Business Marketing Services Inc - FORM 10-Q

Attached files

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EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - Business Marketing Services Inc	f10q0611ex32i_businessmrkt.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - Business Marketing Services Inc	f10q0611ex31i_businessmrkt.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 333-152017

BUSINESS MARKETING SERVICES, INC.

(Exact name of Registrant as specified in its charter)

Delaware		80-0154787
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

350 Madison Avenue, 8th Floor

New York, NY 10017

(Address of principal executive offices)

(646) 416-6802

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No X

As of August 13, 2011, there were 19,500,000 shares of the registrant’s common stock outstanding.

BUSINESS MARKETING SERVICES, INC.

QUARTERLY REPORT ON FORM 10-Q

June 30, 2011

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated balance sheets at June 30, 2011 (Unaudited)and June 30, 2010	F-1
	Consolidated statements of operations for the Six months ended June 30, 2011 and 2010 and for the period from December 7, 2007 (Inception) through June 30, 2011(Unaudited)	F-2
	Consolidated statements of operations for the Three months ended June 30, 2011 and 2010 (Unaudited)	F-3
	Consolidated statements of cash flows for the Six months ended June 30, 2011 and 2010 (Unaudited)	F-4
	Notes to Consolidated Financial Statements (Unaudited)	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 4.	Controls and Procedures	8

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Submission of Matters to a Vote of Security Holders	9
Item 5.	Other Information	9
Item 6.	Exhibits	9
Signatures		10
Exhibit Index

Business Marketing Services, Inc.

June 30, 2011 and 2010

Index to Consolidated Financial Statements

Contents	Page(s)

Consolidated Balance Sheets at June 30, 2011 (Unaudited) and December 31, 2010	F-2

Consolidated Statements of Operations for the Six Months Ended June 30, 2011 and 2010 and for the Period from December 7, 2007 (Inception) through June 30, 2011 (Unaudited)	F-3

Consolidated Statements of Operations for the Three Months Ended June 30, 2011 and 2010 (Unaudited)	F-4

Consolidated Statement of Equity (Deficit) for the Period from December 7, 2007 (Inception) through June 30, 2011 (Unaudited)	F-5

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010 and for the Period from December 7, 2007 (Inception) through June 30, 2011 (Unaudited)	F-6

Notes to the Consolidated Financial Statements (Unaudited)	F-7

BUSINESS MARKETING SERVICES, INC.
(A development stage company)
Consolidated Balance Sheets

	June 30, 2011			December 31, 2010
	(Unaudited)

ASSETS

CURRENT ASSETS

Cash	$	54,103		$	48

Total Current Assets		54,103			48

WEB-BASED SOFTWARE PLATFORM
Web-based software platform		4,668			3,000
Accumulated amortization		(1,396	)		(750	)

Web-based Software Platform, net		3,272			2,250

TOTAL ASSETS	$	57,375		$	2,298

LIABILITIES AND DEFICIT

CURRENT LIABILITIES

Accrued expenses	$	6,471		$	4,575
Accrued interest		3,535			-
Accounts payable		413			-
Notes payable - stockholder		108,673			81,911
Note payable - related party		101,816			-

Total Current Liabilities		220,908			86,486

TOTAL LIABILITIES		220,908			86,486

DEFICIT

Business Marketing Services Inc. Stockholders' Deficit

Preferred stock: par value $0.0001; 50,000,000 shares authorized;
none issued or outstanding		-			-
Common stock: par value $0.0001; 200,000,000 shares authorized;
19,500,000 shares issued and outstanding		1,950			1,950
Additional paid-in capital		60,605			60,605
Deficit accumulated during the development stage		(247,608	)		(146,743	)
Accumulated other comprehensive income
Foreign currency translation gain		646			-

Total Business Marketing Services Stockholders' Deficit		(184,407	)		(84,188	)

NONCONTROLLING INTEREST IN SUBSIDIARY		20,874			-

Total Deficit		(163,533	)		(84,188	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	57,375		$	2,298

See accompanying notes to the consolidated financial statements

F-1

BUSINESS MARKETING SERVICES, INC.
(A development stage company)
Consolidated Statements of Operations

							For the Period from
	Six Months			Six Months			December 7, 2007
	Ended			Ended			(inception) through
	June 30, 2011			June 30, 2010			June 30, 2011
	(Unaudited)			(Unaudited)			(Unaudited)

Revenue during the development stage	$	41,499		$	-		$	41,499

Operating Expenses:

AMORTIZATION EXPENSE		645			-			1,395
COMPENSATION - OFFICER		100,148			-			100,148
PROFESSIONAL FEES		17,689			78,768			152,645
SELLING EXPENSES		660			-			660
GENERAL AND ADMINISTRATIVE EXPENSES		6,030			6			15,846

Total Operating Expenses		125,172			78,774			270,694

Loss from Operations		(83,673	)		(78,774	)		(229,195	)

