UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended November 30, 2003.
AMERICAN BUSING CORPORATION
---------------------------
(Exact name of registrant as specified in its charter)
Nevada 33-1025552
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification no.)
Suite 1400-3675 Pecos-McLeod Las Vegas, Nevada 89121-3881
23518 North 78th Street, Scottsdale, Arizona, 85255
Telephone (602) 206-3582 Facsimile: 480-502-0412
------------------------------------------------
(Address and telephone number of principal executive offices)
Stepp Law Group
32 Executive Park, Suite 105, Irvine, California 92614
Tel: (949) 660-9700 Fax: (949) 660-9010
---------------------------------------
(Name, address and telephone number for Agent for Service)
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.
(X) Yes / / No
As of January 12, 2004, the Registrant had 11,075,000 shares of Common
Stock, par value $0.001 per share outstanding.
AMERICAN BUSING CORPORATION
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION.................................................1
ITEM 1. FINANCIAL STATEMENTS...............................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS..................................................8
ITEM 3. CONTROLS AND PROCEDURES...........................................12
PART II. OTHER INFORMATION...................................................12
ITEM 1. LEGAL PROCEEDINGS.................................................12
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.........................12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............12
ITEM 5. OTHER INFORMATION.................................................13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................13
SIGNATURES...................................................................14
EXHIBIT 32.1 - CERTIFICATIONS.............................................15
EXHIBIT 32.2 - CERTIFICATIONS.............................................16
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Table of Contents Page i
AMERICAN BUSING CORPORATION
(A Development Stage Company)
PART I. FINANCIAL INFORMATION
-----------------------------
ITEM 1. Financial Statements
----------------------------
CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
Page
----
Consolidated Financial Statements:
Consolidated Balance Sheet F-2
Consolidated Statement of Operations F-3
Consolidated Statement of Changes in Stockholders' Equity F-4 - F-5
Consolidated Statement of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
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Form 10Q-SB Quarter Ending November 30, 2003 Page 1
AMERICAN BUSING CORPORATION
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
--------------------------
ASSETS
November 30, August 31,
2003 2003
(Unaudited) (See Note 1)
---------------- ----------------
CURRENT ASSETS
Cash $ 6,028 $ 1,706
Accounts Receivable 2,493 --
---------------- ----------------
Total current assets 8,521 1,706
---------------- ----------------
PROPERTY AND EQUIPMENT
Transportation equipment (net of accumulated
depreciation of $4,290 at November 30, 2003;
$3,588 at August 31, 2003) 11,475 9,166
---------------- ----------------
Total property and equipment 11,475 9,166
---------------- ----------------
Total assets $ 19,996 $ 10,872
================ ================
CURRENT LIABILITIES
Accounts payable $ 23,811 $ 10,942
Advances from shareholder 20,000 20,000
Due to related parties 450 6,899
Accrued salaries 13,800 --
---------------- ----------------
Total current liabilities 58,061 37,841
---------------- ----------------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 75,000,000
shares authorized, 11,075,000 shares issued and
outstanding at November 30, 2003 and at
August 31, 2003 11,075 11,075
Paid-in Capital 13,540 13,240
Discount on common stock issued (7,990) (7,990)
Income (deficit) accumulated during the
development period 55,608) (43,390)
Other accumulated comprehensive income 928 106
---------------- ----------------
(38,055) (26,959)
Less: Share Subscription Receivable 10 10
---------------- ----------------
Total stockholders' equity (38,065) (26,969)
---------------- ----------------
Total liabilities and stockholders' equity $ 19,996 $ 10,872
================ ================
F-1
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Form 10Q-SB Quarter Ending November 30, 2003 Page 2
AMERICAN BUSING CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
Unaudited
August 7,
Three Three 2002
months months (inception)
ended ended through
November 30, November 30, November 30,
2003 2002 2003
---------------- ---------------- ----------------
Revenues $ 39,782 $ 29,898 $ 172,176
---------------- ---------------- ----------------
Expenses:
Transportation expense 9,553 10,706 54,426
Salaries 27,936 7,965 60,339
Advertising 130 -- 426
Depreciation 450 793 3,804
Insurance and Licenses 1,270 1,278 6,162
Professional Services 11,436 -- 48,635
Management Fees -- -- 42,421
Services paid by issuing common shares -- -- 3,815
Administrative expenses 925 2,772 7,262
---------------- ---------------- ----------------
