UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q /A

(Amendment number two)

 

X

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

 

For the quarterly period ended June 30, 2012.

Commission file number: 0-27182

                                                                                 STATE OF INCORPORATION:  Pennsylvania    IRS Tax ID Number:  25-1624305 

ACCREDITED BUSINESS CONSOLIDATORS CORP .
(Exact name of registrant as specified in its charter)
 

Accredited Business Consolidators Corp.
c/o Accredited Suppliers Nicaragua S.A.
De La Estatua de Montoya
1 Cuadra al Sur
Casa Esquinera
Apartado PA-228
Managua 10000
Nicaragua

(Address of principal executive offices)

1-267-864-7737 or +505-8796-8888
(Registrant's telephone number, including area code)

196 West Ashland
Doylestown, PA  18901
(Former Name or Former Address, if changed since last report)


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) or 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 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐.

 

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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

 ☐

Accelerated filer

 ☐

 

 

 

 

Non-accelerated filer

 ☐

Smaller reporting company

 X

 

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 436,399, 566 common shares as of July 31, 2012.

Note: The aggregate market value of the common stock held by all persons using the price of $.0018, which is the price at the close on June 29, 2012, is $785,519. As of June 30, 2012, there were 436,399,566 common shares outstanding with a par value of .0001. There are 500,000,000 preferred shares outstanding belonging to My Pleasure Ltd., a United Kingdom company, which share the same voting rights as the common stock except that their voting power will never be less than 51%.  Therefore, the common stock represents slightly less than half of the Company's control.  

FORWARD LOOKING STATEMENTS AND RISK FACTORS

Certain statements contained in this Form 10-Q filed by Accredited Business Consolidators Corp. ("ACDU" or "Company") constitute "statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements, identified by words such as "will," "may," "expect," "believe," "anticipate," "intend," "could," "should," "expect," "estimate," "plan" and similar expressions, relate to or involve the current views of management with respect to future expectations, objectives and events and are subject to substantial risks, uncertainties and other factors beyond management's control that may cause actual results to be materially different from any such forward-looking statements. Such risks and uncertainties include those set forth in this document and others made by or on behalf of the Company in the future, including but not limited to, the Company's limited operating history, its need for additional capital or financing, its ability or inability to produce and market products and services, its ability to make a profit in the future, its dependence on a limited number of customers and key personnel, its dependence on certain industries, its ability to locate and consummate business opportunities that would appear to be in the best interests of the shareholders, its ability to implement strategies to develop its business in emerging markets, competition from other or similar companies or businesses, and, general economic conditions. Any forward-looking statements in this document and any subsequent Company document must be evaluated in light of these and other important risk factors. The Company does not intend to update any forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.

 

 

 

T ABLE OF CONTENTS

 

 

 

 

PART I- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

 

 

BALANCE SHEET At June 30, 2012

 

 

2

STATEMENT OF OPERATIONS June 30, 2012

 

3

CASH FLOW STATEMENT June 30, 2012

 

4

STATEMENT OF STOCKHOLDERS' EQUITY Balance as June 30, 2012

 

5

NOTES TO FINANCIAL STATEMENTS

 

6

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

10

ITEM 3. Quantitive and Qualitive Disclosures About Market Risk

 

16

ITEM 4. Controls and Procedures

 

 

17

 PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

 

 

17

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

17

ITEM 3. Defaults Upon Senior Securities

 

 

18

ITEM 4. Mine Safety Disclosures

 

 

18

ITEM 5. Other Information

 

 

18

ITEM 6. Exhibits and Reports on Form 8-K

 

19

Exhibits 

 

 

 

Exhibits 31.1

 

 

20

Exhibits 32.1

 

 

21

 

 

 

 

 

 

 

 

 

1

 


ITEM 1: Financial Statements

 ACCREDITED BUSINESS CONSOLIDATORS CORP.
(A BUSINESS DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)

                                                       As of June 30    As of December 31      As of June 30
                                                        2012             2011                   2011       

ASSETS:
Current assets:
    Cash and Bank Accounts:                             $ 14078.09          $   1468.72         $  3466.82
          