Other (Income) Expenses

OTHER INCOME		(116	)		-			(116	)
INTEREST EXPENSE - RELATED PARTY		3,535			-			3,535
INTEREST EXPENSE - STOCKHOLDER		-			406			1,221

Other (Income) Expenses, net		3,419			406			4,640

Loss before income taxes and non-controlling interest		(87,092	)		(79,180	)		(233,835	)

Provision for income taxes		-			-			-

Net loss before non-controlling interest		(87,092	)		(79,180	)		(233,835	)
Net income attributable to non-controlling interest		13,773			-			13,773
		-
Net loss attributable to BMSV stockholders	$	(100,865	)	$	(79,180	)	$	(247,608	)


Net Loss Per Common Share - basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)

Weighted Average Common Shares Outstanding:
- basic and diluted		19,500,000			19,249,710			18,919,800

Comprehensive Loss:
Net loss	$	(100,865	)	$	(79,180	)	$	(247,608	)
Foreign currency translation gain		1,076			-			1,076
Foreign currency translation gain attributable to non-controlling interest		(430	)		-			(430	)

Comprehensive loss attributable to BMSV	$	(100,219	)	$	(79,180	)	$	(246,962	)

See accompanying notes to the consolidated financial statements

F-2

BUSINESS MARKETING SERVICES, INC.
(A development stage company)
Consolidated Statements of Operations


	Three Months			Three Months
	Ended			Ended
	June 30, 2011			June 30, 2010
	(Unaudited)			(Unaudited)

Revenue during the development stage	$	41,499		$	-

Operating Expenses:

AMORTIZATION EXPENSE		395			-
PROFESSIONAL FEES		9,565			32,800
SELLING EXPENSES		660			-
GENERAL AND ADMINISTRATIVE EXPENSES		5,817			-

Total Operating Expenses		16,437			32,800

Income (Loss) from Operations		25,062			(32,800	)

Other (Income) Expenses

OTHER INCOME		(116	)		-
INTEREST EXPENSE - RELATED PARTY		2,573			-
INTEREST EXPENSE - STOCKHOLDER		-			(64	)

Other (Income) Expenses, net		2,457			(64	)

Income (Loss) before income taxes and non-controlling interest		22,605			(32,736	)

Provision for income taxes		-			-

Net income (loss) before non-controlling interest		22,605			(32,736	)
Net income attributable to non-controlling interest		15,325			-

Net income (loss) attributable to BMSV stockholders	$	7,280		$	(32,736	)


Net Income (Loss) Per Common Share - basic and diluted	$	0.00		$	(0.00	)

Weighted Average Common Shares Outstanding:
- basic and diluted		19,500,000			19,298,910

Comprehensive Income (Loss):
Net Income (loss)	$	7,280		$	(32,736	)
Foreign currency translation loss		897			-
Comprehensive income attributable to non-controlling interest		(359	)		-

Comprehensive income (loss) attributable to BMSV	$	7,818		$	(32,736	)

See accompanying notes to the consolidated financial statements

F-3

BUSINESS MARKETING SERVICES, INC.
(A development stage company)
Consolidated Statement of Equity (Deficit)
For the Period from December 7, 2007 (inception) through June 30, 2011
(Unaudited)

										Accumulated Other
							Deficit			Comprehensive income		Total
	Common Stock				Additional		accumulated during the			Foreign Currency		BMSV Stockholders'			Non-		Total
	Shares		Amount		Paid-in Capital		Development Stage			Translation Gain		Equity (Deficit)			controlling Interest		Equity (Deficit)

Shares issued upon formation		15,000,000	$	1,500	$	-	$	-		$	-	$	1,500		$	-	$	1,500

Net Loss								(3,250	)				(3,250	)				(3,250	)


Balance, December 31, 2007		15,000,000		1,500		-		(3,250	)		-		(1,750	)		-		(1,750	)

Capital Contribution						1,000							1,000					1,000

Common shares subscribed on private placement at $0.01 per share in March 2008		4,200,000		420		41,580							42,000					42,000

Net Loss								(32,552	)				(32,552	)				(32,552	)


Balance, December 31, 2008		19,200,000		1,920		42,580		(35,802	)		-		8,698			-		8,698

Interest as in-kind contribution						294							294					294

Capital contribution						2,500							2,500					2,500

Net Loss								(22,796	)				(22,796	)				(22,796	)


Balance, December 31, 2009		19,200,000		1,920		45,374		(58,598	)		-		(11,304	)		-		(11,304	)

Interest as in-kind contribution						927							927					927

Capital contribution						1,334							1,334					1,334

Forgiveness of debt by a stockholder						10,000							10,000					10,000

Common shares issued for acquisition of source code
and other software assets valued at
$0.01 per share on May 31, 2010		300,000		30		2,970							3,000					3,000

Net Loss								(88,145	)				(88,145	)				(88,145	)


