10-Q

 UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended February 28, 2015

☐   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: 333-178210

SERVICE TEAM INC.

(Exact name of registrant as specified in its charter)

Nevada	61-1653214
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

18482 Park Villa Place, Villa Park, California 92861

(Address of principal executive offices) (Zip Code)

(714) 538-5214

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    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 (Sec.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-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  

Large accelerated filer ☐         Accelerated filer ☐         Non-accelerated filer ☐        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  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of April 10, 2015:  12,525,647 common shares and 100,000 shares of preferred stock.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

TABLE OF CONTENTS

		Page
Financial Statements
	Consolidated Balance Sheets as of February 28, 2015 (unaudited) and August 31, 2014	3
	Consolidated Statements of Operations for the three and six months periods ended February 28, 2015 and February 28, 2014  (unaudited)	4
	Consolidated Statement of Shareholders Deficit for the year ended August 31, 2014 (audited) and the six months ended February 28, 2015 (unaudited)	5
	Consolidated Statement of Cash Flows for the six months ended February 28, 2015 and February 28, 2014 (unaudited)	6
	Notes to the Consolidated Financial Statements	7

2

SERVICE TEAM INC.

CONSOLIDATED BALANCE SHEETS

AS OF FEBRUARY 28, 2015  (UNAUDITED) AND AUGUST 31, 2014

	2/28/15			8/31/14
ASSETS
Cash	$	34,456		$	7,457
Accounts receivable, net of allowances of $12,323 and $2,802, respectively		154,572			186,026
Deferred financing costs		16,397			-
Total current assets		205,425			193,483
Property and equipment, net		8,647			9,641
Prepaid expenses		9,000			9,000
TOTAL ASSETS	$	223,072		$	212,124
LIABILITIES & SHAREHOLDERS' (DEFICIT)
Accounts payable	$	227,496		$	172,117
Promissory note – related party		158			27,158
Convertible note, net of discounts of $24,975 and $0, respectively		30,025			-
Contingent Liability		54,100			54,100
Accrued expense		61,610			56,403
Accrued interest		3,644			3,987
TOTAL LIABILITIES		377,033			313,765
Common stock, $0.001 par value, 74,000,000 authorized, 12,525,647 and 12,485,647 issued and outstanding as of February 28, 2015 and August 31, 2014, respectively.		12,526			12,486
Preferred stock – Series A, $0.001 par value, 100,000 authorized, 100,000 and 0 issued and outstanding as of February 28, 2015 and August 31, 2014, respectively.		100			-
Additional paid in capital		1,521,193			955,650
Accumulated deficit		(1,687,780	)		(1,109,777	)
TOTAL SHAREHOLDERS' (DEFICIT)		(153,961	)		(101,641	)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)	$	223,072		$	212,124

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

3

SERVICE TEAM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTH PERIODS ENDING

FEBRUARY 28, 2015 AND FEBRUARY 28, 2014 (UNAUDITED)

	3 Months Ended 2/28/15			3 Months Ended 2/28/14			6 Months Ended 2/28/15			6 Months Ended 2/28/14
REVENUES
Sales	$	612,394		$	442,895		$	1,166,021		$	920,118
COST OF SALES
Cost of sales		558,323			345,920			1,071,706			657,426
Gross Margin		54,071			96,975			94,315			262,692
OPERATING EXPENSES
General & administrative expenses		608,938			174,599			668,160			331,830
Total Operating Expenses		608,938			174,599			668,160			331,830
INCOME (LOSS) FROM OPERATIONS		(554,867	)		(77,624	)		(573,845	)		(69,138	)
OTHER INCOME (EXPENSE)
Interest expense		(3,692	)		(5,522	)		(4,158	)		(17,745	)
Total Other Income (Expense)		(3,692	)		(5,522	)		(4,158	)		(17,745	)
NET INCOME (LOSS)	$	(558,559	)	$	(83,146	)	$	(578,003	)	$	(86,883	)
Weighted average number of common shares outstanding - basic and fully diluted		12,525,647			12,414,277			12,518,796			12,392,434
Net income (loss) per share - basic and fully diluted	$	(0.04	)	$	(0.01	)	$	(0.05	)	$	(0.01	)

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

4

SERVICE TEAM INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS DEFICIT FOR THE YEAR

ENDED AUGUST 31, 2014 AND THE SIX MONTHS

ENDED FEBRUARY 28, 2015 (UNAUDITED)

	Common Stock				Preferred Stock				Additional Paid In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance,  August 31, 2013		12,367,314	$	12,368		-	$	-	$	950,302	$	(1,184,133	)	$	(221,464	)
Imputed Interest on Related Party Debt		-		-		-		-		10,716		-			10,716
Shares Issued for Cash		118,333		118		-		-		34,632		-			34,750
Net Income		-		-		-		-		-		74,356			74,356
Balance, August 31, 2014		12,485,647	$	12,486		-	$	-	$	995,650	$	(1,109,777	)	$	(101,641	)
Imputed Interest on Related Party Debt		-		-		-		-		683		-			683
Beneficial Conversion Feature		-		-		-		-		22,000		-			22,000
Preferred shares issued for Services		-		-		100,000		100		498,900		-			499,000
Shares Issued for Cash		40,000		40		-		-		3,960		-			4,000
Net Loss		-		-		-		-				(578,003	)		(578,003	)
Balance, February 28, 2015		12,525,647	$	12,526		100,000	$	100	$	1,521,193	$	(1,687,780	)	$	(153,961	)

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

5

SERVICE TEAM INC.

 CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIODS ENDED FEBRUARY 28, 2015

AND FEBRUARY 28, 2014 (UNAUDITED)

	2/28/15			2/28/14
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(578,003	)	$	(86,883	)
Adjustments to reconcile net loss with cash provided by (used in) operations:
Imputed rent expense		-			3,000
Debt discount amortization		2,025			6,833
Stock based compensation		499,000			-
Deferred financing cost amortization		1,103			-
Depreciation		994			-
Imputed interest		683			9,532
CHANGE IN OPERATING ASSETS AND LIABILITIES
Accounts Receivable		31,454			6,660
Accrued Expenses		4,864			292
Accounts Payable		55,379			(14,819	)
Net Cash Provided by (Used in) Operating Activities		17,499			(75,385	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchase of fixed assets		-			-
Net Cash Used in Investing Activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock		4,000			15,000
Proceeds from loans with Hallmark Venture Group, Inc. *		-			5,280
Payments on loans with Hallmark Venture Group, Inc. *		(27,000	)		(39,000	)
Deferred financing costs		(17,500	)		-
Proceeds from convertible notes payable		50,000			-
Payments on convertible notes payable		-			(5,000	)
Net Cash Provided by (Used in) Financing Activities		9,500			(23,720	)
Net Increase (Decrease) In Cash and Cash Equivalents		26,999			(99,105	)
Cash at Beginning of Period		7,457			100,895
Cash at End of Period	$	34,456		$	1,790
Supplemental Disclosures
Interest Paid	$	-		$	-
Taxes Paid	$	-		$	-
Non-cash transactions:
Beneficial conversion feature	$	22,000		$	-
Shares issued for subscriptions receivable	$	-		$	10,000
* Related Party

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

6

SERVICE TEAM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AT AUGUST 31, 2014 AND FEBRUARY 28, 2015

(UNAUDITED)

NOTE 1 - ORGANIZATION

Organization

Service Team Inc. (the “Company”) was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  

The Company has established a fiscal year end of August 31.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders’ Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The condensed consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. 

