 31, 2011 and 2010 segment information is present.

NOTE 6. SHORT-TERM ADVANCE TO A RELATED COMPANY

As of March 31, 2011, the Company has a short-term advance of $609,747 to Guangzhou China Royal Pawn Co. Ltd. (“China Royal Pawn” see Note 15). Advance to the related company is unsecured, interest free and repayable on demand. The amount was repaid in early April 2011.

NOTE 7. NOTES RECEIVABLE FROM RELATED COMPANY

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

NOTE 8. ENTRUSTED BANK LOAN RECEIVABLE

Since 2010 Yi An entered into entrusted loan arrangements with certain bankers in the aggregate amount of $16,768,037, in which Yi An acts as the entrusting party, the bankers act as the lender and a related company, acts as the borrower (the “Entrusted bank loans receivable from a related party”). The Entrusted bank loans receivable from a related party of $6,097,468 bears interest at 8.4% per annum and another Entrusted bank loans receivable from a related party of $7,621,835 bears interest at 20% per annum, and the new Entrusted bank loans in 2011 of $3,048,734 bears interests at 8% per annum, All notes will be wholly repayable within twelve months. The interest income arising from the Entrusted bank loans receivable from a related party for the three months ended March 31, 2011 was $512,717.

During 2010, Hua Ying entered into entrusted loan arrangements in aggregate amount of $5,030,411 with banks, in which Hua Ying acts as the entrusting party, the banks act as the lender and two third parties, act as the borrowers (the “Entrusted bank loans receivable”). The Entrusted bank loans receivable of $533,528 and $1,905,459 to a third party bear interest at 11.12% and 6% per annum respectively and will be wholly repayable within twelve months. The Entrusted bank loan receivable of $2,591,424 to a third party bears interest at 6% per annum and will be wholly repayable within twelve months. The interest income arising from the Entrusted bank loan receivable for the three months ended March 31, 2011 was 870,023.

NOTE 9. PROPERTY AND EQUIPMENT

At March 31, 2011 and December 31, 2010 property and equipment were as follows:

	March 31, 2011 (Unaudited)		December 31, 2010

Computer and Office Equipment	$	59,145	$	57,138
Motor Vehicles		381,247		338,085
Leasehold Improvement		80,917		80,705
Less accumulated depreciation		(100,785)		(69,627)
	$	420,524	$	406,301

Depreciation expense for the three months ended March 31, 2011 and 2010 was $31,158 and $32, respectively.

NOTE 10. SHORT TERM NOTE PAYABLE

As of March 31, 2011 and December 31, 2010, the Company has cash advanced from a third party of $2,539,595 and $2,527,689, which is unsecured, interest free and repayable on demand.

NOTE 11. INCOME TAXES

The Company accounts for income taxes under FASB ASC 740, Income Taxes. Under FASB ASC 740, clarification is given on the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, FASB ASC 740, Income Taxes, describes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Yi An was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable tax rate is 25% in 2011 and 2010.

NOTE 12. LEASE COMMITMENTS

Operating Lease Commitments

Yi An leased office spaces from third parties under an operating lease which expire at various dates from January 2010 through June 30, 2014 at various monthly rent and management fee totaling from $603 to $13,425.

APH leased office space from a company that owned by the Chairman of the Company under an operating lease which expires on December 31, 2011 at a monthly rental rate of $2,000.

As at March 31, 2011, the Company had an outstanding commitment with respect to the above operating leases, which are due as follows:

Year ending December 31	Amount
2011	$	252,720
2012		195,223
2013		159,041
2014		100,240
2015		68,900
Total	$	776,124

NOTE 13. STOCKHOLDERS’ EQUITY

Common Stocks

On February 24, 2011, the Company issued 541,667 shares common stock to Foshan Royal Investment Ltd., a New Jersey company, at a purchase price of $2.40 per share, for $1,300,000 in cash.

NOTE 14. STATUTORY RESERVES

As stipulated by the relevant laws and regulations for enterprises operating in the PRC, Yi An is required to make annual appropriations to a statutory surplus reserve fund. Specifically, Yi An is required to allocate 10% of its profits after taxes, as determined in accordance with the PRC accounting standards applicable to Yi An , to a statutory surplus reserve until such reserve reaches 50% of the registered capital of Yi An. As of December 31, 2010, Yi An provided $969,150 statutory reserve which is included in accumulated earnings of the Company’s Stockholders’ equity.