Balance, December 31, 2010		19,500,000		1,950		60,605		(146,743	)		-		(84,188	)		-		(84,188	)

Noncontrolling interest - capital contribution																6,671		6,671

Comprehensive income
Net loss								(100,865	)				(100,865	)		13,773		(87,092	)
Foreign currency translational gain											646		646			430		1,076

Total comprehensive loss													(100,219	)		14,203		(86,016	)

Balance, June 30, 2011		19,500,000	$	1,950	$	60,605	$	(247,608	)	$	646	$	(184,407	)	$	20,874	$	(163,533	)

See accompanying notes to the consolidated financial statements

F-4

BUSINESS MARKETING SERVICES, INC.
(A development stage company)
Consolidated Statements of Cash Flows

							For the Period from
	Six Months			Six Months			December 7, 2007
	Ended			Ended			(inception) through
	June 30, 2011			June 30, 2010			June 30, 2011
	(Unaudited)			(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(100,865	)	$	(79,180	)	$	(247,608	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Amortization expense		646			-			1,396
Interest contribution		-			406			1,221
Notes payable issued to a related party as compensation		101,816			-			101,816
Stock issued as compensation		-			-			1,500
Noncontrolling interest in Adcore's current period net income		13,773			-			13,773
Changes in operating assets and liabilities:								-
Accrued expenses		1,896			7,051			6,471
Accrued interest - related party		3,535			-			3,535
Accounts payable		413			-			413

Net cash provided by (used in) operating activities		21,214			(71,723	)		(117,483	)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from notes payable - stockholder		26,762			69,468			118,673
Proceeds from sale of common shares		-			-			42,000
Capital contribution		-			1,334			4,834
Contribution of noncontrolling interest		6,671			-			6,671

Net cash flows provided by financing activities		33,433			70,802			172,178

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(592	)		-			(592	)

NET CHANGE IN CASH		54,055			(921	)		54,103

CASH BALANCE AT BEGINNING OF PERIOD		48			946			-

CASH BALANCE AT END OF PERIOD	$	54,103		$	25		$	54,103

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

NON CASH FINANCING AND INVESTING ACTIVITIES:
Common shares issued for acquisition of source code and related assets	$	-		$	-		$	3,000
Forgiveness of debt by a stockholder	$	-		$	-		$	10,000

See accompanying notes to the consolidated financial statements

F-5

Business Marketing Services, Inc.

(A Development Stage Company)

June 30, 2011 and 2010

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1 - ORGANIZATION

Business Marketing Services, Inc., a development stage company, (“BMSV” or the “Company”), incorporated under the laws of the State of Delaware on December 7, 2007. Initial operations have included organization and incorporation, target market identification, marketing plans, and capital formation. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace. The Company initially intended to publish and distribute 13 month calendars and wall planners for each industry group that the Company targeted and distribute them to members of the targeted industry or profession free of charge. The Company’s initial plan was to generate revenue solely through the sale of advertising space on the wall planners. These wall planners would have been produced upon the sale of all the available advertising space.

Change of control

On January 19, 2010, Hans Pandeya acquired the majority of the issued and outstanding common stock of the Company, from Doug Black, in accordance with a common stock purchase agreement (the “Stock Purchase Agreement”) between Hans Pandeya, Doug Black and the Company. On the Closing Date, pursuant to the terms of the Stock Purchase Agreement, Hans Pandeya acquired fifteen million (15,000,000) shares of the Company’s issued and outstanding common stock representing approximately 78% of the Company’s then issued and outstanding common stock, for a total purchase price of Three Hundred Twenty-Five Thousand dollars ($325,000).

On March 12, 2010, the Company acquired the source code and other software assets of gTrade, a company organized under the laws of Australia (“gTrade”) from Emil Koutanov, Guy Havenstein, and Tony Fle-Danijelovich (the “Sellers”) pursuant to the Asset Transfer Agreement (the “Asset Transfer Agreement”) between the Company and the Sellers. The Company intends to use the acquired source code to develop new marketing services for the Company.

Formation of majority-owned subsidiary

On February 3, 2011, the Company entered into a Shareholders, Company Formation and Capital Increase Agreement between Smartlaunch A/S (“SL”), Rainmaking Holding 1 ApS (“RM”), Perfect Best International Ltd (“PBI”), and Hans Pandeya and formed Adcore, Aps (“Adcore”) under the laws of the kingdom of Denmark. Pursuant to the terms and conditions of the Agreement, the Company, jointly with other parties, formed the Company under the laws of Denmark as a jointly owned company with a nominal share capital of Denmark Krone (“DKK”) 81,000, of which 55.56% ownership belongs to Business Marketing Services, Inc. Immediately after formation of Adore, Smartlaunch A/S received 9,000 new shares in Adcore for contributing the Software. Following SL’s subscription for shares, the ownership is as follows:

Shareholder	Nominal Shareholding		Percentage
RM		18,000		20	%
SL		9,000		10	%
PBI		18,000		20	%
BMSV		45,000		50	%
Total:		90,000		100	%

BMSV will assist Adcore in developing its business in the U.S. and India and be responsible for innovation and product development of Adcore; whereby, Adcore shall pay 50% of its net revenues to BMSV in return on a quarterly basis. For the period from February 3, 2011 (formation) through June 30, 2011, BMSV did not assist Adcore in developing its business in the U.S. and India and be responsible for innovation and product development.