Use of Estimates

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

7

Going Concern

The Company's consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.  However, we have incurred continued losses, have a net working capital deficiency of $171,608, and have an accumulated deficit of $1,687,780 as of February 28, 2015.  There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its operations by issuing common shares and debt. As of February 28, 2015, the Company had sold 6,000,000 shares to Hallmark Venture Group, Inc. at $0.001 per share for net funds to the Company of $6,000 and received capital contributions of $23,027. The Company has also sold 1,969,014 shares to various individuals and received net funds of $340,383.  Hallmark Venture Group, Inc. has also loaned the Company $166,279.  The major shareholder, Hallmark Venture Group, Inc., has committed to advancing additional funds as may be required for the operation of the Company. We cannot be certain that capital will be provided when it is required.

Cash and Equivalents

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at February 28, 2015, or August 31, 2014.

Concentration of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.

Accounts Receivable

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of February 28, 2015, and August 31, 2014 was $12,323 and $2,802, respectively.

Accounts Receivable and Revenue Concentrations

The Company’s wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of February 28, 2015.  One customer represented about 20% of total receivables as of August 31, 2014.  

During the six months period ended February 28, 2015, the Company had one customer that represented 19% of total sales.  During the three months ended August 31, 2014, the Company had one customer that represented about 22% of total sales. 

8

Inventory

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at February 28, 2015 or August 31, 2014.

Property and Equipment

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $994 of depreciation expense during the six months ended February 28, 2015.  There was no depreciation expense recorded during the six month period ended February 28, 2014.

Net property and equipment were as follows at February 28, 2015 and August 31, 2014: 

	2/28/15			8/31/14
Equipment	$	243,444		$	243,444
Vehicles		15,000			15,000
Furniture		1,500			1,500
Subtotal		259,944			259,944
Less: accumulated depreciation		(251,297	)		(250,303	)
Total	$	8,647		$	9,641

Lease Commitments

Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month.  The location consists of three acres of land with two buildings a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet.  The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of imputed rent expense was recorded for the six months ended February 28, 2015 and 2014, respectively.

Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

9

Fair Value of Financial Instruments

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has various financial instruments that must be measured under the new fair value standardincluding: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:  

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1. 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.

The following table presents assets and liabilities that were measured and recognized at fair value as of February 28, 2015 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2014 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

Income Taxes

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at February 28, 2015 and August 31, 2014 where it cannot conclude that it is more likely than not that those assets will be realized.

10

Revenue Recognition

Trade Leasing Division

The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. 

Service Products Division

The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.

As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy).

Share Based Expenses

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Stock Based Compensation

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.

11

Net Loss Per Share

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. As of February 28, 2015 and 2014, because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.

Recent Accounting Pronouncements
 

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

12

NOTE 3 – CAPITAL STOCK

The Company’s authorized capital is 74,000,000 common shares with a par value of $0.001 per share and 100,000 preferred shares with a par value of $0.001 per share.  

2015

During the six months ended February 28, 2015, the Company sold 40,000 shares for $4,000.

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Venture Group, Inc. (a related party) in exchange for services’. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.

As of February 28, 2015, and August 31, 2014 the Company has not granted any stock options.  

2014

During the six months ended February 28, 2014 the Company sold 63,333 shares for $25,000 of cash from an unrelated investor.

During the three months ended May 31, 2014 the Company sold 55,000 shares for $9,750 of cash from three unrelated investors.

During the twelve months ended August 31, 2014, $10,716 of interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc. based upon the average balance during the period at an interest rate of 10 percent.

Stock Based Compensation

We have accounted for stock based compensation under the provisions of FASB Accounting Standards codification (ASC) 718-10-55.  (Prior authoritative literature:  FASB Statement 123 (R), Share-based payment.)  This statement requires us to record any expense associated with the fair value of stock based compensation.  Determining fair value requires input of highly subjective assumptions, including the expected price volatility.  Changes in these assumptions can materially affect the fair value estimate.

13

NOTE 4 – DEBT TRANSACTIONS

Convertible Note Payable – Third Party

On February 5, 2015, the Company entered into a Convertible Note Agreement with Tangiers Investment Group, LLC (“Tangiers”), pursuant to which the Company sold to Tangiers a 10% Convertible Promissory Note in the original principal amount of $50,000 (the “First Tangiers Note”). The First Tangiers Note has a maturity date of February 5, 2016, and is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). “Market Price” means the lowest trading price for the Common Stock during the twnty trading day period ending on the latest complete trading day prior to the conversion date. “Fixed Conversion Price” shall mean $0.001. The shares of common stock issuable upon conversion of the First Tangiers Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933.

The Company evaluated the First Tangiers Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability. The beneficial conversion feature discount resulting from the conversion price of $0.29 below the market price on February 5, 2015 of $0.40 provided a value of $22,000. In addition, an original issuance discount was recorded in accordance with the agreement in the amount of $5,000. During the periods ended February 28, 2015 and August 31, 2014, $2,025 and $0, respectively, of the debt discount was amortized.   Accrued interest related to the First Tangiers Note as of February 28, 2015 and August 31, 2014 was $347 and $0, respectively.

Convertible Note Payable – Related Party

On August 10, 2014, Hallmark Venture Group, Inc. acquired the Note, with principal of $27,158 and accrued interest of $3,987, to Howard Nunn, Jr. for 80,000 shares of Service Team Inc. Common Stock owned by Hallmark Venture Group, Inc.  The Note was then canceled and the amounts due on the Note were added to the amounts due Hallmark Venture Group, Inc.  The option to convert to shares was voided.

The Company evaluated the Nunn Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.75 below the market price on June 21, 2013 of $1.25 provided a value of $23,003; which was recorded as an increase to additional paid in capital and a reduction of debt due to the discount. The discount was amortized completely during the year ended August 31, 2014. Accrued interest was $3,297 and $3,297 as of February 28, 2015, and August 31, 2014, respectively.

Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the six months ended February 28, 2015, and February 28, 2014, the Company repaid net funds of $27,000 and $33,720, respectively.  During the six months ended February 28, 2015, and February 28, 2014, the Company has imputed interest at a reasonable rate of 10 percent totaling $683 and $9,532, respectively.

14

NOTE 5 - RELATED PARTY TRANSACTIONS

Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the six months ended February 28, 2015, and February 28, 2014, the Company repaid net funds of $27,000 and $33,720, respectively.  During the six months ended February 28, 2015, and February 28, 2014, the Company has imputed interest at a reasonable rate of 10 percent totaling $683 and $9,532, respectively.

Preferred Stock Issued for Services

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Venture Group, Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

Lease Commitments

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of rent expense was imputed for the six months ended February 28, 2015 and February 28, 2014, respectively.