Total expenses 51,700 23,514 227,290
---------------- ---------------- ----------------
Income (Loss) before income taxes (11,918) 6,384 (51,114)
Interest expense (300) -- (494)
Income taxes (benefit) -- 3,093 --
---------------- ---------------- ----------------
Net Income (Loss) $ (12,218) $ 3,291 $ (55,608)
================ ================ ================
Net Income per common share $ * $ * $ *
Average common shares outstanding 11,075,000 9,150,000 10,557,692
* Less than $.01 per share
Other Comprehensive Income:
Net Income $ (12,218) $ 3,291 $ (55,608)
Foreign currency translation adjustment 822 28 928
---------------- ---------------- ----------------
Total comprehensive income $ (11,396) $ 3,319 $ 54,680
================ ================ ================
F-2
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Form 10Q-SB Quarter Ending November 30, 2003 Page 3
AMERICAN BUSING CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------
August 7, 2002 (Inception) Through November 30, 2003
Income
(Deficit)
Accumulated
Accumulated During
Common Common Discount Other the
Stock Stock On Paid in Comprehensive Development
Shares Amount Common Stock Capital Income Stage Total
------------ ------------ ------------ ------------ ------------ ------------ ------------
Common stock issued on
August 7, 2002 100 $ 65 $ -- $ -- $ -- $ -- $ 65
Recapitalization on reverse
acquisition August 8, 2002 7,999,900 7,935 (7,935) -- -- -- --
Net income for the period
from August 7, 2002
(inception) through
August 31, 2002 -- -- -- -- -- 73 73
------------ ------------ ------------ ------------ ------------ ------------ ------------
8,000,000 8,000 (7,935) -- -- 73 138
Balance August 31, 2002
Common stock issued on
October 22, 2002 private
placement 2,000,000 2,000 -- -- -- -- 2,000
Common stock issued on
October 31, 2002 private
placement 1,050,000 1,050 -- 9,450 -- -- 10,500
Redemption of common
stock November 12, 2002 (8,000,000) (8,000) 7,935 65 -- -- --
Issuance of common stock
on November 12, 2002 8,000,000 8,000 (7,990) -- -- -- 10
Issuance of common stock
on June 6, 2003 25,000 25 -- 3,725 -- -- 3,750
F-3
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Form 10Q-SB Quarter Ending November 30, 2003 Page 4
AMERICAN BUSING CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------
August 7, 2002 (Inception) Through November 30, 2003, Continued
Income
(Deficit)
Accumulated
Accumulated During
Common Common Discount Other the
Stock Stock On Paid in Comprehensive Development
Shares Amount Common Stock Capital Income Stage Total
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net income for the period
from September 1, 2002
through August 31, 2003 -- -- -- -- 106 (43,463) (43,463)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance, August 31, 2003 11,075,000 11,075 (7,990) 13,240 106 (43,390) (26,959)
Capital contributed by
Shareholder (unaudited) -- -- -- 300 -- -- 300
Net income for the period
from September 1, 2003
through November 30, 2003
(unaudited) -- -- -- -- 822 (12,218) (11,396)
------------ ------------ ------------ ------------ ------------ ------------ ------------
11,075,000 11,075 (7,990) 13,540 928 (55,608) (33,055)
Less common stock
subscription receivable -- -- -- -- -- -- (10)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance, November 30, 2003
(unaudited) 11,075,000 $ 11,075 $ (7,990) $ 13,540 $ 928 $ (55,608) $ (38,065)
============ ============ ============ ============ ============ ============ ============
F-4
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Form 10Q-SB Quarter Ending November 30, 2003 Page 5
AMERICAN BUSING CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
Unaudited
August 7,
Three Three 2002
Months Months (inception)
Ended Ended through
November 30, November 30, November 30,
2003 2002 2003
---------------- ---------------- ----------------
Cash flows from operating activities:
Net Income (loss) $ (12,218) 3,291 (55,608)
Reconciling Adjustments:
Depreciation 450 793 3,804
Imputed interest on advances payable 300 -- 300
Common stock issued for services -- -- 3,815
Change in operating assets and liabilities:
Accounts Receivable (2,493) (10,853) (2,493)
Bank Overdraft -- 3,182 --
Accounts payable 12,869 (2,811) 23,811
Accrued salaries 13,800 - 13,800
Accounts payable - related parties (6,449) (330) 450
Income tax payable -- 3,107 --
---------------- ---------------- ----------------
Net cash provided (used) by operating activities 6,259 (3,621) (12,121)
---------------- ---------------- ----------------
Cash flows from financing activities:
Shareholders advances -- -- 20,000
Share capital issued -- 12,500 12,500
---------------- ---------------- ----------------
Cash provided by financing activities -- 12,500 32,500
---------------- ---------------- ----------------
Cash flows from investing activities:
Acquisition of property and equipment (2,759) (909) (15,279)
---------------- ---------------- ----------------
Cash (used) by investing activities (2,759) (909) (15,279)
---------------- ---------------- ----------------
Foreign currency translation adjustment 822 28 928
---------------- ---------------- ----------------
Net change in cash 4,322 7,998 6,028
