UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

  X .  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2015

      .  TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission file number 333-143602

AI DOCUMENT SERVICES, INC.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE		20-8675798
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
250 Park Avenue West Atlanta, GA		30313
(Address of Principal Executive Offices)		(Zip Code)

404-458-3924

(Issuer's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.  Ye      .    No  X .

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      .    No  X .

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

Large Accelerated Filer      .  Accelerated Filer      .  Non-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 Securities Exchange Act of 1934) (check one): Yes      .    No  X .

The number of shares of the Registrant’s Common Stock outstanding as of November 12, 2015 was 87,030,000.  

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AI DOCUMENT SERVICES, INC.

Table of Contents

 

PART I-- FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements:
	Balance Sheets as of September 30, 2015 and December 31, 2014 (Unaudited)	3
	Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014 (Unaudited)	4
	Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014 (Unaudited)	5
	Notes to Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3	Quantitative and Qualitative Disclosures About Market Risk	11
Item 4.	Controls and Procedures	11
PART II-- OTHER INFORMATION
Item 1	Legal Proceedings	12
Item 1A	Risk Factors	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18

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ITEM 1. FINANCIAL INFORMATION

AI DOCUMENT SERVICES, INC.

Balance Sheets

(Unaudited)

		September 30, 2015		December 31, 2014
ASSETS
CURRENT ASSETS
Cash	$	3,722	$	-
Inventory		25,000
Total current assets		28,722		-
FURNITURE AND EQUIPMENT  (net of accumulated depreciation of $2,866)		241,014		-
GOODWILL		292,519		-
TOTAL ASSETS	$	562,255	$	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	36,673	$	-
Short-term loan payable		34,051		-
Accrued expenses		108,161		89,815
Net liabilities of discontinued operations (Due to supplier – net)		4,372		4,372
Total current liabilities		183,257		94,187
LONG-TERM DEBT (including accrued interest of $44,364)		504,214		-
TOTAL LIABILITY		687,471		-
STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value; 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding respectively		1,000		-
Common stock - $0.001 par value; 99,000,000 shares authorized; 87,030,000 and 86,860,000  shares issued and outstanding,  respectively		87,030		86,860
Additional paid-in capital		46,330		13,500
Accumulated deficit		(259,576)		(194,547)
Total stockholders’ deficit		(125,216)		(94,187)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	562,255	$	-

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

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AI DOCUMENT SERVICES, INC.

Statements of Operations

For the Three and Nine Months Ended September 30, 2015 and 2014

(Unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2015		2014		2015		2014
Net sales	$	32,671	$	-	$	32,671	$	-
Cost of sales		29,125		-		29,125		-
Gross loss		3,546		-		3,546		-
General and administrative expenses		59,090		6,168		64,590		13,675
Interest Expense		3,985		689		3,985		2,113
Loss from continuing operations		(59,529)		(6,857)		(65,029)		(15,788)
Income from discontinued operations		-		2,681		-		8,916
Net (Loss)	$	(59,529)	$	(4,176)	$	(65,029)	$	(6,872)
Net income (loss) per common share - basic and diluted
Continuing operations	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Discontinued operations		0.00		0.00		0.00		0.00
Net loss	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Weighted average number of common shares outstanding – basic and diluted		86,860,000		47,800,000		86,860,000		22,738,462

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

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AI DOCUMENT SERVICES, INC.

Statements of Cash Flows

For the Nine Months Ended September 30, 2015 and 2014

 (Unaudited)

		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(65,029)	$	(6,872)
Depreciation		2,866		-
Adjustments to reconcile net (loss) to net cash used in operating activities:
Increase in accounts payable and accrued expenses		18,617		6,872
Net Cash Used in Operating Activities		(43,546)		-
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from business combination		10,889		-
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of issuable common stock		34,000		-
Increase in short-term loan		2,379		-
		36,379
NET CHANGE IN CASH AND CASH EQUIVALENTS		3,722		-
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		-		-
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,722	$	-
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
CASH PAID FOR:
INTEREST	$	-	$	-
INCOME TAX	$	-	$	-
Assets (exclusive of cash) acquired for stock in business combination	$	561,399	$	-
Liabilities acquired for stock in business combination	$	572,288	$	-

The accompanying notes are an integral part of these financial statements

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AI DOCUMENT SERVICES, INC.

