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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 September 30, 2013


-OR-


[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________


Commission File Number  333-39942


American Business Services, Inc.

 (Exact name of registrant as specified in its charter)


 

 

 

Colorado

 

84-1194104

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)


 

 

 

6521 Ocaso Drive,

Castle Pines, CO

 

80108

(Address of principal executive offices)

 

(Zip Code)


303-730-7939

 (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 [ ]   No [ ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):



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Large accelerated filer        [  ]

 

Non-accelerated filer             [  ]

Accelerated filer                 [  ]

 

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  [ ]      No [x]


The number of outstanding shares of the registrant's common stock, November 4, 2013:   Common Stock  -  7,030,000





































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AMERICAN BUSINESS SERVICES, INC.

FORM 10-Q

For the quarterly period ended September 30, 2013

INDEX


PART 1 – FINANCIAL INFORMATION

 

 

 

 

 

Page

Item 1.  Financial Statements (Unaudited)

 

4

Item 2.  Management's Discussion and Analysis of

  Financial Condition and Results of Operations

 

9

Item 3.  Quantitative and Qualitative Disclosure

  About Market Risk

 

11

Item 4.  Controls and Procedures

 

12


PART II – OTHER INFORMATION



 

 

 

Item 1.  Legal Proceedings

 

13

Item 1A.  Risk Factors

 

13

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

 

13

Item 3.  Defaults upon Senior Securities

 

13

Item 4.  Mine Safety Disclosures

 

13

Item 5.  Other Information

 

13

Item 6.  Exhibits

 

13

 

 

 

SIGNATURES

 

14




3



AMERICAN BUSINESS SERVICES, INC.

CONSOLIDATED BALANCE SHEETS


 

 

Sept. 30, 2013

 

Dec. 31, 2012

(Unaudited)

 

 

 

ASSETS

 

 

 

 

Current assets

 

      Cash

 $          15,644

 $          12,354

             Total current assets

             15,644

             12,354

 

 

 

Total Assets

 $          15,644

 $          12,354

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

 

Current liabilities

 

      Accrued interest payable

 $               481

 $              551

      Note payable - related party - current portion

             11,800

                     -

      Income taxes payable

               1,824

                     -

          Total current liabilties

             14,105

                 551

 

 

 

      Notes payable - related party

             12,000

             12,000

Total Liabilities

             26,105

             12,551

 

 

 

Stockholders' Equity

 

      Preferred stock, $.001 par value;

          10,000,000 shares authorized;  

          none issued and outstanding

                     -

                     -

      Common stock, $.001 par value;

          90,000,000 shares authorized;

          6,480,000 (2012) and 7,030,000 (2013)

               6,540

               7,030

          shares issued and outstanding

               1,260

             25,270

      Retained earnings (deficit)

            (18,261)

           (32,497)

Total Stockholders' Equity

            (10,461)

                (197)

 

 

 

Total Liabilities and Stockholders' Equity

 $          15,644

 $          12,354


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




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AMERICAN BUSINESS SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


 

Three Months

Three Months

Nine Months

Nine Months

 

Ended

Ended

Ended

Ended

 

Sept. 30, 2012

Sept. 30, 2013

Sept. 30, 2012

Sept. 30, 2013

 

 

 

 

 

 

 

 

 

 

Revenue

 $  12,080

 $            -

 $    34,080

 $            -

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

     General and administrative

1,832

 4,027

 23,683

 21,458

 

 1,832

4,027

  23,683

 21,458

 

 

 

 

 

Income (loss) from operations

10,248

  (4,027)

 10,397

  (21,458)

 

 

 

 

 

Other income (expense):

 

 

 

     Realized gain (loss) on securities

    -

   -

      -

  8,200

     Gain on tax estimate

    -

     -

      -

    508

     Interest expense

  (121)

 (186)

   (359)

  (1,486)

 

    (121)

  (186)

  (359)

  7,222

 

 

 

 

 