Stocks and Investments:                    
    Industrial Supply Company LLC (25%)                 $  2500.00          $   2500.00         $  2500.00
    Hiland Terrace Corp. (43639950 common
      and 1000000 preferred shares)                        4200.00              4200.00            4200.00
    3-101-53218 S.A. (25%)                                 2000.00              2000.00            2000.00
    Southeast Banking Corp. (77634 common)                 7763.40              7763.40            7763.40
    Soluciones Faciles S.A. (25%)                          5000.00              5000.00            5000.00
    IAHL Corporation (126012 common shares)               28507.72             28507.72           28507.72
    IAHL Corporation (41488 common shares)                     ---             10372.00           10372.00
    James Monroe Capital Cp. (1000000 common)            
      (Purchased at $200. Revalued for impairment
       nunc pro tunc to December 31, 2011)                  100.00               100.00             200.00
    Diversified Land Management Gp. (4363996 common sh.)    225.00               225.00
    Averion International Corp. (395.78 preferred sh.)     1601.00              1601.00            1601.00
    Direct Markets Holdings Corp. (4150 common sh.)         
      (Purchased at $22325.  Revalued for impairment
       nunc pro turn to December 31, 2011)                 1826.00              1826.00           22325.00
    Hotels & Stuff Inc.                                    2000.00                  ---                ---
    A Clean Slate Inc. (15300672 common shares)           12028.44                  ---                ---
    Beacon Redevelopment Ind. Cp. (2985199 common sh.)     8376.46                  ---                ---
   
Treasury Stock:
    Accredited Business Consolidators Corp. (888,681
       common shares)                                      5560.77              5560.77             5560.77

Loan Receivables:
    Industrial Supply Co. LLC                              2737.59              2737.59             2737.59
    Richwood Eco Ventures, Inc.                           35612.50             35612.50            35612.50
    Telecom Tools Inc.                                     2112.00              2112.00             2112.00
    Accredited Suppliers Corp.                             2713.95              2713.95             2713.95
    Domain Management Inc.                                 2185.41              2185.41             1966.40            
    Identifier Inc.                                         325.11               325.11               83.09
    Italian Oven Financial Inc.                             137.50               137.50              137.50
    Italian Oven Travel & Entertainment Corp.               137.50               137.50              137.50
    Italian Oven International                              137.50               137.50              137.50
    Italian Oven Intellectual Property Corp.                137.50               137.50              137.50
    Italian Oven Technologies Inc.                          137.50               137.50              137.50
    Accredited Hospitality Group, Inc.                      137.50               137.50              137.50
    Accredited Consolidators Europe                        1784.75              1784.75             1784.75
    Calichi Sino Inc.                                      1040.00              1040.00             1040.00

TOTAL ASSETS:                                           $145103.19           $120460.94          $142596.99      

LIABILITIES:
    Loans from shareholders (My Pleasure Ltd.)          $191676.00           $191676.00          $191676.00
    Interest on loans from shareholders                   55037.80             55037.80            35870.20            
    Loan from Drub Howlety Inc.                            8000.00                  ---                 ---

TOTAL LIABILITIES:                                      $254713.80           $246,713.80         $227546.20

CAPITAL:
Stockholders' Equity:
    Accumulated deficit                                $(239011.61)         $(255653.88)        $(234949.21)
    Deficit due to unrealized loss from impaired
      value of Direct Markets Holdings stock             (20499.00)           (20499.00)                ---
    Deficit due to unrealized loss from impaired
      value of James Monroe Capital Corp. stock            (100.00)             (100.00)                ---
    Preferred stock, 500,000,000 authorized, issued
      and outstanding to My Pleasure Ltd., par .0001      50000.00             50000.00            50000.00
    Common stock, 450,000,000 authorized, 
      436,399,566 issued and outstanding, par .0001       43640.00             43640.00            43640.00
    Adjustment to shareholder equity (caused by par
      value of previously issued stock)                  (43640.00)           (43640.00)          (43640.00)
    Additional paid in capital by My Pleasure Ltd.       100000.00            100000.00           100000.00

TOTAL CAPITAL:                                         $(109610.61)         $(126252.88)         $(84949.21)   

LIABILITIES AND STOCKHOLDER EQUITY:                    $ 145103.19           $120460.94          $142596.99


 The accompanying notes are an integral part of the financial statements.