Notes to Financial Statements

September 30, 2015

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS

AI Document Services, Inc. (the “Company”) was formed as a line of business by Actuarial Ideas, Inc. in 1982 and became a separate legal entity, incorporated in the State of Delaware, on March 19, 2007 involved in preparing and drafting pension plans. In recent years the market demand for defined benefit pension plans declined significantly causing the Company to discontinue this business during the fourth quarter of 2013.

In November 2013, the Company entered into an Acquisition Agreement with Creative Edge Nutrition, Inc. under which, as amended, the Company acquired the exclusive right to manufacture and sell the natural nutraceutical supplements of Chesapeake Nutraceuticals and Innovative Fulfillment in exchange for 30,000,000 newly-issued shares of its common stock. During 2014 all product sales, purchases and shipments were made through and with the assistance of Innovative Fulfillment Corp.

In November 2013, the Company entered into a Spinoff Agreement with Mark Cohen, who was one of its officers and directors, as well as largest shareholder, under which the Company agreed to sell all of its assets relating to the business of preparing and modifying pension plans in exchange for all of the liabilities specifically associated with that business and the return by Mr. Cohen of 3,000,000 shares of the Company’s common stock.  As a result of the Spinoff Agreement the Company ceased to be engaged in preparing and modifying pension plans.  The operations of the Company prior to the Spinoff are reflected as discontinued operations in the accompanying financial statements.

On August 31, 2015, the Company entered into a Share Exchange Agreement under which all of the outstanding shares of Diaspora Foods International, L.L.C. and Asante Restaurant LLC were exchanged for 35,330,000 shares of AI’s common stock and 1,000,000 newly-issued shares of AI’s preferred stock (the “Exchange”). The 35,330,000 shares were acquired from former holders of the shares who contributed to the Company’s treasury on August 31, 2015. The preferred shares are nonconvertible and have no rights except that each share gives the holder 35 votes in any shareholder election.

The effect of this share exchange is more fully described in NOTE 7 – BUSINESS COMBINATION

NOTE 2 - BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company cannot take advantage of being an emerging growth company under the JOBS Act because it had gone public prior to December 8, 2011.

Basis of Presentation

The financial statements have been prepared in accordance with both accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. The operating results for the nine-month period ended September 30, 2015 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2015 or for any future period.

These unaudited condensed financial statements and notes should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and the From 8K filed on September 14, 2015 which includes the audited financial statements of Diaspora Foods International, LLC and Asante Restaurant, LLC as of December 31, 2014 and for the period from inception (July 19, 2014) to December 31, 2014. .

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Inventories

Inventories consist of food and beverage items which are stated at the lower of cost or market value. Cost is determined by the first-in, first-out, average method. Cost was determined at September 30, 2015 by the relative value at acquisition.

Property and Equipment

Purchases of property and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the assets, primarily 5 years, using the straight-line method. Cost was determined at September 30, 2015 by the relative value at acquisition.

Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in property charges and other.

Intangible Assets

The Company’s indefinite-lived intangible assets consist primarily of goodwill. Indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually.

Long-Lived Assets

Long-lived assets, which are to be held and used, including intangible assets and property and equipment, are periodically reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If an indicator of impairment exists, the Company compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment is measured as the difference between fair value and carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs.

Revenue Recognition

The company’s restaurant revenue is recognized at time of sale. All revenue is presented net of sales tax collections.