Income (loss) before

 

 

 

     provision for income taxes

  10,127

  (4,213)

  10,038

(14,236)

 

 

 

 

 

Provision for income tax

      -

     -

   -

     -

 

 

 

 

 

Net income (loss)

 $  10,127

 $  (4,213)

 $  10,038

 $ (14,236)

 

 

 

 

 

Net income (loss) per share

 

 

(Basic and fully diluted)

 $      0.00

 $    (0.00)

 $      0.00

 $     (0.00)

 

 

 

 

 

Weighted average number of

 

 

common shares outstanding

6,480,000

 7,030,000

 6,480,000

6,948,333


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




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AMERICAN BUSINESS SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Nine Months

Nine Months

 

Ended

Ended

 

Sept. 30, 2012

Sept. 30, 2013

Cash Flows From Operating Activities:

   Net income (loss)

 $   10,038

 $  (14,236)

     Adjustments to reconcile net loss to

     net cash provided by (used for)

     operating activities:

 

         Depreciation

      -

   -

         Reserve expense - notes receivable

    -

     -

         Accrued payables

    359

   70

         Gain on tax estimate

 -

   (508)

         Taxes payable

       -

  (1,316)

               Net cash provided by (used for)

               operating activities

 10,397

 (15,990)

 

 

 

Cash Flows From Financing Activities:

   Note payable - borrowings

 $             -

 $  (11,800)

   Sales of common stock

      -

   24,500

               Net cash provided by (used for)

               financing activities

     -

  12,700

 

 

 

Net Increase (Decrease) In Cash

    10,397

  (3,290)

 

 

 

Cash At The Beginning Of The Period

   3,059

    15,644

Cash At The End Of The Period

 $    13,456

 $     12,354

 

 

 

Schedule Of Non-Cash Investing And Financing Activities

None

 

 

 

 

 

Supplemental Disclosure

 

Cash paid for interest

 $              -

 $      1,416

Cash paid for income taxes

 $              -

 $      1,316


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





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AMERICAN BUSINESS SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

(Unaudited)


NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:


American Business Services, Inc. (the “Company”), 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.


Basis of Presentation


The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.


Principles of consolidation


The accompanying consolidated financial statements include the accounts of American Business Services, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.


Cash and cash equivalents


The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.


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 outstanding. Warrants, stock options, and



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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.


Income tax


The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Revenue recognition


Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectibility is reasonably assured.


Property and equipment


Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life.


Financial Instruments


The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheet, approximates fair value.


Stock based compensation


The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.



8



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 new business plan.


In October 2011, ABS changed its tax status from a Subchapter S corporation to a Subchapter C corporation.


Promissory Notes Outstanding


A convertible promissory note to VentureVest Capital Corporation, dated December 31, 2007 in the amount of $11,800 for money which VentureVest Capital loaned to ABS in 2007, which loan was made to be used as working capital for ABS.  This is not an arms length transaction and was a related party transactions, as VentureVest Capital Corporation is controlled by Mr. Ray, an officer and director of ABS.  This note matured on December 31, 2011, and was renewed on January 1, 2012.  The note now matures on December 31, 2013.  The note bears an annual interest of 4% as of January 1, 2010.  This note has been completely paid as of March 13, 2013 for $11,800 plus interest of $1,416 for a total of $13,216.


Promissory Notes Receivable as of September 30, 2013.


There were three convertible promissory notes made to Centennial Growth Equities in 2007 and 2008, for a total of $25,100, which was for funds loaned to Centennial Growth Equities and was used as working capital.  These notes were not arms length transactions and were related party transactions as Mr. Ray, the president of ABS, was also a principal of Centennial Growth Equities at the time the transactions were made.


   a.  A note from Centennial Growth Equities, Inc. a company controlled by Mr. Ray, an officer and director at the time the note was made, dated January 10, 2007 in the amount of $17,000, for money that ABS loaned to Centennial Growth Equities in 2006.  This note matured on December 31, 2008, and was renewed through December 31, 2013.  The note has been accruing interest as of January 1, 2011 at an annual interest of 4% per annum.  No interest has been paid on this note to date.


