SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file no. 0-15303
ABSS, CORP.
(Name of Small Business Issuer in its Charter)
Delaware 73-1215433
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation) Identification No.)
315 Greenwich Avenue, Greenwich, CT 06830
(Address of Principal Executive Offices) (Zip Code)
(203) 422-0448
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practical date: As of June 30, the Issuer had 5,122,043 shares of common stock outstanding, $0.01 par value.
ABSS, CORP.
Form 10-QSB
Quarterly Report
For The Period Ended June 30, 2002
INDEX
Page
Part I - FINANCIAL INFORMATION 3
Item 1. Financial Statements F-1 - F-7
Unaudited Interim Consolidated Condensed Balance Sheet
as of June 30, 2002 of ABSS, Corp. and Subsidiaries F-1
Unaudited Interim Consolidated Condensed Statement of Operations
for the Three Months Ended June 30, 2002 and June 30, 2001
for ABSS, Corp. and Subsidiaries F-2
Unaudited Interim Consolidated Condensed Statements of Operations for the
Six Months Ended June 30, 2002 and June 30, 2001 for ABSS, Corp. and Subsidiaries F-3
Unaudited Interim Consolidated Condensed Statements of Cash Flows for the
Six Months Ended June 30, 2002 and June 30, 2001 for ABSS, Corp. and Subsidiaries F-4
Notes to Unaudited Consolidated Interim Condensed Financial Statements F-5
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations 4
Part II - OTHER INFORMATION 4-5
Item 2. Changes in Securities 5
Item 3. Exhibits 5
Signatures 5
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
As used herein, the term "Company" refers to ABSS, Corp., f.k.a Unico, Inc., a Delaware corporation, and its subsidiaries and predecessors unless otherwise indicated. Unaudited, consolidated condensed interim financial statements including a balance sheet for the Company as of the period ended June 30, 2002 and statements of operations, and statements of cash flows for the interim period up to the date of such balance sheet and the comparable period of the preceding year are attached hereto as Pages F-1 through F-7 and are incorporated herein by this reference.
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying unaudited interim consolidated condensed balance sheet of ABSS, Corp. and its subsidiaries as of June 30, 2002 and the related unaudited interim consolidated condensed statements of operations and cash flows for the three and six month periods then ended. These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles.
/s/ Sellers & Associates, P.C.
SELLERS & ASSOCIATES, P.C.
August 15, 2002
Ogden, Utah
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ABSS, CORP. AND SUBSIDIARIES f.k.a UNICO, INC.
UNAUDITED INTERIM CONSOLIDATED CONDENSED
BALANCE SHEET
AS OF JUNE 30, 2002
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $ | 62 |
| Total current assets | 62 | |
| PROPERTY AND EQUIPMENT, AT COST | ||
| Net property and equipment | 15,414 | |
| Net Property and equipment | 15,414 | |
| OTHER ASSETS | ||
| Clothing brand name license | 37,914 | |
| Total Other Assets | 37,914 | |
| TOTAL ASSETS | $ | 53,390 |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
| CURRENT LIABILITIES | ||
| Accounts payable & other current liabilities | $ | 489,102 |
| Total current liabilities | 489,102 | |
| LONG-TERM LIABILITIES | ||
| Due to shareholder | 221,106 | |
| Accrual for litigation and judgments | 1,200,000 | |
| Total long-term liabilities | 1,421,106 | |
| Total liabilities | 1,910,208 | |
| COMMITMENTS AND CONTINGENCIES | - | |
| STOCKHOLDERS' EQUITY (DEFICIT) | ||
| Preferred stock, Series A, C & Redeemable | ||
| All recalled and retired | - | |
| Common stock | ||
| $.01 par value, 20,000,000 shares authorized, 5,122,043 shares | ||
| issued and outstanding as of June 30, 2002 | 51,220 | |
| Additional paid-in capital | 8,120,837 | |
| Retained earnings (deficit) | (10,028,875) | |
| Total stockholders' equity (Deficit) | (1,856,818) | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 53,390 |
ABSS, CORP. AND SUBSIDIARIES f.k.a UNICO, INC.