Basic and Diluted Loss Per Common Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period after giving retroactive effect to the reverse and forward splits.  Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period after giving retroactive effect to the reverse and forward splits. Shares issuable under the convertible note were not included in the calculation of earnings per share because they would not have been dilutive.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

  

NOTE 3 – GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At September 30, 2015, the Company had an accumulated deficit of $259,576, a working capital deficiency of $154,535 and no committed source of debt or equity financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern which is dependent upon the Company’s ability to achieve profitable operations or obtain adequate financing. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

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NOTE 4 – PROPERTY AND EQUIPMENT   

Property and equipment consist of the following at September 30, 2015:

Furniture	$	63,477
Tooling equipment		123,305
Computer equipment		10,096
Others		47,002
Total		243,880
Less: accumulated depreciation after merger		(2,866)
Property & equipment, Net	$	241,014

NOTE 5 – LOAN PAYABLE

The Company has a loan payable of $459,850 to Enoyloh, LLC which is due 48 months from the date proceeds were received including accrued interest which ranged from July to November 2014. The loan bears interest at the rate of 12.5% per annum. Interest is payable concurrent with principal payments. Maturity will be accelerated if the Company’s annual sales reach $ 2,500,000.

The loan is collateralized by the Company’s inventory and was personally guaranteed by Marvin Woods. Mr. Woods was released from the guarantee after the Share Exchange Agreement described in Note 1 was executed. Enoyloh, LLC is controlled by a minority shareholder of Asante Restaurant LLC.

 

NOTE 6 - COMMON STOCK

In September 2015, the Company received $34,000 from several unrelated parties for the right to receive 170,000 shares of restricted common stock the certificates for which will be issued before the end of 2015. These shares are reflected as outstanding common stock in the accompanying unaudited balance sheet as of September 30, 2015.

NOTE 7 – LEASE

The Company has a lease covering the 6,247 square foot facility which houses the Asante Restaurant in Atlanta, GA. The lease covers 30 months commencing August 2014 and calls for annual lease payments of $62,470 plus 8% of the Company’s annual sales in excess of $780,475. The lease is renewable for a five-year period at an annual rental equal to 7% of sales if the Company’s annual sales have reached $2,750,000.

NOTE 8 – BUSINESS COMBINATION

The acquisition that was completed on August 31, 2015 was accounted for using the acquisition method under ASC Topic 805, Business Combinations. Under the acquisition method, the purchase price was allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The total value of shares exchanged and issued for the acquisition was zero. Goodwill of $292,519 was recorded in connection with this acquisition. Goodwill represents the excess of the purchase price over the fair value of the assets acquired, net of the liabilities assumed. The carrying value of goodwill is reviewed for possible impairment in accordance with the authoritative guidance on goodwill, intangibles and other. The Company will assess possible impairments to goodwill at least annually and otherwise when events or changes in circumstances indicate that an impairment condition may exist. In addition to the annual impairment test, goodwill will be evaluated each reporting period to determine whether events and circumstances would more likely than not reduce the fair value of a reporting unit below its carrying value.

In accordance with Accounting Standards Update (“ASU”) No. 2011-08, Testing Goodwill for Impairment, companies are permitted to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If, after assessing qualitative factors, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If deemed necessary, a two-step quantitative test is performed to identify the potential impairment and to measure the amount of goodwill impairment, if any. Any required impairment losses are recorded as a reduction in the carrying amount of the related asset and charged to results of operations.

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Upon completion of the acquisition on August 31, 2015, the Company changed its business plan to operating a restaurant and food products business. The operations of business of selling natural nutraceutical supplements have been treated as a Discontinued Operation.

If the acquisition had occurred on January 1, 2015, the Pro Forma Statement of Operations would be:

Net sales	$	550,223
Cost of sales		355,253
Gross income		194,970
General and administrative expenses		500,589
Interest Expense		34,535
Net Loss	$	(340,154)

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date of September 30, 2015 through November 20, 2015, the date these financial statements were issued. The Management of the Company determined that there were no reportable subsequent events to be disclosed.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

Except for the historical information contained herein, the matters addressed in this Item 2 constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed below under the heading "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q, that could cause actual results to differ materially from those anticipated by the Company's management. The Private Securities Litigation Reform Act of 1995 (the "Act") provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the Act. The Company undertakes no obligation to publicly release the results of any revisions to its forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.  The Company cautions readers that important factors may affect the Company’s actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company. These factors include the Company’s lack of historically profitable operations, dependence on key personnel, the success of the Company’s business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission, press releases and/or other public communications. Unless the context otherwise requires, the words "AI," the "Company," "we," "us" and "our" refer to AI Document Services, Inc.