NOTE 6 – INCOME TAXES

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $623,530 as of February 28, 2015, that will be offset against future taxable income.  The available net operating loss carry forwards of approximately $623,530 will expire in various years through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

15

The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company’s loss before income taxes.  The components of these differences are as follows at February 28, 2015 and August 31, 2014:

	2/28/15			8/31/14
Net tax loss carry-forwards	$	623,530		$	548,338
Statutory rate		34	%		34	%
Expected tax recovery		212,000			186,435
Change in valuation allowance		(212,000	)		(186,435	)
Income tax provision	$	-		$	-
Components of deferred tax asset:
Non capital tax loss carry forwards	$	212,000		$	186,435
Less: valuation allowance		(212,000	)		(186,435	)
Net deferred tax asset	$	-		$	-

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Litigation

None.

Operating Leases

Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month.  The location consists of three acres of land with two buildings—a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet.  The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices.  The minimum lease payments required over the next 12 months is $84,000.
 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of rent expense was imputed for the six months ended February 28, 2015 and February 28, 2014, respectively.

NOTE 8 – SEGMENT REPORTING

Our operations during fiscal 2013 were managed through two operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of the operating segments was managed under a common structure chaired by our Chief Executive Officer and discrete financial information for both of the segments was available. Our Chief Executive Officer used the operating results of each of the two operating segments for performance evaluation and resource allocation and, as such, was the chief operating decision maker. The activities of each of our segments from which they earned revenues and incurred  expenses are described below: 

— The Trade Leasing segment is involved in the manufacture and repair of truck bodies.

— The Service Products segment specialized in electronics service, repair and sales.

16

Summarized financial information concerning reportable segments is shown in the following table for the six months ended: 

February 28, 2015:
	Trade Leasing			Service Products			Total
Revenues	$	1,166,021		$	-		$	1,166,021
Cost of Sales		(1,071,706	)		-			(1,071,706	)
Gross Margin		94,315			-			94,315
Operating Expense		(169,115	)		(499,045	)		(668,160	)
Operating Loss		(74,800	)		(499,045	)		(573,845	)
Other Expense		-			(4,158	)		(4,158	)
Net Loss	$	(74,800	)	$	(503,203	)	$	(578,003	)

February 28, 2014:
	Trade Leasing			Service Products			Total
Revenues	$	920,118		$	-		$	920,118
Cost of Sales		(650,183	)		(7,243	)		(657,426	)
Gross Margin		269,935			(7,243	)		262,692
Operating Expense		(289,792	)		(42,038	)		(331,830	)
Operating Loss		(19,857	)		(49,281	)		(69,138	)
Other Expense		-			(17,745	)		(17,745	)
Net Loss	$	(19,857	)	$	(67,026	)	$	(86,883	)

NOTE 9 – SUBSEQUENT EVENTS

There were no subsequent events through the date that the financial statements were issued. 

17

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

Overview of Our Company

Service Team Inc. (the “Company”) was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired 25,000 common shares of Trade Leasing, Inc., granting 100% ownership, for 4,000,000 shares of its common stock; in addition, both entities are under common control.   Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  Service Team Inc. and Trade Leasing Inc. have not been involved in a bankruptcy, receivership or any similar proceeding. The acquisition of Trade Leasing Inc. is a major change in the operations of the company. Trade Leasing is being operated as a separate division of Service Team Inc.

Trade Leasing Division.  This division is involved in the manufacture and repair of truck bodies.  The Company manufactures truck bodies that are attached to a truck chassis which consists of an engine, drive train, a frame with wheels, and in some cases, a cab.  The truck chassis is manufactured by third parties that are major automotive or truck companies.  These companies do not typically build specialized truck bodies.  The company is also involved in other products used by the trucking industry.  The company operates a complete manufacturing and repair facility in South Gate, California.  The facility manufactures both custom and standard production truck bodies in approximately 70 different models designed to fill the specialized demands of the user.   The vans are available for hauling dry freight or refrigerated freight.  The refrigerated vans are built with two to four inches of foam insulating that is sprayed in place for hauling refrigerated products such as meats, vegetables, flowers and similar products.  The Company installs different types of cooling systems in the trucks.  This varies from motor driven units installed outside the van body or refrigeration units driven off the engine of the truck.  Some refrigerated trucks use a system called “cold plate” where a large metal plate is cooled by power while the truck is parked.  The power is then unplugged and the truck will stay cool for many hours.  The Company’s customers are auto dealers and users of trucks; such as dairies, food distributors and local delivery. The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers. Trade Leasing purchases raw materials from approximately 25 suppliers.  There are several hundred similar suppliers of comparable materials in the local area. Trade Leasing Inc. purchases refrigeration units from Thermoking Corporation a division of United Technologies and Carrier Corporation, a division of Ingersol Rand Corporation. The two companies represent more than 80% of the refrigeration unit market. There are several other manufactures of refrigeration units that represent a small part of the market. Trade Leasing Inc. employs 23 factory workers and three management personnel.  The management personnel make all of the sales and manage the factory. The company has all of the government licenses necessary to conduct its business. These include 9 different city, county and state licenses covering vehicle transportation, air quality, hazard waste (Paint), land or building use, and sales tax.

Liquidity and Capital Resources

As of February 28, 2015, we had assets of $223,072 including current assets of $205,425.   We have accounts payable of $227,496, related party notes payable (Hallmark Venture Group) of $158, contingent liabilities of $54,100, accrued interest of $3,644, convertible notes payable of $30,025 and accrued expenses of $61,610. The Hallmark Venture Group, Inc. funds were advanced to pay our on-going expenses.   Hallmark Venture Group, Inc. is prepared to advance us additional funds as needed. There is no firm payback date. It is to be repaid when we have funds available. Accrued expenses are for work performed by employees during the organizational and operational stages of the Company. There is no firm date which these are to be paid. It is to be repaid when we have funds available.  Since inception we have also raised $354,382 from the sale of our common stock.  We believe our ability to achieve commercial success and continued growth will be dependent upon our continued access to capital either through additional sale of our equity or cash generated from operations. We will seek to obtain additional working capital through the sale of our securities. We will attempt to obtain additional capital through bank lines of credit; however, we have no agreements or understandings with third parties at this time.   Management believes that the acquisition of Trade Leasing, Inc. adds sales of more than one million dollars per year and a projected profit of more than one hundred thousand dollars.

18

Rescission Offer

The Company has a contingent liability associated with the rescission offer (as noted below) made to investors due to the sale of unregistered stock.  The liability is equal to the number of shares of common stock sold of 541,000 times the selling price of $0.10 per share which equals $54,100.  As of February 28, 2015, and August 31, 2014 the estimated dollar value of the contingent liability is $54,100 and $54,100, respectively.

During the period from November 29, 2011, until June 1, 2012, the Company sold 541,000 shares to various individuals for a total cash consideration of $54,100.  The funds were used for operating capital of the Company including rent and payroll. These sales of our shares sold after the filing date of our S-1 Registration (November 29, 2011) may not be covered by a valid private placement exemption from the registration requirements due to possible integration with the public offering.  To be certain of our position we have elected to offer rescission for all private sales made after November 29, 2011.  Our rescission offer covers twenty-five shareholders (25) for a total of 541,000 shares originally sold for $54,100. 

Results of Operations

Six Months Ended February 28, 2015 compared to the Six Months Ended February 28, 2014

Sales during the six month period ended February 28, 2015, were $1,166,021 compared to $920,118 for the six month period ending February 28, 2014.   Our cost of sales was $1,071,706. Our operating expenses were $668,160. We had losses from operations of $573,845.  Our interest expense was $4,158; leaving a net loss of $578,003.  