 

2

 


ACCREDITED BUSINESS CONSOLIDATORS CORP.
(A BUSINESS DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)

                                               Three Months         Three Months       July 18, 1998
                                               ended June 30        ended June 30      (emerge from bankruptcy
                                               2012                 2011               to June 30, 2012

REVENUE:

Commissions                                    $      49.83         $     13.31         $     277.09
Dividends                                               .20                 .03                 2.23
Income from Sale of Investments                    32342.01                                135179.03      
Other Income                                                                                     .14
Interest on Loans Issued                                                   2.50              4415.56
                                               ---------------------------------------------------------------------
TOTAL INCOME:                                  $   32392.04         $     15.84         $  139874.05
                                               ---------------------------------------------------------------------

COST OF GOODS SOLD:

Cost of Short Term Investments Sold:           $   10372.00         $                   $  133720.34
                                               ---------------------------------------------------------------------
EXPENSES:

Expense Relating to Investment Activities      $                    $                   $    3837.94
Miscellaneous Organizational Expenses                                                       39633.00
Consulting Fees                                                                             60264.00
Legal Expenses                                                                              48800.00
Miscellaneous Business Expenses                                                               222.00
Interest on Loans                                                                           55037.80
Bank Fees                                            119.85              164.85              3212.14
Executive Compensation                                                                        200.00
Rents/Virtual Office Services                        309.18              317.83              3824.11
Insurance                                                                                     109.74
Subscriptions to Travel Database Services            278.10              278.10              1879.90
Internet/Domain Names                                482.15             1636.07              2677.71
Advertising/Public Relations                                                                13892.43
Communications/Telephone                             500.00                                  1718.45
Supplies                                                                                        3.00
Commissions Paid (incl. brokerage)                                                            820.99
Charitable Contributions                                                                      500.00
Accounting Fees/Auditing Expenses                                       2250.00              6950.00
Administrative Expenses                              198.00              267.96              1465.17
Software and Data Licenses                                                                    116.94
Impairment Charge -- Direct Markets Holding                                                 20499.00
Impairment Charge -- James Monroe Capital                                                     100.00
                                               ---------------------------------------------------------------------
TOTAL EXPENSES:                                $    1887.28         $   4914.81         $  265764.32
                                               ---------------------------------------------------------------------
PROFIT (OR LOSS):                              $   20132.76         $  (4898.97)        $ (259610.61)
                                               ---------------------------------------------------------------------
                                               ---------------------------------------------------------------------

TOTAL NUMBER OF OUTSTANDING SHARES:

Preferred Shares                               500,000,000          500,000,000
Common Shares                                  436,399,566          436,399,566

PROFIT (OR LOSS) PER SHARE:                    $        .0000215    $  (    .0000052)  $ (       .00027724)

 The accompanying notes are an integral part of the financial statements.

 

3


ACCREDITED BUSINESS CONSOLIDATORS CORP.
(A BUSINESS DEVELOPMENT STAGE COMPANY)
CASH FLOW STATEMENTS
(UNAUDITED)

 

                                               Three Months         Three Months       July 18, 1998
                                               ended June 30        ended June 30      (emerge from bankruptcy
                                               2012                 2011               to June 30, 2012

CASH FLOWS FROM OPERATING ACTIVITIES:

Net profit (or loss)                              $ 20132.76        $  (  4898.97)       $(238849.85)
    Adjustments to reconcile net loss to cash                                               48503.68
    Notes payable in exchange for services
    Loans to third party companies                                     (    27.50)        (    27.50)
    Common stock issued for services
    Accounts and loans payable                                                              
    Interest payable                                                                        
                                               ------------------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES:               $ 20132.76       $   (  4926.47)       $(190373.67)
                                               ------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash used for investments and stock acq.      $(10032.90)             (250.00)       $(109443.62)
                                               ------------------------------------------------------------------


