-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SD749N4l9NGLMPlfU4EQkKFt77eLI9lWqLr+hOsG7YY5OtQ4iK8pdcXOCIaehHru zTnfn/YvktFQIjZp3Wd3yQ== 0001348117-06-000003.txt : 20060420 0001348117-06-000003.hdr.sgml : 20060420 20060420162135 ACCESSION NUMBER: 0001348117-06-000003 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20060420 DATE AS OF CHANGE: 20060420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BUSINESS CORP CENTRAL INDEX KEY: 0000820408 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 680133692 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-16417-LA FILM NUMBER: 06770240 BUSINESS ADDRESS: STREET 1: 222 GRACE CHURCH STREET STREET 2: SUITE 300 CITY: PORT CHESTER STATE: NY ZIP: 10573 BUSINESS PHONE: 9149395081 MAIL ADDRESS: STREET 1: 222 GRACE CHURCH STREET STREET 2: SUITE 300 CITY: PORT CHESTER STATE: NY ZIP: 10573 FORMER COMPANY: FORMER CONFORMED NAME: LOGISTICS MANAGEMENT RESOURCES INC DATE OF NAME CHANGE: 20010426 FORMER COMPANY: FORMER CONFORMED NAME: U S TRUCKING INC DATE OF NAME CHANGE: 19980923 FORMER COMPANY: FORMER CONFORMED NAME: NORTHERN DANCER CORP DATE OF NAME CHANGE: 19930723 10QSB/A 1 abc10qa063005.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-QSB/A (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, 2005 [ ] Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . -------------------- -------------------- Commission File No: 33-9640-LA ---------- AMERICAN BUSINESS CORPORATION ----------------------------- (Name of Small Business in its Charter) Colorado 90-0249312 -------- ---------- (State or Other Jurisdiction of Incorporation) (IRS Employer Id. No.) 222 Grace Church Street, Suite 300, Port Chester, NY 10573 ----------------------------------------------------------- (Address of Principal Office including Zip Code) Issuer's telephone Number: (914) 939-5081 -------------- Check whether the Registrant (1) has 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 [ ] APPLICABLE ONLLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, par value $.001 per share, 69,870,517 shares at June 30, 2005. Transitional Small Business Disclosure Format (Check one): Yes [ ] NO [ X ]. 1 AMERICAN BUSINESS CORPORATION FORM 10-QSB - QUARTER ENDED JUNE 30, 2005 INDEX Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements..........................................2 Condensed Balance Sheets at June 30, 2005 (unaudited) and December 31, 2004...........................................3 Condensed Statements of Operations for the Six Months and Three Ended June 30, 2005 and 2004 (unaudited)..............4 Condensed Statement of Stockholders' Deficit for the Period January 1, 2004 through June 30, 2005 (unaudited)...........5 Condensed Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004 (unaudited)..........................6 Notes to the Condensed Financial Statements...................7 Item 2. Management's Discussion and Analysis.........................10 Item 3. Controls and Procedures......................................10 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.............................11 SIGNATURES Signatures...................................................11 Exhibits.....................................................12 -------------------------------- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The unaudited condensed balance sheet of the Registrant as of June 30, 2005, the audited balance sheet at December 31, 2004, and the unaudited condensed statements of operations, stockholders' deficit, and cash flows for the six and three month periods ended June 30, 2005 and 2004 follow. The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. 2 AMERICAN BUSINESS CORPORATION CONDENSED BALANCE SHEETS June 30, 2005 December 31, [unaudited] 2004 ------------- ------------ Assets Current assets - Cash $ 3,986 $ 6,845 ------------- ------------ Total current assets 3,986 6,845 Equipment, net 18,216 20,493 ------------- ------------ Total Assets $ 22,202 $ 27,338 Liabilities and Stockholders' Deficit Current Liabilities Accrued expenses $ 380,564 $ 30,564 Accrued interest 3,273,268 3,273,268 Due to related parties 3,843,090 3,641,375 Loans payable 2,518,000 2,518,000 Convertible debentures 3,793,460 3,793,460 Redeemable Series B Convertible Preferred Stock 2,000,000 2,000,000 Estimated liability for claims and litigation 4,440,657 4,440,657 ------------- ------------ Total Current Liabilities 20,249,039 19,997,324 Commitments and contingencies -- -- Stockholders' Equity (Deficit) Preferred stock, no par value; (10,000,000 shares authorized) Series A (90,000 shares issued and outstanding) 76 76 Series B (2,000 shares issued and outstanding) -- -- Series C (450,000 shares issued and outstanding) 135,000 135,000 Series D (950 shares issued and outstanding) 950,000 950,000 Series E (2,300 shares issued and outstanding) 2,300,000 2,300,000 Common stock, par value $.001 per share; 500,000,000 authorized, 69,870,517 shares issued and outstanding 69,870 69,870 Additional paid-in capital 14,872,987 14,872,987 Accumulated deficit (38,554,770) (38,297,919) ------------- ------------ Total Stockholders' Deficit (20,226,837) (19,969,986) ------------- ------------ Total Liabilities and Stockholders' Deficit $ 22,202 $ 27,338 ============= ============ See notes to condensed financial statements. 3 AMERICAN BUSINESS CORPORATION CONDENSED STATEMENTS OF OPERATIONS [Unaudited] Six Months Ended Three Months Ended June 30, June 30, -------- -------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues Depreciation and amortization 2,277 2,500 1,139 2,500 Interest expense 61,715 58,147 31,087 29,290 Administrative expenses 192,859 354,037 110,866 262,975 ---------- ---------- ---------- ---------- Total operating expenses 256,851 414,684 143,092 294,765 ---------- ---------- ---------- ---------- Net loss $(256,851) $(414,684) $(143,092) $(294,765) ========== ========== ========== ========== Net loss per common share - basic and fully-diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) ========== ========== ========== ========== Weighted average number of common shares outstanding 69,870,517 62,299,093 69,870,517 68,245,524 ========== ========== ========== ========== See notes to condensed financial statements. 4 AMERICAN BUSINESS CORPORATION CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