Three Months Ended February 28, 2015 compared to the Three Months Ended February 28, 2014

Sales during the three month period ended February 28, 2015, were $612,394 compared to $442,895 for the three month period ending February 28, 2014.   Our cost of sales was $558,323. Our operating expenses were $608,938. We had losses from operations of $554,867.  Our interest expense was $3,692; leaving a net loss of $558,559.  

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.

19

Inherent Limitations of Internal Controls

Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, other than those stated above, during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings.

On December 5, 2014, Service Team, Inc., our CEO Robert Cashman, Richard Bennett, a former agent of the Company and Hallmark Venture Group, Inc., an affiliated shareholder controlled by Mr. Cashman (the Named Parties) were served with a Desist and Refrain Order by the Commissioner of the State of California Department of Business oversight (the “Commissioner”).  The Commissioner found that in 2012, the Named Parties offered and sold Service Team common stock by means of written or oral communications which included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in violation of the California Securities law.  The named parties were ordered to desist and refrain from offering or selling or offering to buy any security in the State of California by means of written or oral communications which included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

The Named Parties elected not to file a request for a hearing on the order and the order became permanent on January 5, 2015.

Item 1A. Risk Factors.

Not applicable.

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

During the six month period ended February 28, 2015, the Company sold 40,000 shares of common stock to two investors for a consideration of $4,000.  The Company relied upon the exemption from registration under the Securities Act set forth in Section 4(2), a transaction by an issuer not involving a public offering.

Item 3. Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain officers; Compensatory Arrangements of Certain Officers.

On April 13, 2015, Carlos Arreola resigned as chief executive officer and as director.  Mr. Arreola’s resignation is not because of any disagreement with the registrant.  We have provided Mr. Arreola with a copy of this disclosure prior to the filing thereof and informed him that he had the opportunity to provide the registrant with correspondence stating whether he agrees or disagrees with the disclosure contained in this current report which the registrant would also file such correspondence as an exhibit to this current report or an amendment thereto.

Robert Cashman, remains as the sole director of the registrant and has assumed the role of chief executive officer in addition to that of chief financial officer.  There is no change to Mr. Cashman’s compensation.

Item 6. Exhibits.

(a)   The following exhibits are filed with this report.

17.1  Resignation of Carlos Arreola

31.1  Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.

31.2  Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.

32.l  Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2  Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101   Interactive Data Files

21

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.

	Service Team Inc.
Date  April 14, 2015	By:	/s/ Robert L. Cashman
		Robert L. Cashman
		Chief Executive Officer and President Principal Executive Officer
Date  April 14, 2015	By:	/s/ Robert L. Cashman
		Robert L. Cashman
		Chief Financial Officer Principal Financial and Accounting Officer

22

EX-17.1

Exhibit 17.1

 

Original message --------

From: Carlos Arreola <carlos.arreola@serviceteaminc.com>

Date:04/13/2015 1:55 PM (GMT-07:00)

To: cashmanrob@aol.com, Dbrovarone@aol.com, elviso82@hotmail.com

Cc:

Subject: Resignation

To Mr. Bob Cashman,

I, Carlos Arreola, resign from my position at Service Team, Inc. as President, C.E.O and from any other positions that may have been held in my name effective immediately.  Thank you.

Sincerely,

/s/ Carlos Arreola

Carlos Arreola

April 13, 2015

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,  Robert L. Cashman certify that:

1. I have reviewed this report on Form 10-Q of Service Team Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation: and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2015

/s/ Robert L. Cashman

By:  Robert L. Cashman

Chief Executive Officer and President

Principal Executive Officer

EX-31.2

Exhibit 31.2

I,  Robert L. Cashman certify that:

1. I have reviewed this report on Form 10-Q of Service Team Inc..;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation: and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2015

/s/ Robert L. Cashman

By: Robert L. Cashman, 

Chief Financial Officer

Principal Financial and Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Cashman, Chief Executive Officer, of Service Team Inc.,  a Nevada corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The report on Form 10-Q of Service Team Inc. (the "Registrant") for the fiscal quarter ended February 28, 2015 (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 14, 2015

/s/ Robert L. Cashman

Name: Robert L. Cashman

Title:   Chief Executive Officer and President

Principal Executive Officer

EX-32.2

        Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Cashman, Vice President, Secretary, Chief Financial Officer, of Service Team Inc.,  a Nevada corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The report on Form 10-Q of Service Team Inc. (the "Registrant") for the fiscal quarter ended February  28, 2015 (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 14, 2015

/s/ Robert L. Cashman

Name: Robert L. Cashman

Title:   Chief Financial Officer

Principal Financial and Accounting Officer

XML

COMPONENTS OF TAX EXPENSE (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
COMPONENTS OF TAX EXPENSE (DETAILS)
Net tax loss carry-forwards	$ 623,530	$ 548,338
Statutory rate	34.00%	34.00%
Expected tax recovery	212,000	186,435
Change in valuation allowance	(212,000)	(186,435)
Income tax provision	$ 0

XML

ASSETS THAT WERE MEASURED AND RECOGNISED AT FAIR VALUE (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Level 1
Convertible notes payable	$ 0	$ 0
Total Realized Loss	0
Level 2
Convertible notes payable	0
Total Realized Loss	0	0
Level 3
Convertible notes payable	0
Total Realized Loss	0	0
Total Realized Loss
Convertible notes payable	0
Total Realized Loss	$ 0	$ 0

XML

SUMMARIZED FINANCIAL INFORMATION CONCERNING REPORTABLE SEGMENTS FOR FEBRUARY 28 2015 (DETAILS) (USD $)	Trade Leasing	Service Products	Segment Total
Segment Revenues at Aug. 31, 2014	$ 1,166,021		$ 1,166,021
Segment Cost of Sales	(1,071,706)		(1,071,706)
Segment Gross Margin	94,315		94,315
Segment Operating Expense	(169,115)	(499,045)	(668,160)
SegmentOperating Loss	(74,800)	(499,045)	(573,845)
Segment Other Expense		(4,158)	(4,158)
Segment Net Loss at Feb. 28, 2015	$ (74,800)	$ (503,203)	$ (578,003)

XML

CAPITAL STOCK

6 Months Ended

Feb. 28, 2015

CAPITAL STOCK

CAPITAL STOCK

NOTE 3 – CAPITAL STOCK

The Company’s authorized capital is 74,000,000 common shares with a par value of $0.001 per share and 100,000 preferred shares with a par value of $0.001 per share.  

2015

During the six months ended February 28, 2015, the Company sold 40,000 shares for $4,000.

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Venture Group, Inc. (a related party) in exchange for services’. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.

As of February 28, 2015, and August 31, 2014 the Company has not granted any stock options.  

2014

During the six months ended February 28, 2014 the Company sold 63,333 shares for $25,000 of cash from an unrelated investor.

During the three months ended May 31, 2014 the Company sold 55,000 shares for $9,750 of cash from three unrelated investors.

During the twelve months ended August 31, 2014, $10,716 of interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc. based upon the average balance during the period at an interest rate of 10 percent.