Beginning cash balance 1,706 2,091 --
---------------- ---------------- ----------------
Ending cash balance $ 6,028 10,089 6,028
================ ================ ================
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest -- -- --
Income taxes -- -- --
F-5
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Form 10Q-SB Quarter Ending November 30, 2003 Page 6
AMERICAN BUSING CORPORATION
(A Development Stage Company)
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NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
Note 1 - Financial Statements
-----------------------------
American Busing Corporation has prepared the accompanying consolidated financial
statements included herein without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosure normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these financial statements be read in conjunction with the August
31, 2003 audited restated financial statements and the accompanying notes
thereto. While management believes the procedures followed in preparing these
financial statements are reasonable, the accuracy of the amounts are in some
respects dependant upon the facts that will exist, and procedures that will be
accomplished by the Company later in the year. The results of operations for the
interim periods are not necessarily indicative of the results of operations for
the full year. In management's opinion all adjustments necessary for a fair
presentation of the Company's financial statements are reflected in the interim
periods included.
Amounts shown for August 31, 2003 were taken from the audited financial
statements of that date.
Note 2 - Financial Statements
-----------------------------
The advances made by the shareholder is non-interest bearing and that interest
has been imputed at the rate of 6% per annum.
F-6
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Form 10Q-SB Quarter Ending November 30, 2003 Page 7
AMERICAN BUSING CORPORATION
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------
DESCRIPTION OF BUSINESS
-----------------------
Paratransit Busing Corporation was incorporated on July 23, 2002, for the
purpose of participating in the transportation industry. In that regard,
Paratransit Busing Corporation caused American Busing Company, a Nevada
corporation, to be formed on August 5, 2002, and Able Busing Corporation, a
Saskatchewan corporation, to be formed on August 7, 2002.
Paratransit Busing Corporation is owned by Perry Ceccarelli. Shortly after
incorporating Paratransit Busing Corporation, American Busing Company, and Able
Busing Corporation, Mr. Ceccarelli learned that his mother had little time to
live, and, therefore, Mr. Ceccarelli decided to discontinue the participation by
him and Paratransit Busing Corporation in the transportation business.
Paratransit Busing Corporation is considered to be our predecessor from the
period commencing on July 23, 2002, until August 5, 2002 (our date of
incorporation). During this time Paratransit Busing Corporation had no
operations. We have no financial statements of Paratransit Busing Corporation to
include herein. We believe that the financial situation of Paratransit Busing
Corporation for that period that it was our predecessor are not material and,
therefore, we have decided not to include those financial statements herein.
We were established for the purpose of conducting the business of busing
handicapped persons to various educational programs that are undertaken by their
caregivers. It is the Company's objective to provide to its clients an
efficient, professional and safe transportation of these persons to and from
their learning programs.
To accomplish the above objective the founder of our company, Perry Ceccarelli,
had his company Paratransit Busing Corporation establish American Busing Company
(a Nevada company) and Able Busing Corporation (a Saskatchewan, Canada company).
Once this was completed a reorganization was put into effect so that American
Busing Corporation solely owned Able Busing Corporation. The reorganization was
effected by Paratransit Busing Corporation selling its 100 shares in Able Busing
Corporation to us in exchange for 8,000,000 common shares in our company. This
transaction is commonly referred to as a reverse acquisition. There were no
material agreements in completing this reverse acquisition because Paratransit
Busing Corporation controlled both Able Busing Corporation and American Busing
Corporation. Able Busing Corporation was not an operating entity prior to the
reverse acquisition. The business purpose for performing the reverse acquisition
was to establish a parent and subsidiary corporate structure that allowed our
company to carry on business in the Province of Saskatchewan, Canada through a
subsidiary corporation registered to carry on business in that province. The
Company is the sole shareholder of Able Busing Company established for the
purpose of busing handicapped or mentally challenged persons for Cosmopolitan
Learning Centre Inc. in the Province of Saskatchewan, Canada. The Company has
established this subsidiary to enter the transportation industry in this market.