This management's discussion and analysis should be read in conjunction with the management’s discussion included in the Company’s Annual report on Form 10-K for the year ended December 31. 2014 filed with the Securities and Exchange Commission.

Current Developments

During the fourth quarter of 2014, we began consideration of ceasing to be in the nutraceutical business. We finalized that decision on that matter during 2015. On August 31, 2015 we acquired Diaspora Foods International, L.L.C. and Asante Restaurant LLC. Upon completion of the acquisition on August 31, 2015, the Company changed its business plan to operating a restaurant and food products business. The operations of business of selling natural nutraceutical supplements have been treated as a Discontinued Operation.

During the nine months ended September 30, 2015, our operations included only one month of the restaurant’s activity.

The restaurant business is run by a well-known chef who is an Emmy®-nominated television host, best-selling cookbook author, and lead chef for First Lady Michelle Obama’s “Let’s Move” campaign. It is in the first full year of its operations and is concentrating on training staff and establishing a name in the community.

Liquidity and Capital Resources

As of September 30, 2015, we had $28,722 in total current assets, and total $183,257 in current liabilities. Accordingly, we had a working capital deficit of $154,535 as of September 30, 2015.

Operating activities used $43,546 in cash for the nine months ended September 30, 2015, as compared with $-0- used for the nine months ended September 30, 2014. Our negative operating cash flow for September 30, 2015 was mainly a result of our net loss for the period, offset by the effects of depreciation and the increase in accounts payable and accrued liabilities.

Investing activities for the nine months ended September 30, 2015 generated $10,889 in cash due to Asante acquisition, as compared with $-0- for the nine months ended September 30, 2014.

Financing activities for the nine months ended September 30, 2015 generated $36,379 in cash, as compared with $-0- for the nine months ended September 30, 2014. Proceeds from financing activities consisted primarily of proceeds from issuable common stock and short term loans.

We currently have no funds or committed source of funds. We intend to seek financing through contacts of our President and other business advisors and consultants. During the six months ended June 30, 2015, minority shareholders paid $13,000 in professional fees on our behalf. That amount is included in Accrued Expenses in the Company’s balance sheet. In September 2015, the Company received $34,000 from several unrelated parties for the right to receive 170,000 shares of restricted common stock which will be issued before the end of 2015.

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We cannot provide any assurances about the likelihood or timing of being successful in obtaining funding. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of December 31, 2014 that states that our lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given that we will generate sufficient revenue or obtain any financing that may be necessary in order to continue as a going concern.

Off Balance Sheet Arrangements

The company has long term loan which was collateralized by the Company’s inventory and is personally guaranteed by Marvin Woods. Mr. Woods was released from the guarantee after the Share Exchange Agreement described in Note 1 was executed.

We have no special purpose entities that provide off-balance sheet financing, liquidity or market or credit risk support, nor do we engage in swap agreements, or outsourcing of research and development services, that could expose us to liability that is not reflected on the face of our financial statements.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Critical Accounting Policies

The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.

Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements.  There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made.  Note 2 to the financial statements included in the Company’s Annual Report on Form 10K includes a summary of the significant accounting policies and methods used in the preparation of our financial statements. 

Seasonality

We are in the process of evaluating our business operations. We cannot predict how or if seasonality will impact the operations that emerge following our evaluation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurances that information required to be disclosed by the Company in its periodic reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurances that information required to be disclosed by the Company in its periodic reports that are filed under the Exchange Act is accumulated and communicated to our Principal Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

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Evaluation of disclosure controls and procedures.