Stock Based Compensation

We have accounted for stock based compensation under the provisions of FASB Accounting Standards codification (ASC) 718-10-55.  (Prior authoritative literature:  FASB Statement 123 (R), Share-based payment.)  This statement requires us to record any expense associated with the fair value of stock based compensation.  Determining fair value requires input of highly subjective assumptions, including the expected price volatility.  Changes in these assumptions can materially affect the fair value estimate.

XML

DEBT PROMISSORY NOTE RELATED PARTY (DETAILS) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
DEBT PROMISSORY NOTE RELATED PARTY (DETAILS)
Repaid funds during the period	$ 27,000	$ 33,720
Interest imputed at a rate of 10%	$ 683	$ 9,532

XML

CONVERTIBLE NOTE PAYABLE (DETAILS) (USD $)	Feb. 28, 2015	Feb. 05, 2015	Aug. 31, 2014	Aug. 10, 2014
CONVERTIBLE NOTE PAYABLE (DETAILS)
Convertible promissory note sold to Tangiers, in the original principal amount		$ 50,000
Interest accrued rate		10.00%
Variable Conversion Price		55.00%
Discount rate		45.00%
Fixed Conversion Price		$ 0.001
Original issuance discount was recorded in accordance with the agreement		5,000
Hallmark Venture Group, Inc. acquired the Note, with principal amount				27,158
Accured Interest on Hallmark Venture Group Inc.				3,987
Hallmark Venture Group, Inc. acquired the Note, to Howard Nunn, Jr. for shares of Services Team Inc				80,000
Increase to additional paid in capital and a reduction of debt due to the discount.				23,003
Beneficial conversion feature discount resulting from the conversion price below the market price of 0.40 provided a value		22,000
Beneficial conversion feature discount resulting from the conversion price below the market price		$ 0.29		$ 0.75
Debt discount was amortized	2,025		0
Accrued interest related to the First Tangiers note	347		0
Accrued interest amount due on debt	$ 3,297		$ 3,297

XML

RELATED PARTY PROMISSORY NOTE (DETAILS) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
RELATED PARTY PROMISSORY NOTE (DETAILS)
Repaid funds during the period	$ 27,000	$ 33,720
Interest imputed at a rate of 10%	683	9,532
Related party contribution of office space imputed rent expense	$ 0	$ 3,000

XML

COMMON STOCK EXCHANGED FOR PREFERRED STOCK (DETAILS) (USD $)	Jan. 20, 2015
COMMON STOCK EXCHANGED FOR PREFERRED STOCK (DETAILS)
Company authorized and issued shares of Series A Preferred Stock	100,000
Shares grant the holder to right to vote on shareholder equal to 500 votes per share	100,000
Value of Series A Preferred Stock shares	$ 499,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Feb. 28, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders’ Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The condensed consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. 

Use of Estimates

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

Going Concern

The Company's consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.  However, we have incurred continued losses, have a net working capital deficiency of $171,608, and have an accumulated deficit of $1,687,780 as of February 28, 2015.  There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its operations by issuing common shares and debt. As of February 28, 2015, the Company had sold 6,000,000 shares to Hallmark Venture Group, Inc. at $0.001 per share for net funds to the Company of $6,000 and received capital contributions of $23,027. The Company has also sold 1,969,014 shares to various individuals and received net funds of $340,383.  Hallmark Venture Group, Inc. has also loaned the Company $166,279.  The major shareholder, Hallmark Venture Group, Inc., has committed to advancing additional funds as may be required for the operation of the Company. We cannot be certain that capital will be provided when it is required.

Cash and Equivalents

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at February 28, 2015, or August 31, 2014.

Concentration of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.

Accounts Receivable

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of February 28, 2015, and August 31, 2014 was $12,323 and $2,802, respectively.

Accounts Receivable and Revenue Concentrations

The Company’s wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of February 28, 2015.  One customer represented about 20% of total receivables as of August 31, 2014.  

During the six months period ended February 28, 2015, the Company had one customer that represented 19% of total sales.  During the three months ended August 31, 2014, the Company had one customer that represented about 22% of total sales. 

Inventory

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at February 28, 2015 or August 31, 2014.

Property and Equipment

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $994 of depreciation expense during the six months ended February 28, 2015.  There was no depreciation expense recorded during the six month period ended February 28, 2014.

Net property and equipment were as follows at February 28, 2015 and August 31, 2014: 

	2/28/15			8/31/14
Equipment	$	243,444		$	243,444
Vehicles		15,000			15,000
Furniture		1,500			1,500
Subtotal		259,944			259,944
Less: accumulated depreciation		(251,297	)		(250,303	)
Total	$	8,647		$	9,641

Lease Commitments

Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month.  The location consists of three acres of land with two buildings a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet.  The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of imputed rent expense was recorded for the six months ended February 28, 2015 and 2014, respectively.

Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

Fair Value of Financial Instruments

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has various financial instruments that must be measured under the new fair value standardincluding: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:  

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1. 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.

The following table presents assets and liabilities that were measured and recognized at fair value as of February 28, 2015 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2014 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

Income Taxes

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at February 28, 2015 and August 31, 2014 where it cannot conclude that it is more likely than not that those assets will be realized.

Revenue Recognition

Trade Leasing Division

The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. 

Service Products Division

The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.

As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy).

Share Based Expenses

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Stock Based Compensation

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.

Net Loss Per Share

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. As of February 28, 2015 and 2014, because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

XML

INCOME TAXES (DETAILS) (USD $)	Feb. 28, 2015
INCOME TAXES (DETAILS)
Net operating loss carry forwards totaling	$ 623,530
The available net operating loss carry forwards of approximately	$ 623,530

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)	Feb. 28, 2015	Aug. 31, 2014
ASSETS
Cash	$ 34,456	$ 7,457
Accounts receivable, net of allowances of $12,323 and $2,802, respectively	154,572	186,026
Deferred financing costs	16,397
Total current assets	205,425	193,483
Property and equipment, net	8,647	9,641
Prepaid expenses	9,000	9,000
TOTAL ASSETS	223,072	212,124
LIABILITIES & SHAREHOLDERS' (DEFICIT)
Accounts payable	227,496	172,117
Promissory note - related party	158	27,158
Convertible note, net of discounts of $24,975 and $0, respectively	30,025
Contingent Liability	54,100	54,100
Accrued expense	61,610	56,403
Accrued interest	3,644	3,987
TOTAL LIABILITIES	377,033	313,765
Common stock, $0.001 par value, 74,000,000 authorized, 12,525,647 and 12,485,647 issued and outstanding as of February 28, 2015 and August 31, 2014, respectively.	12,526	12,486
Preferred stock - Series A, $0.001 par value, 100,000 authorized, 100,000 and 0 issued and outstanding as of February 28, 2015 and August 31, 2014, respectively.	100
Additional paid in capital	1,521,193	955,650
Accumulated deficit	(1,687,780)	(1,109,777)
TOTAL SHAREHOLDERS' (DEFICIT)	(153,961)	(101,641)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)	$ 223,072	$ 212,124