CASH FLOWS FROM FINANCING ACTIVITIES:

Loans from shareholder(s)                         $                                      $ 127739.20
Long term loans                                                                              8000.00
Issuance of common stock for cash                                                          150000.00
Advances from shareholder(s)
                                               ------------------------------------------------------------------
NET CASH FROM FINANCING ACTIVITIES                $      ---         $        ---        $ 285739.20
                                               ------------------------------------------------------------------
CASH AT THE BEGINNING OF PERIOD                   $  3978.23              8618.29        $       ---
                                               ------------------------------------------------------------------
CASH AT THE END OF PERIOD                         $ 14078.09              3466.82        $  14078.09
                                               ------------------------------------------------------------------
NET CHANGE IN CASH                                $ 10099.86         $  ( 5176.47)       $  14078.09
                                               ------------------------------------------------------------------
                                               ------------------------------------------------------------------

 The accompanying notes are an integral part of the financial statements.

 

4

 


 

 

ACCREDITED BUSINESS CONSOLIDATORS CORP.

STATEMENT OF STOCKHOLDERS' EQUITY AS OF JUNE 30, 2012

 Detail 

Capital on Shares

Capital Stock

Paid-In Capital

Retained Earning

Accumulated Deficit

Total

 

             

 

Balance as June 30, 2012

 

 

     150,000.00

 

 $(279,743.37)

 $(129,743.37)

 

Preferred Shares 500,000,000 authorized at $0.0001 

500,000,000

0.0001

 $50,000.00

 

 

 

 

Common Shares 450,000,000 authorized at $0.0001

435,477,885

0.0001

 $43,551.00

 

 

 

 

Comprehensive Income:

 

 

 

 

 

 

 

Net Income Quarter ended June 30 2012

 

 

 

 

 

           20,132.76

 

Less par value of treasury shares

888,681 

 

$(89.00) 

 

 

 

 

Additional Paid-in Capital

 

 

 $100,000.00

 

 

 

 

Adjustments to Shareholders' equity

 

 

 $(43,640.00)

 

 

 

 

Balance as June 30, 2012

                   -  

 

     150,000.00

 

 $(279,743.37)

 $(109,610.61)

 

 

 

 

 

 

 

 

 

 

 

ACCREDITED BUSINESS CONSOLIDATORS CORP.

STATEMENT OF STOCKHOLDER'S EQUITY
AS OF JUNE 30, 2011

Detail Capital on Shares Capital Stock Paid-In Capital Retained Earning Acumulated Deficit Total
Balance as June  30,  2011      150,000.00   $(230,050.24)   $(80,050.24)
Preferred Shares 500,000,000 authorized at $0.0001          500,000,000 0.0001   $50,000.00
Common Shares 450,000,000 authorized at .0001        436,399,566 0.0001   $43,551.00
Comprehensive Income:
Net Income 2nd Quarter 2011            (4,898.97)
Less par value of treasury shares        888,681 0.0001   $       89.00
Additional Paid-in Capital   $100,000.00
Adjustments to Shareholder's equity       $(43,640.00)      
Balance as June 2011        936,399,566      150,000.00   $(230,050.24)   $(84,949.21)

 

5

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCREDITED BUSINESS CONSOLIDATORS CORP.

 

ACCOMPANYING NOTES

 

 

 

 

 

 

 

 

At June 30, 2012

 

 

 

 

 

 

 

 

 

Note 1:  Nature of Business and Significant Accounting Policies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organization and business

 

 

 

 

 

 

 

 

 

 

 

 

Accredited Business Consolidators Corp. (the "Company" or "accredited") was organized in 1990 under the name Fornello USA, Inc. Accredited changed its name to The Italian Oven, Inc., to reflect the operation of various Italian restaurants. However, in October 1996, the company had no funds to sustain itself, and filed for protection under Chapter 11 of the United States Bankruptcy Code, presented a plan with the Bankruptcy Court, which stripped it of most assets, including intellectual property.  The plan provided no payment to shareholders, but it did not cancel or terminate the common shares of the company. The Bankruptcy Court of the United States for the Western District of Pennsylvania approved the bankruptcy plan and on July 17, 1998, the Company emerged from bankruptcy.