UNAUDITED INTERIM CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
| 2002 | 2001 | |||
| REVENUE | $ | - | $ | - |
| EXPENSES | ||||
| Selling, general and administrative expenses | 118,685 | - | ||
| Clothing design and samples | 15,863 | - | ||
| Depreciation and amortization | 1,713 | 14,532 | ||
| Total expenses from operations | 136,261 | 14,532 | ||
| INCOME (LOSS) FROM OPERATIONS | (136,261) | (14,532) | ||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS | - | (169,847) | ||
| NET INCOME (LOSS) BEFORE INCOME TAXES | (136,261) | (184,379) | ||
| PROVISION FOR INCOME TAXES | - | - | ||
| NET INCOME (LOSS) | $ | (136,261) | $ | (184,379) |
| BASIC AND DILUTIVE EARNINGS (LOSS) PER SHARE | ||||
| (Loss) from operations | (0.06) | (0.27) | ||
| (Loss) from discontinued operations | - | (3.18) | ||
| NET EARNINGS (LOSS) PER SHARE | $ | (0.06) | $ | (3.45) |
| Weighted Average Common Shares | ||||
| Basic and dilutive common shares | 2,136,642 | 53,352 |
ABSS, CORP. AND SUBSIDIARIES f.k.a UNICO, INC.
UNAUDITED INTERIM CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30,
| 2002 | 2001 | |||
| REVENUE | $ | - | $ | - |
| EXPENSES | ||||
| Selling, general and administrative expenses | 136,418 | - | ||
| Clothing design and samples | 15,863 | - | ||
| Depreciation and amortization | 1,713 | 29,064 | ||
| Total expenses from operations | 153,994 | 29,064 | ||
| INCOME (LOSS) FROM OPERATIONS | (153,994) | (29,064) | ||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS | - | (229,829) | ||
| NET INCOME (LOSS) BEFORE INCOME TAXES | (153,994) | (258,893) | ||
| PROVISION FOR INCOME TAXES | - | |||
| NET INCOME (LOSS) | $ | (153,994) | $ | (258,893) |
| BASIC AND DILUTIVE EARNINGS (LOSS) PER SHARE | ||||
| (Loss) from operations | (0.13) | (0.61) | ||
| (Loss) from discontinued operations | - | (4.84) | ||
| NET EARNINGS (LOSS) PER SHARE | $ | (0.13) | $ | (5.45) |
| Weighted Average Common Shares | ||||
| Basic and dilutive common shares | 1,153,195 | 47,518 |
ABSS, CORP. AND SUBSIDIARIES f.k.a UNICO, INC.
UNAUDITED INTERIM CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
| 2002 | 2001 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net income (loss) | $ | (153,994) | $ | (258,893) |
| Adjustments to reconcile net income (loss) to net cash | ||||
| provided (used) by operating activities: | ||||
| Depreciation and amortization | 1,713 | 64,032 | ||
| Stock for services | 12,031 | 70,000 | ||
| Changes in assets and liabilities: | ||||
| (Increase) decrease in accounts receivable - trade, net | - | 99,723 | ||
| Increase (decrease) in accounts & other payables | 33,000 | 21,630 | ||
| Net cash provided (used) by operating activities | (107,250) | (3,508) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Purchase of equipment | - | (1,152) | ||
| (Increase) in other assets | - | (12,231) | ||
| Net cash provided (used) by investing activities | - | (13,383) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Increase (decrease) in bank overdraft | - | 16,763 | ||
| Increase (decrease) in amounts due to (from) stockholder | 83,238 |
- | ||
|
Net cash provided (used) by financing activities |
83,238 | 16,763 | ||
| (DECREASE) IN CASH AND CASH EQUIVALENTS | (24,012) | (128) | ||
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 24,074 | 128 | ||
| CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 62 | $ | 0 |
| SUPPLEMENTAL CASH FLOWS DISCLOSURE: | ||||
| Cash paid for interest | $ | - | $ | - |
| NON CASH ITEMS: | ||||
| Stock for services | $ | 12,031 | $ | 70,000 |
| Stock for clothing brand name license | $ | 37,914 | $ | - |
ABSS, CORP. AND SUBSIDIARIES f.k.a. UNICO, INC.