XML

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (578,003)	$ (86,883)
Adjustments to reconcile net loss with cash provided by (used in) operations:
Imputed rent expense		3,000
Debt discount amortization	2,025	6,833
Stock based compensation	499,000
Deferred financing cost amortization	1,103
Depreciation	994
Imputed interest	683	9,532
CHANGE IN OPERATING ASSETS AND LIABILITIES
Accounts Receivable	31,454	6,660
Accrued Expenses	4,864	292
Accounts Payable	55,379	(14,819)
Net Cash Provided by (Used in) Operating Activities	17,499	(75,385)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchase of fixed assets	0
Net Cash Used in Investing Activities		0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock	4,000	15,000
Proceeds from loans with Hallmark Venture Group, Inc. *		5,280
Payments on loans with Hallmark Venture Group, Inc. *	(27,000)	(39,000)
Deferred financing costs	(17,500)
Proceeds from convertible notes payable	50,000
Payments on convertible notes payable		(5,000)
Net Cash Provided by (Used in) Financing Activities	9,500	(23,720)
Net Increase (Decrease) In Cash and Cash Equivalents	26,999	(99,105)
Cash at Beginning of Period	7,457	100,895
Cash at End of Period	34,456	1,790
Supplemental Disclosures
Interest Paid	0
Taxes Paid		0
Non-cash transactions:
Beneficial conversion feature	22,000
Shares issued for subscriptions receivable		10,000
Related Party	$ 0

XML

OPERATING LEASES (DETAILS) (USD $)	Feb. 28, 2015
OPERATING LEASES (DETAILS)
Minimum lease payment required over the period of next 12 months	$ 84,000
Lease amount per month for office space	$ 7,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Accounts Receivable.
The allowance for doubtful accounts .	$ 12,323	$ 2,802
Going Concern
Working capital deficiency	171,608
Accumulated deficit	1,687,780
Company had sold shares to Hallmark Venture Group, Inc	6,000,000
Per share value of shares sold	$ 0.001
Net funds to the company	6,000
Capital contributions received	23,027
Company had sold shares to individuals	1,969,014
Received funds	340,383
Hallmark Venture Group, Inc loaned the company	166,279
Cash and Equivalents
Company maintains cash balances up to	$ 250,000

XML

RENT EXPENSES (DETAILS) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
RENT EXPENSES (DETAILS)
Office Space imputed rent expenses	$ 0	$ 3,000

XML

NET PROPERTY AND EQUIPMENT (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
NET PROPERTY AND EQUIPMENT (DETAILS)
Equipment	$ 243,444	$ 243,444
Vehicles	15,000	15,000
Furniture	1,500	1,500
Total fixed assets, gross	259,944	259,944
Less: accumulated depreciation	(251,297)	(250,303)
Total fixed assets, net	$ 8,647	$ 9,641

XML

ORGANIZATION

6 Months Ended

Feb. 28, 2015

ORGANIZATION

ORGANIZATION

NOTE 1 - ORGANIZATION

Organization

Service Team Inc. (the “Company”) was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  

The Company has established a fiscal year end of August 31.

XML

CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)	Feb. 28, 2015	Aug. 31, 2014
PARENTHETICALS
Accounts receivable, net of allowances	$ 12,323	$ 2,802
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	74,000,000	74,000,000
Common Stock, Shares Issued	12,525,647	12,485,647
Common Stock, Shares Outstanding	12,525,647	12,485,647
Preferred stock, Par Value	$ 0.001	$ 0.001
Preferred stock, Shares Authorized	100,000	100,000
Preferred stock, Shares Issued	100,000	0
Preferred stock, Shares Outstanding	100,000	0
Convertible note, net of discount	$ 24,975	$ 0

XML

SCHEDULE OF PROPERTY AND EQUIPMENT (TABLES)

6 Months Ended

Feb. 28, 2015

SCHEDULE OF PROPERTY AND EQUIPMENT (TABLES)

SCHEDULE OF PROPERTY AND EQUIPMENT (TABLES)

Net property and equipment were as follows at February 28, 2015 and August 31, 2014: 

	2/28/15			8/31/14
Equipment	$	243,444		$	243,444
Vehicles		15,000			15,000
Furniture		1,500			1,500
Subtotal		259,944			259,944
Less: accumulated depreciation		(251,297	)		(250,303	)
Total	$	8,647		$	9,641

XML

Document and Entity Information	6 Months Ended
	Feb. 28, 2015	Apr. 10, 2015
Document and Entity Information
Entity Registrant Name	Service Team Inc.
Entity Trading Symbol	SVTM
Document Type	10-Q
Document Period End Date	Feb. 28, 2015
Amendment Flag	false
Entity Central Index Key	0001535635
Current Fiscal Year End Date	--08-31
Entity Common Stock, Shares Outstanding		12,525,647
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

FAIR VALUE MEASUREMENTS (TABLES)

6 Months Ended

Feb. 28, 2015

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The following table presents assets and liabilities that were measured and recognized at fair value as of February 28, 2015 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2014 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)	3 Months Ended		6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014
REVENUES
Sales	$ 612,394	$ 442,895	$ 1,166,021	$ 920,118
COST OF SALES
Cost of sales	558,323	345,920	1,071,706	657,426
Gross Margin	54,071	96,975	94,315	262,692
OPERATING EXPENSES
General & administrative expenses	608,938	174,599	668,160	331,830
Total Operating Expenses	608,938	174,599	668,160	331,830
INCOME (LOSS) FROM OPERATIONS	(554,867)	(77,624)	(573,845)	(69,138)
OTHER INCOME (EXPENSE)
Interest expense	(3,692)	(5,522)	(4,158)	(17,745)
Total Other Income (Expense)	(3,692)	(5,522)	(4,158)	(17,745)
NET INCOME (LOSS)	$ (558,559)	$ (83,146)	$ (578,003)	$ (86,883)
Weighted average number of common shares outstanding - basic and fully diluted	12,525,647	12,414,277	12,518,796	12,392,434
Net income (loss) per share - basic and fully diluted	$ (0.04)	$ (0.01)	$ (0.05)	$ (0.01)

XML

INCOME TAXES

6 Months Ended

Feb. 28, 2015

INCOME TAXES

INCOME TAXES

NOTE 6 – INCOME TAXES

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $623,530 as of February 28, 2015, that will be offset against future taxable income.  The available net operating loss carry forwards of approximately $623,530 will expire in various years through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company’s loss before income taxes.  The components of these differences are as follows at February 28, 2015 and August 31, 2014:

	2/28/15			8/31/14
Net tax loss carry-forwards	$	623,530		$	548,338
Statutory rate		34	%		34	%
Expected tax recovery		212,000			186,435
Change in valuation allowance		(212,000	)		(186,435	)
Income tax provision	$	-		$	-
Components of deferred tax asset:
Non capital tax loss carry forwards	$	212,000		$	186,435
Less: valuation allowance		(212,000	)		(186,435	)
Net deferred tax asset	$	-		$	-

XML

RELATED PARTY TRANSACTIONS

6 Months Ended

Feb. 28, 2015

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 5 - RELATED PARTY TRANSACTIONS

Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the six months ended February 28, 2015, and February 28, 2014, the Company repaid net funds of $27,000 and $33,720, respectively.  During the six months ended February 28, 2015, and February 28, 2014, the Company has imputed interest at a reasonable rate of 10 percent totaling $683 and $9,532, respectively.

