QHSLab, Inc. - Quarter Report: 2014 September (Form 10-Q)

AMERICAN BIOGENETIC SCIENCES, INC.
Notes to Unaudited Interim Financial Statements
September 30, 2014
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS Back to Table of Contents

Some of the statements contained in this quarterly report of American Biogenetic Sciences, Inc., a Delaware corporation discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions.

General Background

American Biogenetic Sciences, Inc., a Delaware corporation, is sometimes referred to herein as "we", "us", "our", "Company" and the "Registrant". The Registrant was formed in 1983 for the purpose of researching, developing and marketing cardiovascular and neurobiology products for commercial development and distributing vaccines. The Registrant's products were designed for in vitro and in vivo diagnostic procedures and therapeutic drugs, and its products had been identified for use in the treatment of epilepsy, migraine and mania, neurodegenerative diseases, coronary artery diseases and cancer. The Registrant commenced selling its products during the last quarter of 1997 but did not generate any sufficient revenues from operations to fund its operating expenses.

On September 19, 2002, the Registrant filed a petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of New York. On November 4, 2005, the Bankruptcy Court approved an order authorizing a change in control and provided that the Company, subsequent to the bankruptcy proceeding, is free and clear of all liens, claims and other obligations.

On August 13, 2010, the Registrant's sole officer/director, who was also the principal shareholder, transferred and assigned his controlling stock position to an unrelated third party but remained as the Registrant's sole officer and director. On December 31, 2013, the convertible note to our sole officer/director was formally assigned to our controlling shareholder. See Note 4 to the Notes to Unaudited Interim Financial Statements.

Plan of Operation

We have no present operations or revenues and our current activities are related to seeking new business opportunities, including seeking an acquisition or merger with an operating company. If our management seeks to acquire another business or pursue a new business opportunity, it would have substantial flexibility in identifying and selecting a prospective business. Registrant would not be obligated nor does management intend to seek pre-approval from our shareholders. Under the laws of the State of Delaware, the consent of holders of a majority of the issued and outstanding shares, acting without a shareholders' meeting, can approve an acquisition.

The Registrant is entirely dependent on the judgment of its executive officer/director in connection with pursuing a new business opportunity or a selection process for a target operating company. In evaluating a prospective new business opportunity or an operating company, he would consider, among other factors, the following: (i) costs associated with effecting a transaction; (ii) equity interest in and opportunity to control the prospective candidate; (iii) growth potential of the target business; (iv) experience and skill of management and availability of additional personnel; (v) necessary capital requirements; (vi) the prospective candidate's competitive position; (vii) stage of development of the business opportunity; (viii) the market acceptance of the business, its products or services; (ix) the availability of audited financial statements of the potential business opportunity; and (x) the regulatory environment that may be applicable to any prospective business opportunity.

The foregoing criteria are not intended to be exhaustive and there may be other criteria that management may deem relevant. In connection with an evaluation of a prospective or potential business opportunity, management may be expected to conduct a due diligence review.

Results of Operations during the three-month period ended September 30, 2014 as compared to the three-month period ended September 30, 2013

We have not generated any revenues during the three months ended September 30, 2014 and 2013. We had operating expenses related to general and administrative expenses, being a public company, and interest expense. During the three months ended September 30, 2014, we incurred a net loss of $8,779 due to general and administrative expenses of $5,875 and interest expense of $2,904 compared to a net loss during the three months ended September 30, 2013 of $17,030 mainly due to general and administrative expenses of $14,750 and interest expense of $2,280.

Our general and administrative expenses decreased by $8,875 or 60% during the three months ended September 30, 2014 as compared to the same period in the prior year mainly due to a decrease in officer compensation expenses and office expenses. During the three months ended September 30, 2014, our interest expense was $2,904 as compared to $2,280 in the same period in the prior year and the increase was due to the conversion of advances made to the company into an interest bearing convertible note.

Results of Operations during the nine-month period ended September 30, 2014 as compared to the nine-month period ended September 30, 2013

We have not generated any revenues during the nine months ended September 30, 2014 and 2013. We had operating expenses related to general and administrative expenses, being a public company, and interest expense. During the nine months ended September 30, 2014, we incurred a net loss of $28,896 due to general and administrative expenses of $20,250 and interest expense of $8,646 compared to a net loss during the nine months ended September 30, 2013 of $52,840 mainly due to general and administrative expenses of $46,000 and interest expense of $6,840.

Our general and administrative expenses decreased by $25,750 or 56% during the nine months ended September 30, 2014 as compared to the same period in the prior year mainly due to a decrease in officer compensation expenses and office expenses. During the nine months ended September 30, 2014, our interest expense was $8,646 as compared to $6,840 in the same period in the prior year and the increase was due to the conversion of advances made to the company into an interest bearing convertible note.

Liquidity and Capital Resources

We will use our limited personnel and financial resources in connection with seeking new business opportunities, including seeking an acquisition or merger with an operating company. It may be expected that entering into a new business opportunity or business combination will involve the issuance of a substantial number of restricted shares of common stock. If such additional restricted shares of common stock are issued, our shareholders will experience a dilution in their ownership interest in the Registrant. If a substantial number of restricted shares are issued in connection with a business combination, a change in control may be expected to occur.

On September 30, 2014, we had no assets and had total current liabilities of $401,587 consisting of $7,625 in accounts payable, two convertible notes totaling $331,681, $47,406 in accrued interest and $14,875 in advances from and accruals due to related party.

We financed our operating expenses through advances from our controlling shareholder.