  

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of management including our Principal Executive Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on the evaluation, the Company's Principal Executive Officer has concluded that the Company's disclosure controls and procedures are not effective to provide reasonable assurances that information required to be disclosed by the Company in the reports that it 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 are operating in an effective manner. The Company is taking steps to improve its procedures and expects to have effective controls in place shortly.

   

Changes in internal controls over financial reporting.

  

There were no changes in the Company's internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

  

This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

No legal proceedings were initiated by or served upon the Company in the nine-month period ended September 30, 2015.

From time to time the Company may be named in claims arising in the ordinary course of business.  Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

ITEM 1A. RISK FACTORS

If any of the following risks develop into actual events, then our business, financial condition, results of operations and/or prospects could be materially adversely affected. If that happens, the market price of our common stock, if any, could decline, and investors may lose all or part of their investment.

Risks Related to the Business

1.

AI has virtually no financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

At September 30, 2015, we have an accumulated deficit, a working capital deficiency and no source of debt or equity financing. These factors raise substantial doubt about our ability to continue as a going concern which is dependent upon our ability to achieve profitable operations or obtain adequate financing. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the year ended December 31, 2014 that states that our lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given that we will generate sufficient revenue or obtain necessary financing to continue as a going concern.

2.

Recessionary economic cycles generally have a greater impact on restaurants than on many other industries.

We will be in the restaurant business going forward. During recessionary cycles, people tend to reduce expenditures on various discretionary items, such as going out to restaurants. Therefore, our results are likely to be severely impacted during any future recessionary cycles.

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3.

Asante must compete with many other restaurants which have greater financial resources and more traditional menus and offerings.

Asante’s success depends on its ability to compete with many other restaurants which have more traditional menus and offerings as well as greater financial resources. Many of these competitors are more well-known and established in the community. We cannot predict the likelihood of success in dealing with these competitors.

4.

Food safety and food-borne illness concerns may have an adverse effect on our business.

Food-borne illnesses are widely covered in the media. If products that we specialize in serving are mentioned in any media reports, our business may be severely hurt. If products that we purchase from vendors contain any harmful materials and a customer becomes sick, our business may not recover.

5.

Failure to obtain or maintain licenses could seriously hurt our business.

Failure to obtain and maintain required licenses and permits through our negligence or problems with the issuing agencies or failure to comply with alcoholic beverage or food control regulations could lead to the loss of our liquor and food service licenses and, thereby, harm Asante’s business possibly beyond repair.

6.

We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, which requires us to incur accounting and legal fees in connection with the preparation of such reports.  These additional costs could reduce or eliminate our ability to fund our operations and may prevent us from meeting our normal business obligations.

We are subject to file periodic reporting requirements of the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder. In order to comply with these regulations, our independent registered public accounting firm has to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel has to review and assist in the preparation of such reports. The future costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect on the amount of time to be spent by our auditors and attorneys.

We do not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.

7.

We have only two directors, which limits our ability to establish effective independent corporate governance procedures and increases the control of our president.

We have only two directors, both of whom are officers of the Company. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues.

Until we have a larger board of directors which would include some independent members, if ever, there will be limited oversight of our president’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.

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Risks Related to Our Common Stock

8.

Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.

We have no committed source of financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of AI because the shares may be issued to parties or entities committed to supporting existing management.

9.

Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability which may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.

Our articles of incorporation and applicable Delaware law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's written promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us which we may never be unable to recoup.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.  In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors are likely to materially reduce the market and price for our shares, if such a market ever develops.

10.

Currently, there is no public market for our securities, and there can be no assurances that any public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.

There has not been any trading market for our common stock, and there is currently (and never has been) any public market whatsoever for our securities. Notwithstanding the fact that a trading symbol (AIDC) had been assigned to our common stock by FINRA, there can be no assurance that:

·

any market for our shares will develop;

·

the prices at which our common stock will trade; or

·

the extent to which investor interest in us will lead to the development of any active, liquid trading market.  Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

Also, failure to remain current in our future periodic reports with the SEC would lead to loss of OTCQB quoting privileges.

