UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended March 31, 2016
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to________
Commission File Number 000-54985
American Business Services, Inc.
(Exact name of registrant as specified in its charter)
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Colorado
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84-1194104
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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12200 N.W. Ambassador Drive, Suite 326
Kansas City, MO
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64163
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(Address of principal executive offices)
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(Zip Code)
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(816) 464-0508
(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (1) 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 [x] No [ ]
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 (section 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 [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [x]
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(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ]
The number of outstanding shares of the registrant's common stock as of May 23, 2016 was 7,030,000
of its $0.001 par value common stock.
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AMERICAN BUSINESS SERVICES, INC
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FORM 10-Q
For the quarterly period ended March 31, 2016
INDEX
PART 1 – FINANCIAL INFORMATION
PART II – OTHER INFORMATION
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AMERICAN BUSINESS SERVICES, INC
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CONDENSED BALANCE SHEETS
(Unaudited)
All of the Company’s operating expenses were paid for by its parent company, Smith Electric Vehicles Corp. (“Smith”), from Smith’s corporate bank account. Prior to this, the Company did not maintain a bank account, and subsequent to August 7, 2015 no longer maintains a bank account.
The accompanying notes are an integral part of the condensed unaudited financial statements.
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AMERICAN BUSINESS SERVICES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Continued from previous page
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Supplemental Disclosure
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Cash paid for interest
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$ -
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$ -
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Cash paid for income taxes
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$ -
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$ -
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The accompanying notes are an integral part of the condensed unaudited financial statements.
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AMERICAN BUSINESS SERVICES, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS,
FOR THE THREE MONTH PERIODS ENDED MARCH31, 2016 AND 2015
(Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
American Business Services, Inc. (the “Company”, “ABS”, “we”, “us” or “our”), was incorporated in the State of Colorado on September 20, 1991. The Company provides merger and acquisition financial consulting services. The Company may also engage in any other business permitted by law, as designated by the Board of Directors of the Company.
Interim Financial Statements
The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ended December 31, 2016. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 included in our Form 10-K filed with the SEC.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. No potentially dilutive debt or equity instruments were issued or outstanding during the three months ended March 31, 2016 or 2015.
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Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe that their future adoption of any such pronouncements may be expected to have a material impact on its financial condition of the result of its operations as reported in its financial statements.
NOTE 2. GOING CONCERN
The Company has suffered a loss from operations and has negative cash flows from operations, and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of providing financial consulting services on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
NOTE 3. RELATED PARTY PAYABLE
During the three months ended March 31, 2016, the majority stockholder, Smith Electric Vehicles Corp. advanced $7,317 respectively, on behalf of the Company to pay current invoices received for services that had been rendered to the Company. As of March 31, 2016 and December 31, 2015, $910,543 and $93,226, respectively, has been advanced to the Company. These advances are unsecured, bear no interest and are repayable on demand.
NOTE 4. SALE AND TRANSFER OF A MAJOR STOCKHOLDER’S INTERESTS
During the three months ended March 31, 2016 and 2015, there has been no sale or transfer of a major stockholder’s interest.
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As of March 9, 2016, Bryan L. Hansel resigned as President and Chief Executive Officer, John Micek resigned as Chief Financial Officer and Director, and Robert Druten resigned as Director.
As of March 25, 2016 Jacques Schira was appointed as President, Chief Financial Officer, Secretary, and Director, and Geb Byron was appointed as Director.
As of May 10, 2016 Jacques Schira resigned as Chief Financial Officer and John Micek was appointed as Chief Financial Officer and Director.
NOTE 5. COMMON STOCK PLEDGED AS COLLATERAL
On October 5 2015, Smith Electric Vehicles entered into a $1,000,000 loan agreement with Active Way International Limited. The drawdown date of the agreement was one business day after the agreement date for Loan A (repayment of the FDG Note) and Loan B (cash disbursement to Smith) was one business day after the payment to FDG to the borrower. The collateral for this loan agreement is all common stock or other form of derivatives of American Business Services, Inc., now or at any time hereafter, and prior to the termination of the agreement owned or acquired by Smith Electric Vehicles Corp. In the event of default this could result in a change of control of American Business Services, Inc. As of May 16, 2016 this loan has not been repaid.