Common Stock exchanged for Preferred Stock

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Venture Group, Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

Lease Commitments

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of rent expense was imputed for the six months ended February 28, 2015 and February 28, 2014, respectively.

XML

ACCOUNTS RECEIVABLE AND REVENUE CONCENTRATIONS (DETAILS) (USD $)	3 Months Ended	6 Months Ended
	Aug. 31, 2014	Feb. 28, 2015	Feb. 28, 2014
Accounts Receivable and Revenue Concentrations {1}
Three customers	11.00%	23.00%
One customer total receivables .	20.00%	10.00%
Total sales	22.00%	19.00%
Property and Equipment.
Depreciation expense of Property and Equipment.		$ 994	$ 0
Lease Commitments
Imputed rent expense was recorded of lease commitments.		0	3,000
Company leases manufacturing facility California 90280	$ 0	$ 7,000

XML

COMPONENTS OF INCOMETAX EXPENSE (TABLES)

6 Months Ended

Feb. 28, 2015

COMPONENTS OF INCOMETAX EXPENSE

COMPONENTS OF INCOME TAX EXPENSE

The components of these differences are as follows at February 28, 2015 and August 31, 2014:

	2/28/15			8/31/14
Net tax loss carry-forwards	$	623,530		$	548,338
Statutory rate		34	%		34	%
Expected tax recovery		212,000			186,435
Change in valuation allowance		(212,000	)		(186,435	)
Income tax provision	$	-		$	-
Components of deferred tax asset:
Non capital tax loss carry forwards	$	212,000		$	186,435
Less: valuation allowance		(212,000	)		(186,435	)
Net deferred tax asset	$	-		$	-

XML

SUBSEQUENT EVENTS

6 Months Ended

Feb. 28, 2015

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 9 – SUBSEQUENT EVENTS

There were no subsequent events through the date that the financial statements were issued. 

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Feb. 28, 2015

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Litigation

None.

Operating Leases

Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month.  The location consists of three acres of land with two buildings—a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet.  The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices.  The minimum lease payments required over the next 12 months is $84,000.

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of rent expense was imputed for the six months ended February 28, 2015 and February 28, 2014, respectively.

XML

SEGMENT REPORTING

6 Months Ended

Feb. 28, 2015

SEGMENT REPORTING

Segment Reporting Disclosure

NOTE 8 – SEGMENT REPORTING

Our operations during fiscal 2013 were managed through two operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of the operating segments was managed under a common structure chaired by our Chief Executive Officer and discrete financial information for both of the segments was available. Our Chief Executive Officer used the operating results of each of the two operating segments for performance evaluation and resource allocation and, as such, was the chief operating decision maker. The activities of each of our segments from which they earned revenues and incurred  expenses are described below: 

? The Trade Leasing segment is involved in the manufacture and repair of truck bodies.

? The Service Products segment specialized in electronics service, repair and sales.

Summarized financial information concerning reportable segments is shown in the following table for the six months ended: 

February 28, 2015:
	Trade Leasing			Service Products			Total
Revenues	$	1,166,021		$	-		$	1,166,021
Cost of Sales		(1,071,706	)		-			(1,071,706	)
Gross Margin		94,315			-			94,315
Operating Expense		(169,115	)		(499,045	)		(668,160	)
Operating Loss		(74,800	)		(499,045	)		(573,845	)
Other Expense		-			(4,158	)		(4,158	)
Net Loss	$	(74,800	)	$	(503,203	)	$	(578,003	)

February 28, 2014:
	Trade Leasing			Service Products			Total
Revenues	$	920,118		$	-		$	920,118
Cost of Sales		(650,183	)		(7,243	)		(657,426	)
Gross Margin		269,935			(7,243	)		262,692
Operating Expense		(289,792	)		(42,038	)		(331,830	)
Operating Loss		(19,857	)		(49,281	)		(69,138	)
Other Expense		-			(17,745	)		(17,745	)
Net Loss	$	(19,857	)	$	(67,026	)	$	(86,883	)

XML

ACCOUNTING POLICIES (POLICIES)

6 Months Ended

Feb. 28, 2015

ACCOUNTING POLICIES (POLICIES)

Basis of Presentation

Basis of Presentation

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders’ Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  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.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The condensed consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. 

Use of Estimates

Use of Estimates

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

Going Concern

Going Concern

The Company's consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.  However, we have incurred continued losses, have a net working capital deficiency of $171,608, and have an accumulated deficit of $1,687,780 as of February 28, 2015.  There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its operations by issuing common shares and debt. As of February 28, 2015, the Company had sold 6,000,000 shares to Hallmark Venture Group, Inc. at $0.001 per share for net funds to the Company of $6,000 and received capital contributions of $23,027. The Company has also sold 1,969,014 shares to various individuals and received net funds of $340,383.  Hallmark Venture Group, Inc. has also loaned the Company $166,279.  The major shareholder, Hallmark Venture Group, Inc., has committed to advancing additional funds as may be required for the operation of the Company. We cannot be certain that capital will be provided when it is required.

Cash and Equivalents

Cash and Equivalents

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at February 28, 2015, or August 31, 2014.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.

Accounts Receivable

Accounts Receivable

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of February 28, 2015, and August 31, 2014 was $12,323 and $2,802, respectively

Accounts Receivable and Revenue Concentrations

Accounts Receivable and Revenue Concentrations

The Company’s wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of February 28, 2015.  One customer represented about 20% of total receivables as of August 31, 2014.  

During the six months period ended February 28, 2015, the Company had one customer that represented 19% of total sales.  During the three months ended August 31, 2014, the Company had one customer that represented about 22% of total sales. 

Inventory

Inventory

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at February 28, 2015 or August 31, 2014.

Property and Equipment

Property and Equipment

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $994 of depreciation expense during the six months ended February 28, 2015.  There was no depreciation expense recorded during the six month period ended February 28, 2014.

Net property and equipment were as follows at February 28, 2015 and August 31, 2014: 

	2/28/15			8/31/14
Equipment	$	243,444		$	243,444
Vehicles		15,000			15,000
Furniture		1,500			1,500
Subtotal		259,944			259,944
Less: accumulated depreciation		(251,297	)		(250,303	)
Total	$	8,647		$	9,641

Lease Commitments

Lease Commitments

Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month.  The location consists of three acres of land with two buildings a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet.  The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $3,000 of imputed rent expense was recorded for the six months ended February 28, 2015 and 2014, respectively.

Beneficial Conversion Features

Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has various financial instruments that must be measured under the new fair value standardincluding: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:  

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1. 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.

The following table presents assets and liabilities that were measured and recognized at fair value as of February 28, 2015 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2014 on a recurring basis:

Total

Realized

Description

Level 1

Level 2

Level 3

Loss

$

-

$

-

$

-

$

-

Total

$

-

$

-

$

-

$

-

Income Taxes

Income Taxes

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at February 28, 2015 and August 31, 2014 where it cannot conclude that it is more likely than not that those assets will be realized.

Revenue Recognition

Revenue Recognition

Trade Leasing Division

The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. 

Service Products Division

The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.

As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy).

Share Based Expenses

Share Based Expenses

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Stock Based Compensation

Stock Based Compensation

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.