The sole director of the subsidiary is Ms. Kim Dmuchowski. We employ 8 employees
including Mr. Forister and Ms. Dmuchowski with no full time employee's.
Mr. Perry Ceccarelli was from the date of our inception (August 5, 2002) to the
date of his departure on November 12, 2002 the sole director and officer of our
company. Mr. Ceccarelli resigned these positions on November 12, 2002 because of
the impending death of his mother and therefore was unable to fulfill his duties
to the Company. As a result we redeemed Paratransit Busing Corporation 8,000,000
shares for no consideration and issued from treasury an additional 8,000,000
shares to Mr. Edmond Forister an existing shareholder in our company for $10,
which passed control to Mr. Edmond Forister. Mr. Edmond Forister then became the
sole director and officer of our company and still maintains those roles to the
date of this registration statement.
We have insured our buses from loss or damage through the purchase of our
Government of Saskatchewan license plates. This insurance is provided by the
Government of Saskatchewan and is provided to every vehicle license plate holder
by law. If our buses are in an accident that is our fault we have to pay a $750
deductible. This deductible pays to repair our bus and the other persons
vehicle. If the accident is not our fault we pay nothing and the government
sponsored insurance fund pays for the repair of our bus. We also carry
$2,000,000 personal insurance if any person or third party is injured on or by
our buses.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 8
AMERICAN BUSING CORPORATION
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The role of Mr. Edmond Forister, the sole officer and director of the Company,
is to ensure all private placement funding is conducted in accordance with all
securities legislation; that all accounting functions in the parent and
subsidiary are complete and accurate and prepared in a timely fashion; and, to
ensure all Federal and State public filings are complete and accurate.
The role of Ms. Kim Dmuchowski is to conduct the day-to-day operations of the
subsidiary to the satisfaction of our one client, Cosmopolitan Learning Centre
Inc. Ms. Dmuchowski ensures that the drivers maintain their buses and student
delivery schedules are maintained. The drivers of the buses have a high degree
of autonomy in determining their routes, schedules and are responsible for
maintaining the bus that they drive and reporting the cost to Ms. Dmuchowski for
payment by the subsidiary company. Mr. Dmuchowski is responsible for handling
all complaints for the client.
The Company's subsidiary, Able Busing Company, executed a material contract with
the Cosmopolitan Learning Centre Inc. on August 26, 2002 to provide busing
services. This contract is for a term of two years and pays the subsidiary
company $13,266.32 USD ($16,980.90 CDN) including Goods and Services Tax each
month or $159,195.93 USD ($203,770.80 CDN) annually. The contract has provisions
to increase this compensation by the amount of $116.96 USD ($149.71 CDN) plus
Goods and Services Tax for each person that is bused in excess of 106 persons.
The contract also provide for a 3% inflation increase to the above prices after
the first year of service.
The Company intends to target the following primary markets:
a) Other organizations requiring the busing of their handicapped or
mentally challenged persons;
b) Urban private and public school busing of students from kindergarten
to completion of high school;
c) Rural private and public school busing of students from kindergarten
to completion of high school.
The competitive business condition faced by our Company is the ability to lobby
decision makers who decide busing contracts. Upon the awarding of a contract,
the Company can obtain financing, if required, based on the terms of this
contract with major financial institutions who lend money by taking as security
the income stream from the contract. In the busing industry the bus drivers who
drive the bus will follow the company who obtains the contract. In our
circumstances with Cosmopolitan Learning Centre Inc. we effectively lobbied the
decision makers and won the contract, purchased the buses from the previous
contractor and hired the drivers who drove those buses.
Our Company is one of the smallest busing companies in the busing industry in
the Province of Saskatchewan. We intend to increase our position in the industry
by effectively lobbying other decision makers as the busing contracts come up
for bid or renewal.
