During the three months ended June 30, 2015, the Company opened a bank account with Bank Midwest N.A., however, no cash was transferred into the account, which incurred service charges that created an overdraft of the account. All of the Companys operating expenses were paid for by its parent company, Smith Electric Vehicles Corp. (Smith), from Smiths corporate bank account. Prior to this, the Company did not maintain a bank account.
As of June 30, 2016 the Company had no bank account. The accompanying notes are an integral part of the condensed unaudited financial statements.
The accompanying notes are an integral part of the condensed unaudited financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS,
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 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 managements 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 and six months ended June 30, 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.
Use of Estimates
The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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 Companys 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 and six months ended June 30, 2016 or 2015.
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.
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NOTE 2. GOING CONCERN
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business.
However, the Company has suffered a loss from operations and has negative cash flows from operations during the six months ended June 30, 2016 and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with ongoing general administrative expenses. These conditions raise substantial doubt about the Companys 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.
These financial statements do not include any adjustments 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.
NOTE 3. RELATED PARTY PAYABLE
In support of the Companys efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances were considered temporary in nature and were not formalized by a promissory note.
During the three and six months ended June 30, 2016, the majority stockholder, Smith Electric Vehicles Corp., advanced $18,486 and $25,803, respectively, on behalf of the Company to pay current invoices received for services that had been rendered to the Company. As of June 30, 2016 and December 31, 2015, $119,029 and $93,226, respectively, has been advanced to the Company. These advances are unsecured, bear no interest and are repayable on demand.
As of June 30, 2016, there is a related party payable to Jacques Schira, for services provided as Corporate Officer and Director in capacity as such. The accrued amount as of June 30, 2016 is $23,333.
NOTE 4. SALE AND TRANSFER OF A MAJOR STOCKHOLDERS INTERESTS
During the three months ended March 31, 2016 and 2015, there has been no sale or transfer of a major stockholders interest.
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.
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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. RELATED PARTIES
We do not have any standard arrangements by which employees or directors are compensated for any services provided as employees or directors, however $11,667 has been paid to Jacques Schira as Corporate Officer and Director in his capacity as such, and a total of $35,000 was charged to operations in the period for these services with $23,333 accrued at June 30, 2016.
The Company occupies office space provided by Smith Electric Vehicles Corp. at no cost. The value of the space is not considered materially significant for financial reporting purposes.
NOTE 6. 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
August
28, 2016 this loan has not been repaid
.
NOTE 7. SUBSEQUENT EVENTS
In accordance with ASC 855-10. Subsequent Events the Company has analyzed its operations subsequent to June 30, 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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