BMSV is also granted a call option to buy 9,000 shares from each of RM and PBI corresponding to 50% of RM’s and PBI’s ownerships at a nominal price if the following milestones are not achieved:

-	Turnover 2012 minimum DKK five (5) million. The share call option based in this milestone must be executed before April 1, 2013.

-	“SL Free” software completed by June 1, 2011. The share call option based in this milestone must be executed before June 20, 2011.

On February 25, 2011, BMSV bought 9,000 shares of Adcore from Smartlaunch Systems A/S for SEK 654,648 (equivalent to $101,816).

F-6

NOTE 2 – SUMMARY OF SIGNIFICANT ACCONTING POLICIES

Basis of presentation – unaudited interim consolidated financial information

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2010 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2011.

Principle of consolidation

The consolidated financial statements include all accounts of the Company as of June 30, 2011 and 2010 and for the interim periods then ended and all accounts of Adcore as of June 30, 2011 and for the period from February 3, 2011 (inception) through June 30, 2011. All inter-company balances and transactions have been eliminated.

Development stage company

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. Although the Company has recognized some nominal amount of revenue since inception, the Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period.

The Company’s significant estimates include the fair value of financial instruments; the carrying value, recoverability and impairment, if any, of long-lived assets, including the values assigned to and the estimated useful lives of software platform; income taxes provision and valuation allowance of deferred tax assets; its subsidiary’s functional currency; and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

F-7

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

It is not however, practical to determine the fair value of advances from stockholders due to their related party nature.

Carrying value, recoverability and impairment of long-lived assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes software platform is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

Management periodically reviews the recoverability of software platform. Management takes into consideration various information including, but not limited to, results of business activities conducted to date, estimated future prices and reports and opinions of outside consultants. When it is determined that a project will be abandoned or its carrying value has been impaired, a provision is made for any expected loss on the project.

The impairment charges, if any, is included in operating expenses in the accompanying statements of operations.

Cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Software platform

Software platform is stated at cost less accumulated amortization. Software platform is the source code and other software assets of gTrade the Company acquired for $3,000 on March 12, 2010. As required by section 350-40-25-2 of the FASB Accounting Standards Codification the Company capitalizes costs incurred during the application development stage of software used to upgrade and enhance the function of the software and amortizes these costs over its estimated useful life of three (3) years.

Immediately after formation of Adcore ApS – a 60% owned subsidiary of the Company, Smartlaunch A/S was issued 9,000 new shares of Adcore ApS against contributing the Software for the total value of $1,668.

F-8

Related parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Noncontrolling interest

The Company follows paragraph 810-10-65-1 of the FASB Accounting Standards Codification to report the non-controlling interest in Adcore, its majority owned subsidiary in the consolidated statements of balance sheets within the equity section, separately from the Company’s stockholders’ equity. Non-controlling interest represents the non-controlling interest holder’s proportionate share of the equity of the Company’s majority-owned subsidiary, Adcore. Non-controlling interest is adjusted for the non-controlling interest holder’s proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.

Revenue recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Income taxes

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

F-9

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Foreign currency transactions

The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency or Denmark Krone, the Company’s Denmark operating subsidiary's functional currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate.

Foreign currency translation

The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.

The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of income and comprehensive income (loss).

Based on an assessment of the factors discussed above, the management of the Company determined the relevant subsidiary’s local currency to be the functional currency for its foreign subsidiary.

F-10

The financial records of the Company's Denmark operating subsidiary are maintained in their local currency, the Danish Krone (“DKK”), which are the functional currency. Assets and liabilities are translated from the local currencies into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.

Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Translation of amounts from DKK into U.S. dollars has been made at the following exchange rates for the respective periods:

	June 30, 2011		March 31, 2011

Balance sheet		5.1824		5.2910

Statement of operations and comprehensive income (loss)		5.3190		5.4555

The foreign currency translation gain (loss) was $646 and the effect of exchange rate changes on cash flows were ($592) for the interim period ended June 30, 2011, respectively.

Comprehensive income (loss)

The Company has applied section 220-10-45 of the FASB Accounting Standards Codification. This statement establishes rules for the reporting of comprehensive income and its components. Comprehensive income (loss), for the Company, consists of net loss and foreign currency translation adjustments and is presented in the Company’s consolidated statements of operations and comprehensive income (loss) and stockholders’ equity.