NOTE 15. RELATED PARTY TRANSACTIONS

---Value- added Telecom Service

The current U.S. office space is sub-leased from the company that owned by the chairman of the Company during 2011 and 2010. The rent expense for the three months ended March 31, 2011 and 2010 is $6,000 and $6,000, respectively.

During the three months ended March 31, 2011, the Company paid $5,000 consultancy fees to a company that is owned by the Chairman of the Company.

During the three months ended March 31, 2010, API accrued compensation for key management personnel for the administrative and managerial services rendered to the company. The total compensation accrued for the three months ended March 31, 2010 is $1,125.

In addition on the compensation for key management personal accrued by API. as stated above, for the three months ended March 31, 2010, key management personnel contributed administrative and managerial services to APH with a fair value of $7,900.

---Financial Consultancy services

On July 1, 2010, Yi An entered into a two-year strategic alliance agreement with China Royal Pawn, a related company. A director of both APH and Yi An is also one of the five directors of China Royal Pawn. This director owns shares in APH, but no shares in Yi An. According to the agreement, Yi An would refer clients to the related company, and receive 10% of the fee charged by the related company as referral commission, and an additional 30% as consultancy fee for risk control services provided regarding the referred clients.

During the three months period ended March 31, 2011, Yi An received net consultancy fees of $711,330 from the related company, China Royal Pawn. Total accounts receivable of $1,124,796 from this related company is recorded as of March 31, 2011.

As of March 31, 2011, the Company has a short-term advance of $609,747 to China Royal Pawn. The advance is unsecured, interest free and repayable on demand. The amount was repaid in early April 2011.

Since 2010, Yi An entered into entrusted loan arrangements with certain bankers in the aggregate amount of $16,768,037, in which Yi An acts as the entrusting party, the bankers act as the lender and a related company, acts as the borrower (the “Entrusted bank loans receivable from a related party”). The Entrusted bank loans receivable from a related party of $6,097,468 bears interest at 8.4% per annum and another Entrusted bank loans receivable from a related party of $7,621,835 bears interest at 20% per annum, and the new Entrusted bank loans in 2011 of $3,048,734 bears interests at 8% per annum, All notes will be wholly repayable within twelve months. The interest income arising from the Entrusted bank loans receivable from a related party for the three months ended March 31, 2011 was $512,717.

NOTE 16. CONCENTRATIONS

As of March 31, 2011, 99% of Company’s net assets are located in the PRC.

---Financial Consultancy services

As of March 31, 2011, 13% of revenue earned was due from Customer A.

NOTE 17. LEGAL PROCEEDINGS

On December 16, 2010, a third party trading company commenced an action against the Company in the Supreme Court of the State of New York, for compensatory damages and an award of attorney’s fees. In the action, Dongguan Suile Trading Co. Ltd. (“Dongguan”) sought compensatory damages equal to $2,500,383, plus interest and cost, pursuant to the terms of a loan Agreement, in which it alleged the Company had defaulted.

As of March 31, 2011, the above legal proceeding was not settled. However, the Company has verbally agreed to pay Dongguan the full amount of its claim equal to $2,539,595 and is awaiting the preparation of the Stipulation of Discontinuance to be prepared by Dongguan’s attorney.

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

NOTE 18. STOCK PURCHASE AGREEMENT DATED NOVEMBER 17, 2009

On December 14, 2009, APH assisted its then existing shareholders (the “Apextalk Shareholders”) to close a portion of a stock purchase agreement (the “Agreement”) with API, Global Apex Holdings, Inc. (“GAH”), a Delaware corporation whose shareholders were identical to the Apextalk Shareholders, Global Apex, Inc. (“GAI”), a California corporation and a wholly owned subsidiary of Global Apex Holdings and five individual purchasers set forth in the Agreement (the “Purchasers”).

Pursuant to the Agreement, the Apextalk Shareholders agreed to transfer to the Purchasers an aggregate of 413,736 shares of APH’s common stock (the “Purchased Shares”), representing 90% of the APH’s issued and outstanding common stock, at an aggregated purchase price of $300,000 (the “Purchase Price”). After the final closing of the Stock Purchase, the Purchasers aggregately hold 90% of the APH’s issued and outstanding common stock as of Decemb31, 2009.

Subject to the terms and condition of the Agreement, APH will transfer 70% of its equity interest in API to GAI, and APH will retain the remaining 30% equity interest in API. As of May 13, 2011, the transfer has not completed due to the complications arise from operations and of net assets transfer. APH is planning to complete this transfer by the end of June 2011.