 

After the company emerged from bankruptcy, and until December 31, 2007, the company did not conduct any business. It had no operations or assets. Instead, it simply remained dormant while the administration sought an opportunity for its shareholders. The Company has no restaurants and is not affiliated with the restaurants that bear his name.

 

In late 2008, My Pleasure Ltd. bought the controlling interest of the Company with the intent to locate business opportunities.  Since then, the company has been exploring diversified business ventures in the fields of marketing, hospitality, travel, among other things.

 

 

 

 

 

 

 

 

Basis of presentation, accounting policies, and ongoing uncertainty

 

 

 

 

 

 

 

 

 

 

 

Certain information and disclosures in the notes are included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. The results of operations for the current year are not necessarily indicative of operating results expected for any subsequent fiscal year.

 

The financial statements of the Company have been prepared assuming the Company will continue as a going concern. However, the company has minimal assets and insufficient working capital. These conditions, among others, give rise to serious doubts about the ability of the company to continue as a going concern. There is no guarantee that the measures taken by the management will meet all the needs of the company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, income statement, and cash flows of the Company for all periods presented have been made. Specifically, during the relevant period, the company had minimal operations, a small amount of assets, and incurred only minimal profits. 

The Company may be considered a development stage company as defined by FASB ASC 915-10-05.  As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet data.  In our case, we use July 18, 1998, as the date of inception as that is the date we emerged from bankruptcy with no assets and no liabilities.  That is also the date we began to be a development stage entity.  To date, the development stage of the Company's operations consist of developing business plans, business models, and marketing concepts.    

Cash and Cash Equivalents

We maintain cash balances at Bank of America and with OptionsXpress, the broker we use for stock trading.  For the purpose of the balance sheets and other financial statements, we consider our bank accounts and brokerage account cash balance to be considered cash.

Fair Value of Financial Instruments

Prior to this financial statement, we used the cost basis value as the amount listed with respect to investments we made in various entities.  After receiving comments from the Securities and Exchange Commission, we performed a nunc pro tunc review as of December 31, 2011, and revalued certain investments as an impaired value based on market price instead of our cost basis.  We made an adjustment to the balance sheet for the unrealized loss as a result of the impaired value.  Therefore, we reduced the value of our purchase of common stock in the entity now known as Direct Markets Holdings by $20,499.00, to reflect the market value of the securities as of December 31, 2011.  Similarly, we reduced the value of our purchase of common stock of James Monroe Capital Corp. by $100.00 to reflect its December 31, 2011, value.

Use of Nicaraguan Auditor Firm

We received comments from the staff of the Securities and Exchange Commission citing certain interpretative regulations as to the location of the Company's auditor.  The SEC's interpretation appears to conflict with the plain language of the regulations that require an auditor to be licensed where his office is located, not where the company using his services are located.  Regardless, we believe that our use of a Nicaraguan auditor is appropriate considering that we maintain our records in Nicaragua, have a Nicaraguan officer responsible for the financial reporting, and have no officers in the United States.  We also maintain an office in Nicaragua where our files are physically stored.  Therefore, we believe it is appropriate for us to utilitze a Nicaraguan auditor.  We believe that the plain language of Rule 2-01(a) of Regulation S-X allows us to utilize an auditor that is licensed in the jurisdiction where their firm is located.   Nothing in the Rule requires an entity to use an auditor in any specific location.   Such a requirement may even contravene fair trade agreements that the United States is a party to.  Therefore, any assumption that an issuer incorporated in Pennsylvania, but having its files and officers in Nicaragua, must use an auditor in the United States would be arbitrary, capricious, and contrary to the plain language of the regulation.    With respect to Pennsylvania law, there exists nothing in the Business Corporation Law of 1988 that requires us to use an auditor within the United States.   On the contrary, the only requirement is that we maintain a Commercial Registered Office Provider in Pennsylvania.   We do so by utilizing the services of ABC Agents, Inc., listed and registered with the Pennsylvania Secretary of State as a Commercial Registered Office Provider. Additionally, we maintain the virtual office in Pennsylvania to make it easy to receive correspondence from the United States.  Without regard to the merits of the SEC staff’s interpretation, we would be contravening its goal and intent if we chose an auditor in the United States since we have no physical presence there.   Our officers and agents would not be able to meet with an auditor in that location because of onerous visa requirements that would delay or even prohibit travel.   The records and documents maintained by our enterprise would have to be imported into the United States or transmitted digitally.   Using an auditor in the United States would be unduly burdensome, expensive, and would make our reporting requirements practically impossible to comply with.   As is made clear from our filings, we are with limited resources.   Considering our situation, we would hardly be a proper entity to test what appears to be an overzealous interpretation of the plain language of Section 2.01(a) of Regulation S-X.   Indeed, there may be entities that would be more appropriately served by an auditor in the United States, but with our Nicaraguan ties, we are not one of them.  