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

There were no potentially dilutive common shares outstanding for the interim period ended June 30, 2011, or 2010.

Cash flows reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Recently issued accounting pronouncements

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements”, which provides amendments to Subtopic 820-10 that require new disclosures as follows:

1.	Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers.

Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).

F-11

This Update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows:

Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.

Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.

This Update also includes conforming amendments to the guidance on employers' disclosures about postretirement benefit plan assets (Subtopic 715-20). The conforming amendments to Subtopic 715-20 change the terminology from major categories of assets to classes of assets and provide a cross reference to the guidance in Subtopic 820-10 on how to determine appropriate classes to present fair value disclosures. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

NOTE 3 – GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company had a deficit accumulated during the development stage of $247,608 at June 30, 2011, and a net loss of $100,865 for the interim period then ended.

While the Company is attempting to commence operations and produce sufficient revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – RELATED PARTY TRANSACTIONS

Notes payable – stockholder

From January 22, 2009 through September 8, 2009, the Company borrowed $12,500 from a related party. All notes were demand notes carrying a 3% interest rate. As of December 31, 2009, the principal balance due on the demand notes was $10,000. $2,500 out of notes payable was converted to capital contribution and $294 in interest was accrued and recorded as in-kind contribution. On January 15, 2010, the balance of notes in the amount of $10,000 was forgiven.

From February 28, 2010 through December 31, 2010, the Company borrowed $81,911 in aggregate from its majority stockholder. Those notes are due on demand with imputed interest at 3% per annum. The Company imputed $927 in interest and recorded this amount as a capital contribution for the twelve months ended December 31, 2010.

From February 3, 2011 through June 30, 2011, the Company borrowed $26,762 from the majority shareholder. All notes are due on demand and now with no interest.

F-12

As of June 30, 2011, the principal balance due on the demand notes was $108,673.

Notes payable – related party

On February 25, 2011, the Company bought 9,000 shares of the newly formed Adcore Aps from Smartlaunch Systems A/S, an entity controlled by the President and major stockholder of the Company for SEK 654,648 (equivalent to $101,816) with a promissory note plus interest, payable 360 days from the date of the issuance. The Company recorded $1,668 as a capital contribution to Adcore and $100,148 as compensation – officer at the stockholder’s basis of par. The Note bears interest at 10% per annum (computed on the basis of a 360-day year), which is payable bi-annually in arrears in two (2) equal installments on the dates 180 days from the date of the issuance and 360 days from the date of the issuance.

As of June 30, 2011, the principal balance due on the note was $101,816 and interest of $3,535 was accrued.

Free office space

The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

NOTE 7 - STOCKHOLDERS’ DEFICIT

Preferred stock

Preferred stock includes 50,000,000 shares authorized at a par value of $0.0001, none of which are issued or outstanding.

Common stock

Common Stock includes 200,000,000 shares authorized at a par value of $0.0001, 15,000,000 of which have been issued for the amount of $1,500 on December 7, 2007 in acceptance of the incorporation expenses for the Company.

During March 2008, the Company sold 4,200,000 shares of common stock at $0.01 per share or $42,000 in aggregate.

On May 31, 2010, the Company issued 300,000 shares of its common stock in connection with March 12, 2010 purchase of source code and other software assets, valued at $0.01 per share or $3,000 in aggregate.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed.

F-13

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

Forward Looking Statements

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “will” and words and terms of similar substance used in connection with any discussion of future events, operating or financial performance, financing sources, product development, capital requirements, market growth and the like, identify forward-looking statements. Forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors which could cause the actual results to differ materially from the forward-looking statement. These forward-looking statements include, among others:

projections of revenues and other financial items;

statements of strategies and objectives for future operations;

statements concerning proposed applications or services;

statements regarding future economic conditions, performance or business prospects;

statements regarding competitors or competitive actions; and

statements of assumptions underlying any of the foregoing.

All forward-looking statements are present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks related to the Company’s business discussed under “Risk Factors” of this Quarterly Report on Form 10-Q, among others, could cause actual results to differ materially from those described in the forward-looking statements. Such risks include, among others: the competitive environment; unexpected technical and marketing difficulties inherent in development efforts; the potential need for changes in our long-term strategy in response to future developments; as well as potential changes in government regulations and laws, both of which could adversely affect the economics of the products we plan to offer; and rapid changes in the technology industry.

The Company makes no representation as to whether any projected or estimated information or results contained in any forward-looking statements will be obtained or achieved. Shareholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. The Company is under no obligation, and it expressly disclaims any obligation, to update or alter any forward-looking statements after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise.

Overview

Historically, Business Marketing Services, Inc.’s (“BMSV” or the “Company”) plan of business was to publish and distribute 13-month calendars that would be marketed to businesses of all industries to hand out to their customer’s as a promotional tool and to publish and distribute industry and profession specific wall planners, initially implementing its business plan in Wenatchee and greater Seattle in the State of Washington.