NOTE 6. SUBSEQUENT EVENTS
In accordance with ASC 855-10. “Subsequent Events” the Company has analyzed its operations subsequent to March 31, 2016 to the date these financial statements were available to be issued and has determined that other than as disclosed above, it does not have any material subsequent events to disclose in the financial statements.
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ITEM 2
. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Trends and Uncertainties
We are currently not aware of any trends that are reasonably likely to have a material impact on our liquidity. The Company may never become profitable if it does not obtain sufficient funds or obtain alternate financing to complete our business plan.
Historically, the Company has loaned money through notes receivable on an ongoing basis to various companies related by common control. At March 31, 2014, all these notes had been sold or repaid.
During the three months ended March 31, 2016, the majority stockholder, Smith Electric Vehicles Corp. advanced $7,317 on behalf of the Company to pay current invoices received for services that had been rendered to the Company. As of March 31, 2016, and December 31, 2015, $100,543 and $93,226 has been advanced to the Company. These advances are unsecured, bear no interest and are repayable on demand.
We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.
General and administrative expenses will continue to increase as we implement sales and marketing initiatives.
Liquidity and Capital Resources
Operating activities
During the three months ended March 31, 2016, we incurred a net loss of $7,317. As a result, we had net cash used for operating activities of $7,317 for the three months ended March 31, 2016.
During the three months ended March 31, 2015, we incurred a net loss of $19,467. As a result, we had net cash used for operating activities of $19,467 for the three months ended March 31, 2015.
Investing activities
During the three months ended March 31, 2016, we did not pursue any investing activities.
During the three months ended March 31, 2015, we did not pursue any investing activities.
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Financing activities
During the three months ended March 31, 2016, we received $7,317 by way of advances under a related party payable from Smith Electric Vehicles Corp. (“Smith”) (an 85.3% owner of American Business Services, Inc.) As a result we generated net cash provided by financing activities of $7,317 during the three months ended March 31, 2016.
During the three months ended March 31, 2015, we received $29,080 by way of advances under a related party payable from Smith Electric Vehicles Corp. (“Smith”) (an 85.3% owner of American Business Services, Inc.). As a result we generated net cash provided by financing activities of $29,080 during the three months ended March 31, 2016.
Results of Operations
Three months ended March 31, 2016 compared to the three months ended March 31, 2015
For the three months ended March 31, 2016, we did not receive any revenues. We incurred general and administrative expenses of $7,317. As a result, we incurred a net loss of $7,317 for the three months ended March 31, 2016.
Comparatively, for the three months ended March 31, 2015, we did not receive any revenues. We incurred general and administrative expenses of $19,467. As a result, we incurred a net loss of $19,467 for the three months ended March 31, 2015.
The decrease in expense in net loss for the three months ended March 31, 2016, compared to the three months ended March 31, 2015 is due to reduction in legal fees.
We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. If we are unable to raise funds for the above purposes, it is uncertain if we will be able to continue as a going operation.
Item 3
. Quantitative and Qualitative Disclosures About Market Risk
Not applicable for smaller reporting companies.
Item 4
. Controls and Procedures
During the quarter ended March 31, 2016, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2016. Based on this evaluation, our president and chief financial officer have concluded that such controls and procedures are effective as of March 31, 2016, to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
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PART II
– OTHER INFORMATION
Item 1. Legal Proceedings
We were not subject to any legal proceedings during the three month periods ended March 31, 2016 or 2015, and, to the best of our knowledge and belief, none are pending or threatened.
Item 1A. Risk Factors
Not applicable for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
No unregistered sales of equity took place during the three month periods ended March 31, 2016 or 2015.
Item 3. Defaults Upon Senior Securities.
No senior securities were issued of outstanding during the three month periods ended March 31, 2016 or 2015.
Item 4. Mine Safety Disclosures
Not applicable to our Company.
Item 5. Other Information
None
Item 6. Exhibits
Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
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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.
Dated: May 23, 2016
American Business Services, Inc.
By:
/s/ Jacques Schira
Jacques Schira
President
/s/ John Micek
John Micek
Chief Financial Officer
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