The Company believes that the overall growth of its business will be prefaced on
the reference it receives from its performance on the Cosmopolitan Learning
Centre Inc. contract. Upon a good reference being received endorsing the
Company's successful performance of the contract it will be able to apply or bid
on other similar contracts in this industry. No government approval is required
for the busing of handicapped students in the Province of Saskatchewan nor are
we aware of the necessity for government approval of busing handicapped students
in other markets we might be interested in.
As of January 12, 2004 the Board of Directors of Cosmopolitan Learning Centre
Inc. had still not voted on extending our contract with it under similar terms
and conditions for a period of 5 years. The Company has been advised that this
will occur in the first quarter of 2004.
In addition we are presently involved in negotiating the acquisition of another
company in motor sports industry. Please see our 14F-1 filed with the SEC on
December 24, 2003 and our discussion under other information below.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 9
AMERICAN BUSING CORPORATION
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INDUSTRY OVERVIEW
-----------------
Our company participates in the education busing industry by busing handicapped
students to their learning center.
The busing of students both handicapped and non-handicapped is characterized by
intense and substantial competition. A number of our competitors are well
established, substantially larger and have substantially greater market
recognition and greater resources. Increased competition by existing and future
competitors could materially and adversely affect our profitability. Moreover,
our success depends on maintaining a high quality of efficiency so that
timeliness of delivery is achieved.
We will compete with other busing providers in the education busing industry
such as First Bus Canada Limited and Southwest Contract Services Inc. Further,
other busing providers may follow a business strategy similar to ours and may
compete directly with us for the same customers. Most of our competitors have
significantly greater financial, technical, marketing and other resources than
we have.
These potential competitors may be able to respond more quickly to new or
changing opportunities, equipment requirements and customer requirements than us
and may be able to undertake more extensive promotional activities, offer more
attractive terms to customers and adopt more aggressive pricing policies than we
do.
The Company intends to target the following primary markets:
(a) Other organizations requiring the busing of their handicapped or
mentally challenged persons;
(b) Urban private and public school busing of students from kindergarten
to completion of high school;
(c) Rural private and public school busing of students from kindergarten
to completion of high school.
The competitive business condition faced by our Company is the ability to lobby
decision makers who decide busing contracts. Upon the awarding of a contract,
the Company can obtain financing, if required, based on the terms of this
contract with major financial institutions who lend money by taking as security
the income stream from the contract. In the busing industry the bus drivers who
drive the bus will follow the company who obtains the contract. In our
circumstances with Cosmopolitan Learning Centre Inc. we effectively lobbied the
decision makers and won the contract, purchased the buses from the previous
contractor and hired the drivers who drove those buses.
REVENUE
-------
We have a total comprehensive loss of ($11,396) for the three month period ended
November 30, 2003 as compared to the $3,319 comprehensive income earned for the
three month period ended November 30, 2002 (the "Comparative Period"). Our
increase in comprehensive loss is as a result of paying professional fees during
this 3 month period of $11,436 versus none in the prior comparable period and
increasing our salaries expense by putting a manager on the payroll. The Net
Loss to date reflects that our Company operates at a loss due to the start-up
nature of our business.
EXPENSES
--------
We anticipate that our transportation expense will remain relatively stable in
the future because this category will capture all expenses incurred to operate
the vehicles such as gas and maintenance for the year. We anticipate that this
expense will be approximately $38,000 for the period September 1, 2003 to August
31, 2004 given the current rate of expenditure. The reduction of $1,153 for the
Comparative Period is attributable to the drivers knowing their bus route better
than when they first started their routes during the period.
We anticipate that our salaries including statutory remittances will remain
stable in the future because this category will capture all expenses incurred to
pay our bus drivers and manager of approximately $110,000 for the period
September 1, 2003 to August 31, 2004. Salaries have increased during the
Comparative Period by $19,971 due to the company hiring a manager.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 10
AMERICAN BUSING CORPORATION
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We anticipate that advertising expense will remain stable in the future because
we don't have to do much advertising to service the contract. Advertising has
increased during the Comparative Period by $130 due to the company buying lunch
for the drivers from time to time, which was not done last year.
We anticipate that our depreciation expense will remain relatively stable in the
future because this category will capture the capital cost depreciation of our
buses and equipment of approximately $1,800 for the period September 1, 2003 to
August 31, 2004.
We anticipate that our insurance and licenses expense will remain relatively
stable in the future because the licensing agency has not materially increased
its fees for insuring the buses. We anticipate that this expense will be
approximately $5,080 for the period September 1, 2003 to August 31, 2004. This
expense has increased during the Comparative Period by $8 and therefore is not
material.