Recent Developments and Changes to Business Plan

On January 19, 2010, Hans Pandeya, our current CEO and director, acquired the majority of the issued and outstanding common stock of the Company, from Doug Black, in accordance with a common stock purchase agreement (the “Stock Purchase Agreement”) between Hans Pandeya, Doug Black and the Company. On the Closing Date, pursuant to the terms of the Stock Purchase Agreement, Hans Pandeya acquired fifteen million (15,000,000) shares of the Company’s issued and outstanding common stock representing approximately 77% of the Company’s issued and outstanding common stock, for a total purchase price of Three Hundred Twenty-Five Thousand dollars ($325,000).

On February 5, 2010, we entered into a Consulting Agreement with TAG Strategic. The agreement calls for TAG Strategic to perform general business advisory services. The term of the agreement is for a twelve month period. The compensation for this agreement is in the form of monthly payments of $20,000.

On March 12, 2010, the Company acquired source code and other software assets of gTrade, a company organized under the laws of Australia (“gTrade”) from the Emil Koutanov, Guy Havenstein, and Tony Fle-Danijelovich (the “Sellers”) pursuant to the Asset Transfer Agreement (the “Asset Transfer Agreement”) between the Company and the Sellers. On the Closing Date, pursuant to the terms of the Asset Transfer Agreement, the Company delivered a promissory note in the principal amount of $300,000 (the “Note”), with a maturity date of May 31, 2010. The Note was to be paid, at our option, in cash or by delivery of the number of shares of Company’s common stock based on the daily average closing price of the Company’s common stock from the Closing Date until the date of issuance of the stock. On May 31, 2010 the Note was satisfied by the issuance of 300,000 shares of our common stock at an agreed value of $300,000. On March 12, 2010, we entered into a Consulting Agreement with the Sellers. The agreement calls for the Sellers to perform software technical advisory services at the times and the locations specified by us. The term of the agreement is for a twelve month period. The compensation for this agreement is in the form of cash compensation of AUD 100 plus GST per hour, inclusive of any and all applicable taxes and benefits, including payroll tax and superannuation, in Australia and other jurisdictions. We intend to use the acquired source code to develop new marketing services for businesses.

On February 3, 2011, the Company had entered into Shareholders-, Company Formation and Capital Increase Agreement between Smartlaunch A/S, Rainmaking Holding 1 ApS, Perfect Best International Ltd, and Hans Pandeya. whereby pursuant to the terms and conditions of the Agreement, the Company jointly with other parties should buy or form the Company under the laws of Denmark as a jointly owned company with a nominal share capital of DKK 81,000, of which 55.56% ownership belongs to Business Marketing Services, Inc. Immediately after formation of the Company, Smartlaunch A/S shall subscribe for 9,000 new shares in the Company against injecting the Software as a substance capital injection. Following SL’s subscription for shares, the ownership shall be as follows:

Shareholder	Nominal Shareholding		Percentage
RM		18,000		20	%
SL		9,000		10	%
PBI		18,000		20	%
BMSV		45,000		50	%
Total:		90,000		100	%

BMSV will assist the newly formed Company in developing the business in the US and India and be responsible for innovation and product development of the Company; whereby, the Company shall pay 50% of the Company’s net revenues in return on a quarterly basis.

BMSV is also granted a call option to buy 9,000 shares from each of RM and PBI corresponding to 50% of RM’s and PBI’s ownerships at nominal price if the following milestones are not achieved:

- Turnover 2012 minimum DKK five (5) million. The share call option based in this milestone must be executed before April 1, 2013.

- “SL Free” software completed by June 1, 2011. The share call option based in this milestone must be executed before June 20, 2011.

On February 25, 2011, BMSV bought 9,000 shares of the newly formed Company –Adcore Aps from Smartlaunch Systems A/S for SEK 654,648.

We might alter our plans if we do not succeed in raising funds to start the projects or if we do not succeed in obtaining license agreements that are essential for the business we envisage. We currently have a team of 5 people working part-time with business development, legal and accounting work in the US and 3 people working part-time in Australia. In addition, we are working with researchers and developers in Norway, Denmark, Israel, UK, the US and Egypt to design services and develop our business model.

An overview of our plans follows here.

Fundamental view

We believe that a user's social experience in interactions with users with similar interests and tastes are a key factor that drives the emergence of networks, and that system designs that enhance this experience and harness the capabilities of a network of like-minded users, add significant value to a business model.

Each of our plans is based on this fundamental principal. All systems we intend to create are user-centric and identify clusters of similar users in some respect to create optimum solutions.

Transaction module plan

We are planning to use gTrade’s technology to develop marketing services for businesses and to develop marketplaces for intellectual property rights and copyright where consumers and investors can invest in and transact with businesses. An example is a marketplace for mobile apps where consumers and investors can invest in and transact with creators and developers to realize their creations. Another example is a marketplace for digital entertainment that acts as a link between traditional record companies, the publishers and artists on one side and the music fans on the other. Music fans are the consumers or investors in this example.