NOTES TO UNAUDITED CONSOLIDATED INTERIM
CONDENSED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 30, 2002
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements at June 30, 2002 and for the three and six month periods ended June 30, 2002 and 2001 are unaudited, but include all adjustments which the Company considers necessary for a fair presentation.
The accompanying unaudited financial statements are for the interim periods and do not include all disclosures normally provided in annual financial statements, and should be read in conjunction with the Company's Form 10-KSB/A for the year ended December 31, 2001. The accompanying unaudited interim financial statements for the three and six month periods ended June 30, 2002 and 2001, are not necessarily indicative of the results which can be expected for the entire year.
The preparation of financial statements in conformity with generally accepted accounting principles in the USA requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & DISCONTINUED OPERATIONS
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Name Change and Reverse Stock Split
On April 25, 2002 the Company name changed to ABSS, Corp. as has been recognized in these unaudited financial statements. Also on April 25, 2002, the Company effected a 1 for 30 reverse stock split, which is reflected in these unaudited financial statements. The number of shares resulting, inclusive of rounding adjustments, was 127,509.
Common Stock Issued
Pursuant to the provisions of that certain License Agreement dated December 17, 2001 and filed with the Securities and Exchange Commission as an Exhibit to the Company's Form 10KSB/A for its fiscal year ended December 31, 2001 and incorporated herein by this reference, on May 22, 2002 the Company issued 3,791,393 shares of its common stock having a value of $37,914 to Cyber Holdings, Inc. in consideration of the grant of the license under said License Agreement.
On May 22, 2002, the Company issued 386,777 shares of common stock to Benny Blom, Chief Executive Officer of the Company, in lieu of cash compensation, for a total value of $3,868.
Pursuant to a registration statement on Form S-8 filed with the Securities and Exchange Commission on May 28, 2002 and incorporated herein by this reference, on June 30, 2002, the Company issued 816,364 shares of common stock for various services and products for a total value of $8,163.
Discontinued Operations
During 2000, the Company sold BidInvite, Inc. In 2001, the Company did not renew the oil, gas, and mineral lease rights, the only asset of Silver Valley Energy (SVE). In August 2001, Independent News and Pompton Valley Publishing Company and all newspaper and related activities ceased operations. As summarized in the schedule following, these subsidiaries are reported as discontinued operations in the financial statements for both 2002 and 2001.
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ABSS, CORP. AND SUBSIDIARIES f.k.a UNICO, INC.
UNAUDITED INTERIM CONSOLIDATED CONDENSED
STATEMENTS OF DISCONTINUED OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
| THREE MONTHS | SIX MONTHS | ||||||||
| 2002 | 2001 | 2002 | 2001 | ||||||
| REVENUE | $ | - | $ | 607,947 | $ | - | $ | 1,076,449 | |
| EXPENSES | |||||||||
| Postage & costs of production | - | 360,786 | - | 634,073 | |||||
| Selling, general & administrative | - | 397,368 | - | 636,232 | |||||
| Depreciation of equipment | - | 2,302 | - | 2,302 | |||||
| Amortization of goodwill | - | 16,333 | - | 32,666 | |||||
| Total expenses | - | 776,789 | - | 1,305,273 | |||||
| INCOME (LOSS) FROM OPERATIONS | - | (168,842) | - | (228,824) | |||||
| PROVISION FOR INCOME TAXES | - | 1005 | - | 1,005 | |||||
| NET INCOME (LOSS) | $ | - | $ | (169,847) | $ | - | $ | (229,829) | |
| SUMMARY OF NET INCOME (LOSS) | |||||||||
| BY SUSBSIDIARY: | |||||||||
| Bidinvite, Inc. | $ | - | $ | - | $ | - | $ | - | |
| Silver Valley Energy | - | - | - | - | |||||
| Independent News, Pompton Valley | - | - | - | ||||||
| Publishing Co. & related activities | - | (169,847) | - | (229,829) | |||||
| Net Income (Loss) | $ | - | $ | (169,847) | $ | - | $ | (229,829) | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
In August, 2001, the Company ceased its newspaper operations and in December of 2001 the Company closed TheLocalTimes.com to change its business to become a fashion and design company. On October 3, 2001, the Company incorporated Money Bucket, Inc., a Nevada corporation, to become the operational unit of the Company's fashion business. On December 17, 2001, ABSS entered into a licensing and marketing agreement to produce and market Aleksander Blå, a line of women's clothing and to produce and develop a fashion related Internet portal, Fashion Expo.