   b.  A note from Centennial Growth Equities, Inc. a company controlled by Mr. Ray, an officer and director at the time the note was made, dated January 10, 2007, in the amount of $4,200, for money that ABS loaned to Centennial Growth Equities in 2007.  This note matured on December 31, 2011, and was renewed through December 31, 2013.  The note




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began accruing interest as of January 1, 2012 at a rate of 4% per annum.  No interest has been paid on this note to date.


   c.  A note from Centennial Growth Equities, Inc. a company controlled by Mr. Ray, and officer and director at the time the note was made, dated January 10, 2007 in the amount of $3,900 for money that ABS loaned to Centennial Growth Equities in 2008.  This note matured on December 31, 2011, and was renewed through December 31, 2013.  The note began accruing interest as of January 1, 2012 at a rate of 4% per annum.  No interest has been paid on this note to date.


   d.  A note from Original Source Music, Inc., an unaffiliated entity, dated June 1, 2010 in the amount of $2,000 for money loaned to Original Source Music by ABS in 2010.  This amount was used as working capital.  This note matures on June 28, 2013.


The Company lends money through notes receivable on an ongoing basis to various companies related by common control. The notes are due to be repaid to the Company at various dates through December 2013.


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.


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


We did not pursue any investing activities during the nine months ended September 30, 2013 and 2012.


For the nine months ended September 30, 2013, we spent $11,800 on a note payable payment, and received $24,500 from the sale of common stock.  As a result, we had net cash provided by financing activities of $12,700 for the nine months ended September 30, 2013.


We did not pursue any financing activities for the nine months ended September 30, 2012.




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Results of Operations


For the three months ended September 30, 2013, we did not earn any revenues.  We spent $4,027 on general and administrative expenses and $186 on interest expenses.  As a result, we had a net loss of $4,213 for the three months ended September 30, 2013.


Comparatively, for the three months ended September 30, 2012, we earned revenues of $12,080.  We paid general and administrative expenses of $1,832 and interest expense of $121.  As a result, we had a net income of $10,127 for the three months ended September 30, 2013.


The increased net loss for the three months ended September 30, 2013 is the combined result of not earning any revenues during 2013 and greatly increased general and administrative expenses incurred by the shift in business focus.  We have spent additional funds this month searching for clients and maintaining the business.


For the nine months ended September 30, 2013, we did not earn any revenues.  We paid general and administrative expenses of $21,458 and interest expenses of $1,486.  We realized a gain on securities of $8,200 and a gain on tax estimate of $508.  As a result, we had a net loss of $14,236 for the nine months ended September 30, 2013.


Comparatively, for the nine months ended September 30, 2012, we earned revenues of $34,080.  We paid general and administrative expenses of $23,683 and interest expenses of $359.  As a result, we had net income of $10,038 for the nine months ended September 30, 2012.


We spent $2,225 less on general and administrative expenses during the nine months ended September 30, 2013 compared to the same period in 2012.  However, this is countered by the lack of revenues earned.  During 2013, we spent additional funds seeking out new customers and maintaining the business, resulting in the increased net loss.


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.




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Item 4.  Controls and Procedures


During the period ended September 30, 2013, 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.


Evaluation of Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our chief executive officer and principal 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 September 30, 2013.  Based on this evaluation, our chief executive officer and principal financial officers have concluded such controls and procedures to be effective as of September 30, 2013 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

None


Item 1A.  Risk Factors  

Not applicable for smaller reporting companies


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

None


Item 3.   Defaults Upon Senior Securities.

None


Item 4.   Mine Safety Disclosures

Not Applicable


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

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.





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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: November 4, 2013


American Business Services, Inc.


By:

/s/Phil E. Ray

Phil E. Ray

Chief Executive Officer

Chief Financial Officer




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