As additional consideration, APH agreed to grant GAH the right to receive a cash payment in the amount of $30,000 for each $1,000,000 invested into the Company of up to $4,000,000 in the aggregate from outside investors. During 2010, GAH received $120,000 in cash payments from the APH related to the $4,000,000 common stocks issued to the outside investors during the year ended at December 31, 2010.

NOTE 19. SUBSEQUENT EVENTS

On April 14, 2011, Dongguan requested that the Court of the State of New York allow it to withdraw its pending motion for Court Order Approving Stipulation for Settlement of Claim schedule for argument on April 18, 2011. As of March 31, 2011, the above legal proceeding was not settled. However, the Company has verbally agreed to pay Dongguan the full amount of its claim equal to $2,539,595 and is awaiting the preparation of the Stipulation of Discontinuance to be prepared by Dongguan’s attorney.

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements, including the risks and uncertainties described below and other factors we describe from time to time in our periodic filings with the U.S. Securities and Exchange Commission (the “SEC”). We therefore caution you not to rely unduly on any forward-looking statements. The forward-looking statements in this report speak only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Corporate History and Structure

We are a Delaware company with subsidiaries and affiliate entity in both U.S. and China.

Apextalk Holdings, Inc., hereinafter referred to as the “Company,” “we,” “us,” or “our”) was incorporated in the State of Delaware on November 7, 2007. On November 16, 2007 we entered into a share exchange agreement with Apextalk, Inc., a California based corporation, whereby Apextalk, Inc. became our wholly owned subsidiary. On November 18, 2007, we issued 89,619 common shares (post reverse split) to TLMS International, Inc. and 44,810 common shares (post reverse split) to Spencer Luo for in exchange for an aggregate $111,038 investment in us.

On December 16, 2009, we entered into a share transfer agreement by and among the Company, Guangdong Yi An Investment Consulting Co., Ltd (“Yi An”), Ms Weiling Liang, and Mr. Yu Chen. The share transfer transaction was approved by the Chinese Government on March 9, 2010 and Yi An became a 51% owned subsidiary as of June 7, 2010. On June 18, 2010, we entered into a new share transfer agreement with Ms Weiling Liang, for the purchase of additional 39% Yi An equity interest, in the amount of approximately $3,200,000 (“Purchase Price”). On March 25, 2011, the Company completed the final partial closing of the transaction and fulfilled its obligation by paying Ms. Liang $1,261,500 or approximately 38.68% of the Purchase Price in exchange for 14.63% of Yi An’s issued and outstanding common stock. As a result, Yi An became a 90% owned subsidiary of the Company. The transaction was duly approved and registered with Bureau of Foreign Trade & Economic Cooperation of Guangzhou Municipality and Administration of Industry & Commerce of Guangzhou Municipality.

Yi An was founded in September 2009 and is located in Guangzhou, Guangdong Province in the People’s Republic of China. Yi An is a consulting company which engages in financial consulting, management consulting, and business information consulting. Yi An provides various services to its clients, including generating customer credit information for use by short-term lenders, and assisting them to establish and improve internal controls and compliance systems and procedures. It currently operates four offices in Guangzhou, Beijing, Foshan and Dongguan.

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

Business Overview

The Company discontinued its telecom business effective September 1, 2010 and since this date, Yi An became the Company’s major operating entity. On March 25, 2011, the Company completed the closing of the stock transfer agreement dated June 18, 2010, and fulfilled its obligation pursuant to the Share Transfer Agreement by paying Ms. Liang $1,261,500 in exchange for 14.63% of Yi An’s issued and outstanding common stock. As a result, the Company owns 90% of the issued and outstanding common stock of Yi An. As we continue to increase our equity interest in Yi An and discontinue our telecom business, we expect Yi An to be our sole contributor of revenue and net income.

In response to the characteristics of the private economy and the financial markets in China, Yi An has established a proprietary database which can quickly collect the market resources, optimize resource allocation, and promote the rapid growth of clients. The Company has formed a development strategy which aims to enable it to take a leading position in the financial industry value chain.