We anticipate that our professional services fees will increase in the future
because we are continuing our public company status and the expenses that go
along with filing with the Securities Exchange Commission our quarterly and year
end reports. We have also retained professionals to perform services regarding
the acquisition of other companies. We anticipate that this expense will be
approximately $20,000 for the period September 1, 2003 to August 31, 2004. This
expense has increased during the Comparative Period by $11,436 because we
commenced incurring expenses to become public subsequent to November 30, 2002.
We anticipate that our administrative expenses will remain stable in the future
because we will continue to be a reporting company and filing the requisite
quarterly and annual reports with the Securities and Exchange Commission. We
anticipate that this expense will be $3,700 for the period September 1, 2003 to
August 31, 2004. This expense has decreased during the Comparative Period by
$1,847 because we did less administratively and paid our professionals to
maintain our public status.
We anticipate that our income taxes will be zero for the period September 1,
2003 to August 31, 2004 as we intend to pay our subsidiaries management, which
will use up most of our profit.
Due to the foregoing factors, our operating results are difficult to forecast.
You should evaluate our prospects in light of the risk, expenses and
difficulties commonly encountered by comparable development-stage companies in
the bus transportation industry. We cannot assure you that we will successfully
address such risks and challenges. In addition, even though we have successfully
commenced satisfying our first busing contract, we cannot assure you that our
revenues will increase or that we will become profitable in the future.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Since the date of our incorporation, we have raised an aggregate of $12,500
subsequent to August 31, 2002 year end. These monies were raised from two
private offerings pursuant to Regulation D Rule 506. The remainder of our
financing has been through shareholders advances of $20,000. Future cash flow
financing will also be earned from the operations of the business. We anticipate
that the company will be profitable next year and earn the necessary money to
continue the operation.
For the three month period ended November 30, 2003 our operating activities have
provided cash resources of approximately ($6,259). Our positive operating cash
flow resulted principally due to accounting for our operation on an accrual
accounting basis. Our accounts payable of $12,869 and accrued salaries of
$13,800 represents the major reason why we show positive cash flow from our
operation. We anticipate that our subsidiary will operate near or at break even
for its first full fiscal year.
For the three months ended November 30, 2003 our financing activities were zero
versus the company raising $12,500 during the Comparative Period.
Our investing activities consisted of our subsidiary purchasing a bus.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 11
AMERICAN BUSING CORPORATION
--------------------------------------------------------------------------------
At November 30, 2003 we had cash and cash equivalents of $6,028 and as of
November 30, 2002 we had cash and cash equivalents of $10,089. This cash
combined with the monies raised from our Regulation D rule 506 private
placements of $12,500 in 2002, shareholder advances of $20,000 in 2003 and our
anticipated revenue of $159,195.93 should provide sufficient cash and cash
equivalents to fund our operations for the next 12 months.
If cash generated from operations, our private placements and present cash is
insufficient to meet our long-term liquidity needs, we may need to raise
additional funds or seek other financing arrangements. Additional funding may
not be available on favorable terms or at all. In addition, although there are
no present understandings, commitments, or agreements with respect to any
acquisition of other businesses we may, from time to time, evaluate potential
acquisitions of other busing businesses to enhance our business. In order to
consummate potential acquisitions, we may issue additional securities or need
additional equity or debt financing and any such financing may be dilutive to
existing investors.
ITEM 3. CONTROLS AND PROCEDURES
-------------------------------
(a) Evaluation of Disclosure Controls and Procedures. An evaluation was
performed, under the supervision and with the participation of the Company's
President, Chief Executive Officer, Chief Financial Officer and Director and the
Company's accountant, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on
that evaluation, the Company's principal executive officer and accountant
concluded that the Company's disclosure controls and procedures were effective
as of November 30, 2003.
(b) Changes in Internal Controls. There has been no change in the Company's
internal control over financial reporting during the quarter ended November 30,
2003, that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
(c) We have designed controls and procedures to ensure all material information
is disclosed in our financial statements and our public reports. These controls
included having competent professionals prepare our financial statements and
management reviewing the financial statements with our professionals to ensure
they present fairly our financial position and results of operations. We have
concluded that our controls are sufficient and effective to achieve the above
goal.