In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of AI and general economic and market conditions.  No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

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Because of the anticipated low price of the securities, many brokerage firms may not be willing to effect transactions in our securities.

11.

Without a public market there is no liquidity for our shares of common stock, and our shareholders may never be able to sell their shares, which may result in a total loss of their investment.

Our common shares are not listed on any exchange or quotation system. There currently is no market for our shares. Consequently, our shareholders will not be able to sell their shares in an organized market place and may have to sell their shares privately. If this happens, our shareholders might not receive a price per share which they might otherwise have received had there been a public market for our shares.

12.

Legislation, including the Sarbanes-Oxley Act of 2002, may make it more difficult for us to retain or attract officers and directors.

The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. We are required to comply with the Sarbanes-Oxley Act. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

13.

Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions which will create a lack of liquidity and make trading difficult or impossible.

The trading of our securities, if any, will likely be in the over-the-counter market which is commonly referred to as the OTCQB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.

Rule 3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects the market liquidity for our common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

·

the basis on which the broker or dealer made the suitability determination, and

·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.

14.

The market for penny stocks has experienced numerous frauds and abuses which could adversely impact investors in our stock.

We believe that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

·

Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

·

Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

·

"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;

·

Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

·

wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

15.

If our common stock is quoted on the OTCQB and a public market for our common stock develops, short selling could increase the volatility of our stock price.

 

Short selling occurs when a person sells shares of stock which the person does not yet own and promises to buy stock in the future to cover the sale. The general objective of the person selling the shares short is to make a profit by buying the shares later, at a lower price, to cover the sale. Significant amounts of short selling, or the perception that a significant amount of short sales could occur, could depress the market price of our common stock. In contrast, purchases to cover a short position may have the effect of preventing or retarding a decline in the market price of our common stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our common stock. As a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on over-the-counter bulletin board or any other available markets or exchanges. Such short selling if it were to occur could impact the value of our stock in an extreme and volatile manner to the detriment of our shareholders.

Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws which prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.

There is no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future.  Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws.  Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions.  Because our securities have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. Accordingly, investors should consider the secondary market for our securities to be a limited one.

16.

Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over AI.

Our articles of incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

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17.

We do not expect to pay dividends in the foreseeable future.

We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

18.

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protections against interested director transactions, conflicts of interest and similar matters.

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and NASDAQ Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities which are listed on those exchanges or NASDAQ Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than necessary, we have not yet adopted these measures.

Because none of our directors are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations. We intend to comply with all corporate governance measures relating to director independence if and when required.

19.

You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.

We currently are trying to file all delinquent filings. However, our reporting obligations are automatically suspended by operation of statute under Section 15(d) of the Securities Exchange Act of 1934 if we have less than 300 shareholders or have not filed a registration statement on Form 8A. If this occurs after the year in which our Registration Statement became effective, we may file periodic reports voluntarily with the SEC, but will no longer be obligated to file those periodic reports with the SEC and your access to our business information would then be even more restricted. We are not required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners are not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Securities Exchange Act of 1934 until we have both 500 or more security holders and greater than $10 million in assets and are required to register our shares under Section 12 of the Exchange Act. This means that your access to information regarding our business will be limited.

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

On August 31, 2015, the Company the Company entered into a Share Exchange Agreement under which all of the outstanding shares of Diaspora Foods International, L.L.C. and Asante Restaurant LLC were exchanged for 35,330,000 shares of AI’s common stock and 1,000,000 newly-issued shares of AI’s preferred stock (the “Exchange”).  

In September 2015, the Company received $34,000 from several unrelated parties for the right to receive 170,000 shares of restricted common stock which will be issued before the end of 2015.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number		Description
31.1		Section 302 Certification Of Chief Executive Officer
31.2		Section 302 Certification Of Chief Financial Officer
32.1		Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 – Chief Executive Officer
32.2		Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 – Chief Financial Officer

SIGNATURES

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

A1 Document Services, Inc.

          (Registrant)

/s/ Marvin Woods

Marvin Woods

Title: President and Chief Financial Officer

November 20, 2015

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