Preferred Preferred Preferred Preferred Preferred Stock Stock Stock Stock Stock Series A Series B Series C Series D Series E Shs Amt Shs Amt Shs Amt Shs Amt Shs Amt --------------------------------------------------------------------------------- Balance, January 1, 2004 990,000 $ 762 2,000 $ - 450,000 $135,000 950 $950,000 2,300 $2,300,000 Shares converted (900,000) (686) - - - - - - - - Shares for services - - - - - - - - - - Shares as deposit - - - - - - - - - - Deposit cancelled - - - - - - - - - - Rent contributed - - - - - - - - - - Net loss - - - - - - - - - - -------------------------------------------------------------------------------- Balance, December 31, 2004 90,000 $ 76 2,000 $ - 450,000 $135,000 950 $950,000 2,300 $2,300,000 [unaudited] Net loss - - - - - - - - - - -------------------------------------------------------------------------------- Balance, June 30, 2005 90,000 $ 76 2,000 $ - 450,000 $135,000 950 $950,000 2,300 $2,300,000 --------------------------------------------------------------------------------
CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT (Continued)
Additional Total Common Stock Paid-In Accumulated Stockholders' Shs Amt Capital Deficit Deficit ---------- ------- ----------- ------------- ------------- Balance, January 1, 2004 54,370,517 $54,370 $14,538,201 $(37,320,521) $(19,342,188) Shares Converted 9,000,000 9,000 (8,314) - - Shares for services 6,500,000 6,500 333,500 - 340,000 Shares as deposit 5,000,000 5,000 145,000 - 150,000 Deposit cancelled (5,000,000) (5,000) (145,000) - (150,000) Rent contributed - - 9,600 - 9,600 Net loss - - - (977,398) (977,398) ---------------------------------------------------------- Balance, December 31, 2004 69,870,517 $69,870 $14,872,987 $(38,297,919) $(19,969,986) [unaudited] Net loss - - - (256,851) (256,851) ----------------------------------------------------------- Balance June 30, 2005 69,870,517 $69,870 $14,872,987 $(38,554,770) $(20,226,837) -----------------------------------------------------------
See notes to condensed financial statements. 5 AMERICAN BUSINESS CORPORATION CONDENSED STATEMENTS OF CASH FLOWS 302: Six Months Ended June 30, 2005 2004 [unaudited] [unaudited] ------------- ------------ Cash flows from operating activities - Net loss $ (256,851) $ (414,684) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization expense 2,277 2,500 Issuance of common shares for services -- 132,500 Increase in liabilities Accrued expenses 50,000 15,221 Accrued interest - related party 61,715 58,147 ------------- ------------ Net cash used by operating activities (142,859) (206,316) ------------- ------------ Net proceeds from related parties 140,000 275,981 ------------- ------------ Net cash provided by financing activities 140,000 275,981 ------------- ------------ Net change in cash (2,859) 69,665 Cash at beginning of period 6,845 -- ------------- ------------ Cash at end of period $ 3,986 $ 69,665 ============= ============ SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES None. See notes to condensed financial statements. 6 AMERICAN BUSINESS CORPORATION NOTES TO THE CONDENSED FINANCIAL STATEMENTS Note 1 - Basis of Presentation The interim financial statements included herein are presented in accordance with United States generally accepted accounting principles and have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. The Registrant's operating results for the six and three month periods ended June 30, 2005, and 2004 are not necessarily indicative of the results that may be or were expected for the years ended December 31, 2005, and 2004. It is suggested that these interim financial statements be read in conjunction with the audited financial statements and notes thereto of the Registrant included in its Form 10-KSB for the period ended December 31, 2004. Reclassifications - Certain amounts have been reclassified to conform with the current presentation. The reclassifications had no impact on previously reported results of operations or stockholders' deficit. Note 2 - Related Party Transactions As previously reported, and by virtue of (i) a 6% secured convertible promissory note due to Brentwood Capital Corp., an affiliated privately owned New York merchant banking corporation ("Brentwood"), dated September 27, 2002, in the aggregate amount of $2,103,582, including principal and accrued interest through June 30, 2005, which is convertible into 210,358,161 shares of the Registrant's common stock; and (ii) Brentwood's record ownership of 1,435,000 shares of the Registrant's common stock, Brentwood is the owner of 65% of the Registrant's voting securities. The Registrant may be deemed to be controlled by Brentwood. Similarly, and as previously reported, Midwest Merger Management, LLC, a Kentucky limited liability company and its affiliated entities ("Midwest") is the record owner of 12,459,800 shares of the Registrant's common stock, 90,000 shares of Series A preferred stock which, assuming conversion, are the equivalent of 900,000 common shares, and 450,000 shares of Series C preferred stock which are convertible into 45,000,000 common shares, for an aggregate of 15% of the Registrant's voting securities. Accordingly, the Registrant may be deemed to be controlled by M idwest. During the six month period ended June 30, 2005, and in connection with its ongoing support of the Registrant, Midwest contributed an aggregate of $140,000 to the Registrant to fund its activities during the six months ended June 30, 2005. 