After the basic business model is established, the Company plans to expand its business development bases throughout the developed regions across the nation in accordance with the established strategic plans, attract professional resources, and rapidly grow its business in wider regions, thus expanding its business scales and benefiting from the first-mover advantage;

The institutional client bases of Yi An include: small loan companies, pawn companies, guarantee companies, investment companies, commercial banks, and so on. The basic strategies for development of institutional clients are:

●	Focusing on developing financial institution clients with influence in the region;

●	Giving priority to institutions which bring quick results, require less processing and operate short-term loans, such as small loan companies and pawn companies;

●	Gradual development of guarantee company clients which have a relatively long history, clients with high royalty rates and flexible liquidity raising methods;

●	Acquiring more commercial bank clients in the future.

Since its establishment, Yi An has given priority to developing relationships with investment and financing trade associations which have strong influence, local government backing, mature development and non-profit status as its partners. Yi An has quickly obtained strong resource support and converted them into business benefits via cooperation with Guangdong SME Financing Promotion Association and the “SME Investment & Financing Magazine”. The Company steadily develops partnerships with guarantee and pawn associations, finance associations, private associations and departments of local governments.

Business Plan

We aim to capture early opportunities in the market to grow rapidly to become a strong full service provider of financing advisory services to private companies in China. Our strategy is to build a strong, well-known, and highly respected brand within the financial management service industry.

The following outlines our business plan for the next 12 months:

1.	The first 90 days, we will continue to focus on our financial advisory consulting service in Beijing and major cities in Guangdong Province in China.

	Yi An is based in Guangzhou, and has vigorously expanded its business throughout the Pearl River Delta and Beijing area since it was founded.

	Based on our year-to-date statistics, we expect Yi An’s consulting service to continue to grow rapidly throughout the year of 2011. To maintain the growing trend, we will continue our customer-relationship- building strategy by sending our sales managers to visit target Small-and-Medium Enterprises (SMEs) Associations in the major cities of China.. We currently actively collaborate with trade associations such as Guangdong SME Financial & Listing Promotion Association, and trade magazines such as “SME Investment & Financing Magazine” to attract new clients.

2.	During the next 180 days, we will focus on maintaining the rapid growth of Yi An business, as well as improving earnings.

	We will expand our business cooperating partners to other trade associations, such as Guarantee & Mortgage Industry Associations, Finance Associations, Private Industry Associations, Financial Institutions, and Local government offices in many regions.

	We are planning to open additional offices in Shanghai and other major cities located in China. We will target SMEs. Our new offices will provide the same business consulting services as our current four offices. We expect the opening of these additional offices will expand our business network to the local clients, as well as diversify our source of revenue geographically. Having clients located in different geographic areas diversifies our business and mitigates the government policy risk which we would face if we were concentrated in a single geographic area.

	Results of Operation for the Three Months Ended March 31, 2011 and 2010

	The following table presents certain consolidated statement of operations information for the three months ended March 31, 2011 and 2010. The discussion following the table is based on these results.

	2011			2010

Consultancy fees earned - from a related company, net	$	711,330		$	-
Consultancy fees earned, net		6,390,524			-
Total Revenue, net		7,101,854			-

Operating Expenses
Payroll expenses		161,886			27,696
Rent and utilities		77,388			5,100
General and administrative		338,938			22,623
Legal and professional fees		138,875			35,689
Total Operating Expenses		717,087			91,108

Operating Income (Loss)		6,384,767			(91,108	)


Other Income
Interest income entrusted bank loan receivable		582,940			-
Interest income		3,213			-
Total Other Income		586,153			-

Income (Loss) from Continuing Operations before Income Taxes and Discontinued Operations		6,970,920			(91,108	)

Provision for Income Taxes		(1,746,197	)		(1,588	)

Income (Loss) from Continuing Operations		5,224,723			(92,696	)

Discontinued Operations, Net of Taxes
Loss from discontinued operations, net of taxes		(2,156	)		(15,386	)
Loss from Discontinued Operations		(2,156	)		(15,386	)

Net Income (Loss)		5,222,567			(108,082	)

Less: Income attributable to noncontrolling interests		1,294,080			-

Net Income (Loss) attributable to stockholders		3,928,487			(108,082	)

Amounts attributable to Stockholders
Income from continuing operations		3,930,643			(92,696	)
Discontinued operations, net of taxes		(2,156	)		(15,386	)
Net income (loss)		3,928,487			(108,082	)

Other Comprehensive Income
Total foreign currency translation gain		111,068			-
Less: foreign currency translation gain attributable to noncontrolling interests		(27,356	)		-
Foreign currency translation gain attributable to stockholders		83,712			-

Comprehensive Income (Loss)	$	4,012,199		$	(108,082	)

Revenue: We generated $7,101,854 in revenue for the three months ended March 31, 2011, representing an increase of $7,101,854 compared to revenue of $0 during the same period in 2010. The increase in revenue was mainly attributable to the revenue generated by our newly acquired subsidiary, Yi An. For the three months ended March 31, 2011, 90.0% of our revenue was generated from consulting services we provided in the areas of business financial consulting, financial advisory, management consulting, and business information consulting to private financial institutions and small-and-medium-sized enterprises in Beijing and major cities in Guangdong Province. The remaining 10% was generated as a result of consulting services we provided to China Royal Pawn for client development and risk management. We generated $0 revenue for the same period in 2010 due to the discontinuation of our telecom business..