Recommendation module plan

We are creating partnerships to access state-of-the-art technology for matching consumers and investors with businesses to transact in our marketplaces with minimum information asymmetry and optimum allocation of financial resources. For example, we intend to use the technology to design systems that match consumers of digital entertainment who most likely will invest in and transact with content providers, rights holders and artists to create maximum value for all parties.

Distribution module plan

Intellectual property rights laws and copyright laws are difficult to enforce on the Internet. We believe that the main reason for this is that technology used today for transactions on the Internet is not up to date and in fact is so outdated that efficient enforcement of intellectual property rights laws and copyright laws is not possible. As outdated technology is the de-facto standard, it prevents outdated architectures from being replaced. This problem provides impetus to new policies being introduced to increase surveillance of users and strike against infringement of property rights, which in turn raises privacy issues. We believe that we can create value for businesses by making enforcement of property rights more efficient and by lowering distribution costs to a minimum with new technology. We believe that we can create value for consumers by lowering costs and improving the quality of service.

We are creating partnerships to access state-of-the-art technology for storage and delivery of digital content to consumers with maximum efficiency. As mentioned above, technologies and architectures that are widely used are the de-facto standard and thus difficult to replace with systems that are superior from a technical point of view. We intend to make certain strategic acquisitions to facilitate the introduction of our technologies.

Rewards module plan

We intend to create systems to identify networks of like-minded people within certain communities, for example, within a file-sharing community, and encourage sharing of resources to create a cooperative environment by rewarding them. When users contribute their unused resources to a common pool, the opportunity to monetize idle capacity is created. Revenues created in this cooperative environment can then be passed on to the users in the form of credits. Rewarding users with credits for sharing resources is similar to traditional rewards programs such as frequent flier programs. A user in a file-sharing community thus becomes a service provider with our technology and earns an income from his file-sharing activities, which he can spend on his consumption of digital content.

Strategic acquisitions plan

As mentioned earlier, we intend to make certain strategic acquisitions to facilitate the introduction of technologies we will use. However, a successful acquisition and a successful introduction of next generation file-sharing technology for storage and distribution of digital content will not necessarily give intended results as licensing agreements for content delivered with next generation file-sharing technology are not yet available from many content providers and rights-holders.

While our plans are broad, they are modular and inter-independent to reduce our business risks. A failure in a module, for example, failure in our plan to make certain acquisitions to facilitate the introduction of the technologies will not affect the transaction module plan. While the business activities in the different modules reinforce each other to increase the overall business's profitability and sustainability, the modules are not a pre-requisite for each others' existence or essential for the overall business.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section should be read in conjunction with the accompanying unaudited interim financial statements which have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is substantially dependent on the successful execution of our strategic plan and otherwise discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and in Note 1, “Liquidity” to our interim financial statements filed as part of this Quarterly Report, on the timeline contemplated by our plans and our ability to obtain additional financing. The uncertainty of successful execution of our plans, among other factors, raises substantial doubt as to our ability to continue as a going concern. The accompanying unaudited interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

The following table sets forth certain line items in our consolidated statement of operations as a percentage of total revenues for the periods indicate:

BUSINESS MARKETING SERVICES, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
							For the Period from
	Six Months			Six Months			12/7/2007
	Ended			Ended			(inception) through
	6/30/2011			6/30/2010			6/30/2011
	(Unaudited)			(Unaudited)			(Unaudited)

Revenue	$	41,499		$	-		$	41,499

Operating Expenses:

AMORTIZATION EXPENSE		645			-			1,395
COMPENSATION-OFFICER		100,148			-			100,148
PROFESSIONAL FEES		17,689			78,768			152,645
SELLING EXPENSES		660						660
GENERAL AND ADMINISTRATIVE EXPENSES		6,030			6			15,846

Total Operating Expenses		125,172			78.774			270,694

Loss from Operations		-83,673			-78,774			-229,195

Other (Income) Expenses

INTEREST EXPENSE - RELATED PARTY		3,535			-			3,535
INTEREST EXPENSE - STOCKHOLDER		-			406			1,221

Total Other (Income) Expenses, Net		3,535			406			4,756

Loss before income taxes and non-controlling interest		-87,092			-79,180			-233,835

Provision for income taxes		-			-			-

Net loss before non-controlling interest		-87,092			-79,180			-233,835
Net loss attributable to non-controlling interest		13,773			-			-13,773

Net loss	$	(100,865	)	$	(79,180	)	$	(247,608	)

Revenues

The Company generated $41,499 revenues for the three and six months ended June 30, 2011 from its newly form subsidiary. The Company did not generate any revenue for the three and six months June 30, 2010. The Company is in the development stage and has recently changed its business plan.