7 At June 30, 2005, the aggregate indebtedness to related parties was as follows: Brentwood Capital Corp. $2,103,582 Midwest Merger Management LLC $1,739,508 ---------- $3,843,090 ========== The Registrant intends to settle its obligations to related parties in the course of its planned reorganization with a privately held viable business candidate. Note 3 - Per Share Results The common share equivalents associated with the Registrant's issued and outstanding convertible notes and Preferred Stock were not included in computing per share results as their effects were anti-dilutive. Note 4 - Income Taxes (Benefits) At December 31, 2004, the Registrant had available approximately $37,000,000 of net operating loss carry-forward, which expires between December 31, 2008 and December 31, 2021, that may be used to reduce future taxable income. As utilization of this carry-forward is less than certain, its potential tax benefit to the Registrant of approximately $8,000,000 is fully reserved. Note 5 - Series B Preferred Stock The provisions of the Series B Preferred Stock allow the holders to redeem their shares upon the occurrence of certain events including the Registrant's inability to issue free trading common stock to such holders because the shares have not been registered under the Securities Act. As the effectiveness of a registration statement under the Securities Act is outside of Registrant's control, the Series B Preferred Stock has been classified on the Registrant's balance sheet as a liability. Note 6 - Going Concern The Registrant's condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Registrant had negative working capital at June 30, 2005, of $20,245,053. In addition, the Registrant has incurred an accumulated deficit of $(38,554,770) through June 30, 2005. The Registrant is dependent upon the efforts of Midwest to raise proceeds for its continued survival. The Registrant's ability to continue to receive this level of support from Midwest is uncertain. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Registrant is unable to continue as a going concern. 8 Item 2. Management's Discussion and Analysis The following discussion contains forward-looking statements regarding the Registrant, its business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause the Registrant's actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation, the Registrant's ability to resolve the affairs of its creditors and other investors; or to locate and thereafter negotiate and consummate a business combination with a profitable privately owned company. When used in this discussion, words such as "believes," "anticipates," "expects," "intends," and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Registrant undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the SEC that attempt to advise interested parties of the risks and factors that may affect the Registrant's business. Six Month Periods Ended June 30, 2005 and 2004: Revenues - As a direct result of the Registrant's inability to continue its failing freight transportation services beyond November 2000, the Registrant had no revenues during either the six month period ended June 30, 2005 ("6M05") or the six month period ended June 30, 2004 ("6M04"). The Registrant continues working through the restructure of its debt and the mitigation of outstanding litigation. Expenses and Income Taxes - General and administrative expenses for 6M05 were $256,851 compared to $414,684 for 6M04. This decrease is consistent with the Registran's strategy of redirecting its focus toward becoming a candidate to acquire or merge with a profitable, privately-held business operation. Accordingly, the Registrant's recurring administrative expenses only include: (i) professional fees (legal and accounting) associated with the resolution of the Registrant's affairs with its former creditors and investors, and the maintenance of its reporting requirements and good standing, (ii) interest on its outstanding convertible note due to Brentwood (commencing on October 1, 2003), (iii) other ancillary expenses, and (iv) the payment of minimum franchise taxes. Net Income (Loss) - Accordingly, the Registrant experienced a net loss of $(256,851) for 6M05 compared to a net loss of $(414,684) for 6M04. When related to the weighted average number of common shares outstanding during 6M05 and 6M04, per share loss results were $0.00 and $0.00, respectively. 