Payroll expenses: Payroll expenses were $161,886 for the three months ended March 31, 2011 and $27,696 for the same period in 2010, representing an increase of $134,190 or 485%. The increase was primarily due to the additional personnel we acquired with the acquisition of Yi An.

Rent and utilities: The rent and utilities were $77,388 for the three months ended March 31, 2011, compared to $5,100 in the same period in 2010, representing an increase of $72,288 or approximately 1,417%. Our expenses for rent and utilities increased because we increased the office space that we rent in order to meet our growing needs.

General and Administrative Expenses: General and administrative expenses include sales, taxes, start-up expenses, depreciation, advertising, travel and entertainment expenses. Our general and administrative expenses were $338,938 for the three months ended March 31, 2011, compared to $22,623 for the same period in 2010, representing an increase of $316,315 or 1,398%. The increase was primarily due to the expansion of scale and scope of our business after the acquisition of Yi An. Specifically, we incurred additional costs related to advertising equal to $ 99,145.

Legal and professional fees: The legal and professional fees were $138,875 for the three months ended March 31, 2011 and $35,689 for the same period in 2010, representing an increase of $103,186 or 289%. The increase was primarily attributable to our need for additional legal, accounting and other professional services as a result of our acquisition of Yi An.

Liquidity and Capital Resources

As of March 31, 2011, the Company’s current assets were $30,383,558 and current liabilities were $5,283,579. Cash and cash equivalents totaled $5,698,459 as of March 31, 2011 and the Company’s shareholders’ equity at March 31, 2011 was $20,741,335. The Company had cash provided by operating activities from continuing operations for the three months ended March 31, 2011 of $3,266,608 and cash used in operating activities from continuing operations equal to $165,741 for the same three month period in 2010, respectively. The Company had net cash used in investing activities in continuing operations of $2,762,318 and $-0- for the three months ended March 31, 2011 and 2010, respectively. The Company had net cash provided by financing activities in continuing operations of $1,300,000 and $2,018,578 for the three months ended March 31, 2011 and 2010, respectively. The Company had net cash used in discontinued operations of $231 and $19,777 for the three months end March 31, 2011 and 2010, respectively.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in Note 2 to the consolidated financial statements included in this quarterly report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company's operating results and financial condition.

Recent Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls. Our Chief Executive Officer and Chief Accounting Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of our first fiscal quarter 2011 pursuant to Rule 13a-15(b) of the Securities and Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On December 16, 2010, Dongguan Suile Trading Co., Ltd. (“Dongguan”) commenced an action against us in the Supreme Court of New York, alleging that we defaulted on terms in an agreement (the “Dongguan Agreement”) between us and Dongguan, entitling Dongguan to compensatory damages and an award of attorney’s fees. In the action, Dongguan sought compensatory damages equal to $2,500,383, plus interest and costs, pursuant to the terms of the Dongguan Agreement.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

On February 24, 2011, the Company issued a total of 541,667 shares of common stock to Foshan Royal Investment, Ltd. in exchange for $1,300,000 pursuant to a Stock Purchase Agreement and its amendment in reliance upon the exemption provided by Section 4(2) of the Securities Act.

These securities qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance of the securities by the Company did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. The Company did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, the Purchaser had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.”

Item 3. Defaults Upon Senior Securities.

None

Item 4. (Removed and Reserved.)

Item 5. Other Information.

None

Item 6. Exhibits.

(a) Exhibits

31.1 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

32.2 Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

SIGNATURES

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

		APEXTALK HOLDINGS, INC.
		Registrant

Date: May 16, 2011		By: /s/ Hui Liu
		Hui Liu
		Chief Executive Officer


Date: May 16, 2011		By: /s/ Shan Liu
		Shan Liu Chief Financial and Accounting Officer

Apextalk Holdings Inc 10-Q