Compensation Officer

The Company incurred $100,148 of officer compensation for the six month ended June 30, 2011. This was the result of the Smartlaunch transaction. In 2010 the Company had no officer compensation.

Professional Fees

The Company incurred $17,689 in professional fees for the six months ended June 30, 2011, as compared to $78,768 for the same period in 2010. The decrease in professional fees was primarily due to the change in the Company’s business plan. In 2010 the Company used various consultants to launch its old business plan.

General and Administrative Expenses

The company incurred general and administrative expenses of $6,030 for the period ended June 30, 2011, as compared to $6 for the same period in 2010. The increase was due to the Company efforts to change its business plan. The Company is in the process of implementing its new business plan and expects general and administrative expenses to increase in the future.

Interest Expense

The Company’s interest expense was $3,535 for the six ended June 30, 2011, as compared to $406 for the same period in 2010. The increase was related to the Company issuing a Promissory Note to Smartlaunch Systems A/S for SIK 654,648 plus interest, payable 360 days from the date of the issuance. The Note bears annual interest of 10% (computed on the basis of a 360-day year), which is payable bi-annually in arrears in equal installments on the dates 180 days from the date of the issuance and 360 days from the date of the issuance.

Liquidity and Capital Resources

As of June 30, 2011 we had $54,103 in cash. While we are reviewing our operations and business plan to determine the most effective way to produce revenues, our cash position cannot support our daily operations. Any shortfall is currently funded by our majority shareholder and Chief Executive officer, Hans Pandeya. Management intends to raise additional funds by way of a public or private offering. Management believes that the recent change in our business plan will generate revenues and provide the opportunity for us to continue as a going concern. While we believe in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement its business plan and generate revenues.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

The following table summarizes the Company’s Consolidated Statement of Cash Flows:

	Six Months Ended June 30,
Net cash provided (used) by operating activities	2011		2010

Operating Activities		21,214		(71,723	)
Investing Activities		-		-
Financing Activities		33,433		70,802

Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements contained in this Quarterly Report on Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Cash and Cash Equivalents

The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents.

Basis of Accounting

The Company's financial statements are prepared in accordance with U.S. generally accepted accounting principles.

Income Taxes

The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when in the opinion of management; it is more likely than not that some portion or all of the deferred tax assets will not be realized. At this time, the Company has set up an allowance for deferred taxes as there is no company history to indicate the usage of deferred tax assets and liabilities.

Fair Value of Financial Instruments

The Company's financial instruments may include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and liabilities to banks and shareholders. The carrying amount of long-term debt to banks approximates fair value based on interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities. The carrying amounts of other financial instruments approximate their fair value because of short-term maturities.

Concentrations of Credit Risk

Financial instruments which potentially expose The Company to concentrations of credit risk consist principally of operating demand deposit accounts. The Company's policy is to place its operating demand deposit accounts with high credit quality financial institutions. At this time The Company has no deposits that are at risk.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2010. Based on this evaluation, our principal executive officer and principal financial officers have concluded that our disclosure controls and procedures are ineffective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the unaudited interim financial statements included in this quarterly report reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following material weaknesses which have caused management to conclude that, as of September 30, 2010, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the unaudited interim financial statements included herein reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

Remediation of Material Weaknesses

We have attempted to remediate the material weaknesses in our disclosure controls and procedures identified above by hiring a full-time CFO, with SEC reporting experience, in the future when funding are available and by working with our independent registered public accounting firm and refining our internal procedures. To date, we have not been able to hire a full-time CFO due to our limited funding.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

An investment in the Company’s common stock is speculative and involves a high degree of risk. You should carefully consider the risks described in the Company’s annual report From 10-K filed on April 15, 2011 and other information in this report before purchasing any shares of the Company’s common stock. Such factors may have a significant impact on its business, operating results, liquidity and financial condition. As a result of the identified risk factors, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to the company, or that are currently considered to be immaterial, may also impact the Company’s business, operating results, liquidity and financial condition. If any such risks occur, the Company’s business, operating results, liquidity and financial condition could be materially affected in an adverse manner. In addition, the trading price of the Company’s stock, when and if a market develops for the Company’s stock, could decline.

Item 2. Unregistered Sales of Equity Securities And Use Of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission Of Matters To A Vote Of Security Holders.

None

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.		Description

3.1	(1)	Certificate of Incorporation

3.2	(1)	Bylaws

3.3	(1)	Amended Certificate of Incorporation

31.1	*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32.1	*	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 13500

____________________

(1)

Previously filed as an exhibit to the Company’s Registration Statement on Form S-1 dated December 7, 2007, and incorporated herein by reference.

Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BUSINESS MAERKETING SERVICES, INC.

Date: August 22, 2011		/s/ Hans Pandeya
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 22, 2011		/s/ Hans Pandeya
		Principal Financial and Accounting Officer

Business Marketing Services Inc - FORM 10-Q - August 22, 2011

Attached files

Business Marketing Services Inc Reports