PART II. OTHER INFORMATION
--------------------------
ITEM 1. LEGAL PROCEEDINGS
-------------------------
There has been no legal proceedings issued against or commenced by the company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
-------------------------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
---------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 12
AMERICAN BUSING CORPORATION
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ITEM 5. OTHER INFORMATION
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Controls
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We have designed controls and procedures to ensure all material information is
disclosed in our financial statements and our public reports. These controls
included having competent professionals prepare our financial statements and
management reviewing the financial statements with our professionals to ensure
they present fairly our financial position and results of operations. We have
concluded that our controls are sufficient and effective to achieve the above
goal.
Negotiation of purchase of motor sports retailer
------------------------------------------------
Pursuant to a Stock Purchase and Reorganization Agreement (the "Reorganization
--------------
Agreement"), by and among the Company, Edmond Forister, the sole officer,
---------
director and controlling shareholder of the Company, and the three (3)
shareholders of W.W. Cycles Inc., an Ohio corporation that is a retail dealer of
motorcycles, all terrain vehicles, scooters and personal watercraft (the "Cycles
------
Shareholders"), which the Company intends to execute and enter into on or around
------------
December 30, 2003, and certain related agreements delivered in connection with
the Reorganization Agreement (collectively, the "Related Agreements"), (i) the
------------------
Cycles Shareholders shall exchange all 100 issued and outstanding shares of
common stock of Cycles owned by them for 7,850,000 shares of the Company's
Common Stock, (ii) two (2) of the Cycles Shareholders shall purchase an
additional 150,000 shares of Common Stock from IFG Investment Services, Inc., a
Company shareholder (the "Selling Shareholder or IFG") for an aggregate purchase
--------------------------
price of $178,750, (iii) the Company shall repurchase from Mr. Forister,
8,500,000 shares of Common Stock owned by him and repay all outstanding loans
made by Mr. Forister to the Company (in an aggregate approximate amount of
$30,000) for an aggregate consideration of $21,250, (iv) the Company will sell
to Kim Dmuchowski, the sole officer and director of Able, all 100 shares of
common stock of Able issued and outstanding so that Able will no longer be a
subsidiary of the Company, and (v) Mr. Forister, the sole officer and director
of the Company shall resign and be replaced by Russell A. Haehn and Gregory A.
Haehn, two of the Cycles Shareholders (collectively, the "Acquisition Events").
------------------
Immediately following the closing of the Acquisition Events, (i) the Cycles
Shareholders will own approximately 76.74% of the Company's issued and
outstanding shares of Common Stock and (ii) Cycles shall be a wholly-owned
subsidiary of the Company.
It is the intention of the Company, Mr. Forister, the Selling Shareholder and
the Cycles Shareholders to complete the closings of the Acquisition Events as
soon as reasonably possible, but in any event no later than January 15, 2004.
However, the obligations of the parties to consummate the Acquisition Events are
subject to satisfaction of certain conditions precedent. One such condition
precedent to closing under the Reorganization Agreement is compliance with Rule
14f-1 adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which requires the Company
------------
to provide prior written notice to its shareholders of the anticipated change in
identity of the members of its Board of Directors not less than ten (10) days
prior to date upon which the new directors are to take office.
There is no assurance that the parties will enter into the Reorganization and
the Related Agreements, or in the event that they do, that they will consummate
the transactions contemplated by such agreements, because there is no assurance
that the parties will satisfy all of the conditions for closing.
It is contemplated that prior to the closing of the Acquisition Events IFG will
pay less than $.01 per share for the 150,000 shared of Common Stock of the
Company. Under the terms of the Related Agreement covering the purchase of the
Selling Shareholder's shares of Common Stock, the Cycles Shareholders are
purchasing the 150,000 shares of Common Stock for a total purchase price of
$178,750, or $1.19 per share. As a result, the Selling Shareholder is making a
substantial profit on the sale of the 150,000 shares of Common Stock. The
Selling Shareholder has also provided consulting services to the Company with
respect to the Acquisition Events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------
31.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
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Form 10Q-SB Quarter Ending November 30, 2003 Page 13
AMERICAN BUSING CORPORATION
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SIGNATURES
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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.
AMERICAN BUSING CORPORATION.
Dated: January 12, 2004 By: /s/ Edmond Forister
-------------------
Name: Edmond Forister
Title: President, Chief Executive
Officer, and Chief Financial
Officer
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Form 10Q-SB Quarter Ending November 30, 2003 Page 14