Net Loss Per Share

Net Loss Per Share

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. As of February 28, 2015 and 2014, because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

XML

NET DEFERRED TAX ASSETS (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Components of deferred tax asset:
Non capital tax loss carry forwards	$ 212,000	$ 186,435
Less: valuation allowance	(212,000)	(186,435)
Net deferred tax asset	$ 0

XML

ORGANIZATION NARRATIVE (DETAILS)	Jun. 05, 2013
ORGANIZATION NARRATIVE (DETAILS)
Number of shares of common stock acquired in Trade Leasing Inc. A commonly held company	4,000,000

XML

STOCK ISSUES (DETAILS) (USD $)	3 Months Ended	6 Months Ended		12 Months Ended
	May 31, 2014	Feb. 28, 2015	Feb. 28, 2014	Aug. 31, 2014
STOCK ISSUES
No of shares of common stock sold to a Unrelated investor	55,000	40,000	63,333
Value of shares of common stock sold to a Unrelated investor	9,750	4,000	25,000
Interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc.				$ 10,716
Interest Rate for Hallmark Venture Group, Inc.				10.00%

XML

CONSOLIDATED STATEMENT OF SHAREHOLDERS DEFICIT (UNAUDITED) (USD $)	Common Stock Shares USD ($)	Common Stock Amount USD ($)	Preferred Stock Shares	Preferred Stock Amount	Additional Paid In Capital USD ($)	Accumulated Deficit USD ($)	Total USD ($)
Balance at Aug. 31, 2013	12,367,314	12,368			950,302	(1,184,133)	(221,464)
Imputed Interest on Related Party Debt					$ 10,716		$ 10,716
Shares Issued for Cash	118,333	118			34,632		34,750
Net Income						74,356	74,356
Balance at Aug. 31, 2014	12,485,647	12,486			995,650	(1,109,777)	(101,641)
Imputed Interest on Related Party Debt					683		683
Beneficial Conversion Feature					22,000		22,000
Preferred shares issued for Services			100,000	100	498,900		499,000
Shares Issued for Cash	40,000	40			3,960		4,000
Net Loss						$ (578,003)	$ (578,003)
Balance at Feb. 28, 2015	12,525,647	12,526	100,000	100	1,521,193	(1,687,780)	(153,961)

XML

DEBT TRANSACTIONS

6 Months Ended

Feb. 28, 2015

DEBT TRANSACTIONS

DEBT TRANSACTIONS

NOTE 4 – DEBT TRANSACTIONS

Convertible Note Payable – Third Party

On February 5, 2015, the Company entered into a Convertible Note Agreement with Tangiers Investment Group, LLC (“Tangiers”), pursuant to which the Company sold to Tangiers a 10% Convertible Promissory Note in the original principal amount of $50,000 (the “First Tangiers Note”). The First Tangiers Note has a maturity date of February 5, 2016, and is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The “Variable Conversion Price” shall mean 55% multiplied by the Market Price (representing a discount rate of 45%). “Market Price” means the lowest trading price for the Common Stock during the twnty trading day period ending on the latest complete trading day prior to the conversion date. “Fixed Conversion Price” shall mean $0.001. The shares of common stock issuable upon conversion of the First Tangiers Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933.

The Company evaluated the First Tangiers Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability. The beneficial conversion feature discount resulting from the conversion price of $0.29 below the market price on February 5, 2015 of $0.40 provided a value of $22,000. In addition, an original issuance discount was recorded in accordance with the agreement in the amount of $5,000. During the periods ended February 28, 2015 and August 31, 2014, $2,025 and $0, respectively, of the debt discount was amortized.   Accrued interest related to the First Tangiers Note as of February 28, 2015 and August 31, 2014 was $347 and $0, respectively.

Convertible Note Payable – Related Party

On August 10, 2014, Hallmark Venture Group, Inc. acquired the Note, with principal of $27,158 and accrued interest of $3,987, to Howard Nunn, Jr. for 80,000 shares of Service Team Inc. Common Stock owned by Hallmark Venture Group, Inc.  The Note was then canceled and the amounts due on the Note were added to the amounts due Hallmark Venture Group, Inc.  The option to convert to shares was voided.

The Company evaluated the Nunn Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.75 below the market price on June 21, 2013 of $1.25 provided a value of $23,003; which was recorded as an increase to additional paid in capital and a reduction of debt due to the discount. The discount was amortized completely during the year ended August 31, 2014. Accrued interest was $3,297 and $3,297 as of February 28, 2015, and August 31, 2014, respectively.

Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the six months ended February 28, 2015, and February 28, 2014, the Company repaid net funds of $27,000 and $33,720, respectively.  During the six months ended February 28, 2015, and February 28, 2014, the Company has imputed interest at a reasonable rate of 10 percent totaling $683 and $9,532, respectively.

XML

CAPTIAL STOCK TRANSACTIONS (DETAILS) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Capital stock transactions details
Authorized common shares	74,000,000
Common shares par value	$ 0.001
Preferred shares with a par value of $0.001 per share	$ 100,000
Preferred shares par value	$ 0.001
Company authorized and issued shares of Series A Preferred Stock		100,000
Shares grant the holder to right to vote on shareholder equal to 500 votes per share		$ 100,000
Value of Series A Preferred Stock shares		$ 499,000

XML

SUMMARIZED FINANCIAL INFORMATION CONCERNING REPORTABLE SEGMENTS FOR FEBRUARY 28 2014 (DETAILS) (USD $)	Trade Leasing	Service Products	Segment Total
Segment Revenues at Aug. 31, 2013	$ 920,118		$ 920,118
Segment Cost of Sales	(650,183)	(7,243)	(657,426)
Segment Gross Margin	269,935	(7,243)	262,692
Segment Operating Expense	(289,792)	(42,038)	(331,830)
Segment Operating Loss	(19,857)	(49,281)	(69,138)
Segment Other Expense		(17,745)	(17,745)
Segment Net Loss at Feb. 28, 2014	$ (19,857)	$ (67,026)	$ (86,883)

XML

SEGMENT REPORTING (TABLES)

6 Months Ended

Feb. 28, 2015

SCHEDULE OF SEGMENT REPORTING

Schedule of Summarized financial information concerning reportable segments

Summarized financial information concerning reportable segments is shown in the following table for the six months ended: 

February 28, 2015:
	Trade Leasing			Service Products			Total
Revenues	$	1,166,021		$	-		$	1,166,021
Cost of Sales		(1,071,706	)		-			(1,071,706	)
Gross Margin		94,315			-			94,315
Operating Expense		(169,115	)		(499,045	)		(668,160	)
Operating Loss		(74,800	)		(499,045	)		(573,845	)
Other Expense		-			(4,158	)		(4,158	)
Net Loss	$	(74,800	)	$	(503,203	)	$	(578,003	)

February 28, 2014:
	Trade Leasing			Service Products			Total
Revenues	$	920,118		$	-		$	920,118
Cost of Sales		(650,183	)		(7,243	)		(657,426	)
Gross Margin		269,935			(7,243	)		262,692
Operating Expense		(289,792	)		(42,038	)		(331,830	)
Operating Loss		(19,857	)		(49,281	)		(69,138	)
Other Expense		-			(17,745	)		(17,745	)
Net Loss	$	(19,857	)	$	(67,026	)	$	(86,883	)