During the first six months of 2002, the Company has produced its collections Aleksander Blå, "JeansWear" and Aleksander Blå, "Cashmere", to be presented at the WWDMAGIC, http://magiconline.com trade show in Las Vegas during August 26-29 of 2002. The Company had no revenue during the second quarter of 2002. The Company's operations are currently being financed through a shareholder, who plans to continue to do so until additional financing becomes available either from internal operations or external sources. In addition, the Company plans to use its shares in lieu of monetary payments to compensate various employees, consultants, and advisors.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company has been sued in connection with its acquisition of Silver Valley Energy (SVE). In addition, in October 2000 the Company received a default judgment in the amount of $960,000. The Company is attempting to negotiate a non-monetary settlement.
The Company has been sued by the former Chief Executive Officer of BidInvite, Inc. The lawsuit is filed in the Superior Court of the State of Delaware, Sussex County, entitled "David Venables v Unico, Inc. and BidInvite.com, Inc., Case No OOC-11-015 THG." The case is a claim for unpaid wages and breach of contract. On December 12, 2000 Venables obtained a judgment by default (for failure to respond to the Complaint) against Unico,Inc. and BidInvite. The amount of the judgment is $1,360,000. Management believes that the suit is without substance and is attempting to have the default judgment vacated. Legal counsel indicates it is difficult to estimate the chances of vacating the judgment.
NexGen has alleged that the Company is in default with respect to its $200,000 note payable issued in connection with its acquisition of The Independent News. At December 31, 2000 $156,000 remains unpaid. At December 31, 2001 the $156,000 remaining unpaid is written off to $ -0- as management believes that certain financial misrepresentations were made in connection with its acquisition of The Independent News. Nothing has been heard from NexGen lately. Legal Counsel indicates it does not appear likely that NexGen will be taking any affirmative action.
The Company is also named in a lawsuit against Independent News (now defunct) for bills due and owing apparently for the printing of the prior Independent News. Legal counsel indicates that Independent News, now defunct, would not pay it and that it would be difficult, if not impossible, for the plaintiff to show liability on behalf of the Company (Unico) as a separate operating corporate entity to be responsible for the bills and obligations of the Independent News.
Management estimates that the costs to settle these judgments and lawsuits for the Company should not exceed an aggregate of $1,200,000. Accordingly, the accrual for litigation and judgments is recognized in the financial statements at $1,2000,000.
Item 2. Change of Securities
On April 25, 2002 the Company name changed to ABSS, Corp. as has been recognized in these unaudited financial statements. Also on April 25, 2002, the Company effected a 1 for 30 reverse stock split, which is reflected in these unaudited financial statements. The number of shares resulting, inclusive of rounding adjustments, was 127,509.
Pursuant to the provisions of that certain License Agreement dated December 17, 2001 and filed with the Securities and Exchange Commission as an Exhibit to the Company's Form 10KSB/A for its fiscal year ended December 31, 2001 and incorporated herein by this reference, on May 22, 2002 the Company issued 3,791,393 shares of its common stock having a value of $37,914 to Cyber Holdings, Inc. in consideration of the grant of the license under said License Agreement.
On May 22, 2002, the Company issued 386,777 shares of common stock to Benny Blom, Chief Executive Officer of the Company, in lieu of cash compensation.
Pursuant to a registration statement on Form S-8 filed with the Securities and Exchange Commission on May 28, 2002 and incorporated herein by this reference, on June 30, 2002, the Company issued 816,364 shares of common stock for various services and products for a total value of $8,163.
Item 3. Exhibits
Exhibit 99.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Signatures
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed in its behalf by the undersigned, thereunto duly authorized, on August 16, 2002.
ABSS, Corp.
Registrant
/s/ Benny Blom
Benny Blom
Director and CEO
EXHIBIT 99.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ABSS, Corp., (the "Company") on Form 10-QSB for the period ending June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002 that (based on their knowledge): (1) the Report fully complies with the requirements of Section 13(a) of 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
/s/ Benny Blom
Benny Blom, Chief Executive Officer
and Chief Financial Officer
August 16, 2002