Advertising and promotion

Our advertising and promotional costs are identified at the time of payment. We consider both our communications with shareholders, such as press releases, and our advertising products and services to constitute advertising and promotion.  However, our press releases are not offers to buy and sell our securities.  Rather, they are used to aid in the communication with shareholders.  The statements contained in the press release constitute forward looking statements.Certain statements contained therein and made by Accredited Business Consolidators Corp. ("ACDU" or "Company") constitute "statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements, identified by words such as "will," "may," "expect," "believe," "anticipate," "intend," "could," "should," "expect," "estimate," "plan" and similar expressions, relate to or involve the current views of management with respect to future expectations, objectives and events and are subject to substantial risks, uncertainties and other factors beyond management's control that may cause actual results to be materially different from any such forward-looking statements. Such risks and uncertainties include those set forth in this document and others made by or on behalf of the Company in the future, including but not limited to, the Company's limited operating history, its need for additional capital or financing, its ability or inability to produce and market products and services, its ability to make a profit in the future, its dependence on a limited number of customers and key personnel, its dependence on certain industries, its ability to locate and consummate business opportunities that would appear to be in the best interests of the shareholders, its ability to implement strategies to develop its business in emerging markets, competition from other or similar companies or businesses, and, general economic conditions. Any forward-looking statements in this document and any subsequent Company document must be evaluated in light of these and other important risk factors. The Company does not intend to update any forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. 

 

 

 

 

 

 

 

Management estimates

 

 

 

 

 

 

 

 

 

 

 

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts income and expenses during the reporting period. Actual results could differ from those estimates.

 

Business Development Company or Investment Company

In a letter received in September 2012, the SEC’s staff asked us to discuss the consideration given to whether we are subject to the guidance set forth in ASC Topic 946 (relating to investment companies) and to explain the basis for our conclusion.   The staff also requested that we advise if we believe we expect to be qualified as an Investment Company in the future and the support for our conclusion.    ASC Topic 946 relates to investment companies that meet the specific criteria found in Chapter 946-10-15-2.   To qualify as an investment company, the only substantive activities of the entity are investing in multiple investments for returns from primary business activity.   In our case, our business activities are broader.   While we do invest in some startup entities, many which are affiliated with us and which we make clear we have a conflict of interest in doing so, we also hope to earn income and profit through the issuance of loans, receipt of management consulting fees, and commissions and royalties from our advertising, travel services, and other diversified ventures.   An investment company must state that its express business purpose is investing to provide returns from capital appreciation, investment income, or both.   We have not stated this to be our express business purpose.   Indeed, it is not our express business purpose.   Our express business purpose is broader.   Chapter 946-10-15-2 requires that an investment company utilize “unit ownership” which many of our activities do not comply with.   An investment company must also use a “pooling of funds” system that many of our investments do not utilize.   We, as an entity, do not utilize any “pooling of funds” and we have not used our status as a public company to raise funds.   In fact, we have not raised money through share issuances since 1996.    Finally, an investment company evaluates the performance of its investments utilizing a “fair value” system.   We have not engaged in the necessary “fair value management” to become an investment company.   Presently, we have reported our interests in cash without any write down for fair value except where we took a charge for unrealized losses due to the impaired value of marketable securities effective December 31, 2011.   We also do not have the ability to determine the “fair value” of some of the investments we made.    In some instances, we have no non-public information about the entities and said entities are non-reporting entities.   Therefore, we have no method to gauge the “fair value” of the investment and our ultimate returns may not be based on the value of the entities at all, but rather on the whims of market speculators where the equities trade over the counter.   Pursuant to the SEC’s staff comments, we will attempt to provide a more fair value based on market price guidance; however, we have no method to engage in a true “fair value management” as to these investments that would allow us to be classified as an investment company.       We do not anticipate that we will be an investment company under the strict definition found in Chapter 946-10-15-2 in the near future.   While we are not limiting ourselves to assert that we will never revisit that statement, it is not something that will occur within the reasonable future.   On the contrary, we believe that our focus will be on developing business within ACDU through direct contracts or subsidiaries.        