9 Quarters Ended June 30, 2005 and 2004: Revenue - As a direct result of the Registrant's inability to continue its failing freight transportation services beyond November 2000, the Registrant had no revenues during either the second quarter June 30, 2005 ("2Q05") or the second quarter ended June 30, 2004 ("2Q04"). The Registrant continues working through the restructure of its debt and the mitigation of outstanding litigation. Expenses and Income Taxes - General and administrative expenses for 2Q05 were $143,092 compared to $294,765 for 2Q04. This decrease is consistent with the Registrant's strategy of redirecting its focus toward becoming a candidate to acquire or merge with a profitable, privately-held business operation. Accordingly, the Registrant's recurring administrative expenses only include: (i) professional fees (legal and accounting) associated with the resolution of the Registrant's affairs with its former creditors and investors, and the maintenance of its reporting requirements and good standing, (ii) interest on its outstanding convertible note due to Brentwood (commencing on October 1, 2003), (iii) other ancillary expenses, and (iv) the payment of minimum franchise taxes. Net Income (Loss) - Accordingly, the Registrant experienced a net loss of $(143,092) for 2Q05 compared to a net loss of $(294,765) for 2Q04. When related to the weighted average common shares outstanding during each quarter, per share results were $0.00 and $0.00, for 2Q05 and 2Q04, respectively. Liquidity and Capital Resources The Registrant does not have any permanent capital resources. Consistent with the inability to continue its failing freight transportation services business beyond November 2000, and its subsequent disposition in connection with arranging the funding of the GE Credit Corp. settlement in September 2002, the Registrant's principal activity has been centered in resolving the remaining claims of its former creditors so it may seek a business combination. In this connection, Midwes t has agreed to provide Registrant with reasonable legal, accounting and administrative resources to resolve its affairs and conduct its search for a business combination candidate. Accordingly, the Registrant is entirely dependent upon: (i) Midwest providing the Registrant with certain advisory services in connection with the resolution of its affairs on favorable terms; (ii) the willingness of Midwest to provide the Registrant with certain office and administrative facilities and to fund virtually all of the Registrant's settlements with its creditors; and (iii) the Registrant's successfully implementing a business combination with a profitable operating company. There can be no assurances that Midwest will be successful in resolving all or substantially all of Registrant's affairs, that Midwest will fund any further settlements, or that the combined efforts of Midwest and the Registrant will lead to a successful business combination. Midwest has advanced the Registrant $1,739,509 a June 30, 2005, $85,000 of which occurred during the three months ended June 30, 2005, demonstrating its continued support during the current quarter. 10 Item 3. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures The Registrant maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Registrant files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, the Chief Executive and Chief Financial officers of the Registrant concluded that the Registrant's disclosure controls and procedures were effective as more further described in Rule 13a-15(c) of the Securities Exchange Act of 1934. (b) Changes in Internal Controls The Registrant made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 31.1 - Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.2 - Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Reports on Form 8-K: None SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. American Business Corporation By: /s/ Anthony R. Russo ------------------------ Chief Executive Officer and Director By: /s/ Anthony R. Russo ------------------------ Chief Financial Officer Dated: April 20, 2006 11 Exhibit Index Exhibit Number Description - --------- ----------- 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 12 EXHIBIT 31.1 AMERICAN BUSINESS CORPORATION CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Anthony R. Russo, the Registrant's Chief Executive and Chief Financial Officer, certify that: 1. I have reviewed this amended quarterly report on Form 10-QSB of American Business Corporation; 2. Based on my knowledge, this amended quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 amended quarterly report; and 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)) for the Registrant and have: a) Designed and recently commenced the implementation of such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this amended quarterly report is being prepared; and b) Evaluated the increasing effectiveness of the Registrant's disclosure controls and procedures and presented in this report my 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. Dated: April 20, 2006 /s/ Anthony R. Russo - ----------------------- Chief Executive Officer and Chief Financial Officer 13 EXHIBIT 32.1 AMERICAN BUSINESS CORPORATION CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Amended Quarterly Report of American Business Corporation on Form 10-QSB for the quarterly period ended June 30, 2005, as filed with the Securities and Exchange Commission on April 20, 2006 (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes - -Oxley Act of 2003, that: (1) The Report fully complies with requirements of Section 13(a) or 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 American Business Corporation. Date: April 20, 2006 /s/ Anthony R. Russo - ----------------------- Chief Executive Officer and Chief Financial Officer 14 -----END PRIVACY-ENHANCED MESSAGE-----