As to qualification as an Investment Company under the Investment Company Act, the SEC’s staff asked us to state how we considered whether or not we qualified as an investment company under Section 3 of the Investment Company Act of 1940, specifically, the description of activities and asset test defined in Section 3(a)(1)(C) of the Act.  We would not be considered an “investment company” because of Section 3(b)(1) of the Investment Company Act of 1940 .   Indeed, we are engaged in businesses other than that of investing, owning, holding, or trading in securities.   We provide management consulting services, loans, collect travel commissions, receive commission on internet advertising, and, as recently announced, now provide internet hosting and internet domains through our associates.     As stated in our report, most of the entities that we propose being affiliated with have not yet issued securities except where stated in our financial statements that we own stock in the entities.   Our business relationship with the companies presently involves our loaning money to them.   Since our commissions related to our other businesses, such as our travel business and internet advertising services, have so far been de minimus , our primary activity involves providing loans to the entities we provided money to at a set interest rate.   Therefore, we also fall under the exception to being an “investment company” found in Section 3(c)(4) relating to companies that substantially all of its business is confined to making small loans or similar businesses.   While we note that it appears that, at the end of the fiscal year 2011, we had more than forty per centum (40%) of our assets in securities, this situation is temporary.   Our loan portfolio and non-stock assets will most likely exceed the shares by the end of this fiscal year.   Moreover, we have begun liquidating a portion of our stock holdings.   Furthermore, pursuant to the staff’s suggestion, we will note some of our investments in stock as impaired which will result in a further decrease in the value of our stock-based assets. Finally, our investment in our own stock would not be considered towards the forty per centum (40%) figure.    

In paragraph 6 of the letter, the SEC’s staff inquires about our statement that we are finalizing documents to raise capital as a business development company as defined by the Investment Company Act of 1940.   We do not plan to raise capital as a BDC and we do not purport to be a BDC.   However, we are affiliated with a company, Accredited Business Development Company, which may seek to raise capital as a BDC in the future.   However, ABDC has not taken the steps necessary to move forward at this time.   ABDC’s sole actions, as of the present date, is that it was formed as a corporation and acquired a Central Index Key number from the SEC.   It has not sought to raise capital.   It has neither solicited any person nor received funds from any person.   ABDC presently maintains no assets and no debt.   In the event that ABDC prepares the documents to move ahead with its forward looking goal of raising money as a BDC, it would file the appropriate paperwork with the SEC and register to do so.   Our role with ABDC would be assisting it with management of the enterprise and possibly as an investor in the Company.   In the event of a development with respect to the program, we would file appropriate notifications to our shareholders and make our role clear.    

6

 

 

 

 

 

 

 

 

 

Note 2: Related party transactions

 

 

 

 

 

 

 

 

 

 

 

 

Since late 2008 when the majority ownership of the Company was acquired by My Pleasure Limited of the United Kingdom, the majority of Accredited’s funding came from My Pleasure Ltd.  This funding is considered a related party transaction.  Similarly, with respect to the loans made by Accredited during 2010, the funds were made to affiliated of the Company and are considered related party transactions.  These transaction create additional risk as the loans made and received may not meet normal business standards and due diligence.

 

 

 

 

 

 

 

 

 

 

Note 3: Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2012, the Company is not subject to contingencies or commitments or obligations under lease commitments.

 

 

 

 

 

 

 

 

Note 4: Going concern

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2012, the Company had insufficient working capital. As such, the accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern.  The continuation of the company as a going concern depends on obtaining additional working capital. In addition, the company’s business model is untested and untried.  The Company invests in high risk start-up enterprises.  The Company will rely on receiving additional funding from My Pleasure and other enterprises in order to continue making investments and loans.  This situation makes Accredited a company that is suitable for investment only by for professional investors that understand the inherent risks of  a company that invests in start–up enterprises. Additionally, the Company trades in the Over-the-Counter market, a volatile market for professional investors who understand the risks inherent in trading stocks that lack liquidity.

 

 

 

 

 

 

 

 

Note 5:

 

 

 

 

 

 

 

 

 

 

 

 

The Company's cash and bank accounts derives from the following accounts:

 

 

 

 

 

 

 

 

Bank of America 8569

 

     $  1,259.72

 

 

 

 

 

 

 

 

 

Bank of America 8572

 

                                    380.61

 

 

 

 

 

 

 

 

 

OptionsXpress Brokerage Account

 

     12,437.76

 

 

 

 

 

 Total

 $  14,078.09

 

 

 

 

 

 

 

 

 

 

 

7

Note 6 -- Stock Holdings

We have listed on our balance sheet certain investments into securities and/or stock.   These investments are described in more detail below:

We own 25% of Industrial Supply Company LLC, a Florida entity.  We paid $2,500 for the interest.  ISC planned on registering as a lobbying entity with respect to construction contracts.  Management understands that the entity is not currently pursuing this goal.  We may choose to impair the value of this investment effective December 31, 2012.  If we do this, we will take a charge for the entire amount of the investment and the charge will be found in our annual report for 2012.

We purchased 43,639,950 common shares and 1,000,000 preferred shares of Hiland Terrace Corp., an entity that owned the Hiland Terrace Hotel and Office Center in North Huntingdon, Pennsylvania.  We paid $4,200 for the interest.  Since our investment, Hiland Terrace Corp. divested its hotel asset.  However, Hiland Terrace Corp. continues to operate and receive commissions on certain rooms sold at the hotel.  We believe that, if Hiland Terrace Corp. liquidated, we would recoup our investment at this time.  For that reason, we have not reduced the value or taken an impairment charge with respect to this investment.

We own 77,634 common shares of Southeast Banking Corp.  Southeast Banking Corp. is the holding company of a bank that was ultimately seized by the Federal Deposit Insurance Copr.  We paid $7,763.40 for the shares.  We purchased the shares when the banking institutiion was under bankruptcy protection.  We did not impair the value of this investment as of December 31, 2011, because the enterprise was rerorganizing and there was an interested buyer.   However, subsequent to the annual report, the bankruptcy converted into a liquidation and it is unlikely that we will recoup anything from this investment.  However, we perform impairment analyses on an annual basis.  Therefore, we will not revalue this investment until December 31, 2012.  Shareholders are advised that we will probably not receive any compensation from this investment and it is most likely valueless.

We own 25% of the capital stock of 3-101-53218, S.A., which we paid $2,000.00 for.  The enterprise operates a retail store in Costa Rica at the San Pedro Mall. 

We own 126,012 of IAHL Corporation.  We paid $28,507.72 for the shares we currently own.  IAHL Corp. IAHL Corporation trades on the over the counter market in the United States under the symbol IAHL.  IAHL merged with TransCryogen, LLC (A cryogenics transportation and logistics company –www.transcryogen.com). TransCryogen and Altenesol have been working together as partners where TransCryogen supplied the transportation and logistics for the LNG to be produced by Altenesol’s Colombian plant. 

We own 25% of the capital stock of Soluciones Faciles S.A., a Costa Rican entity, which we paid $5,000.00 for.  Soluciiones Faciles, S.A., offers payday loans to the public.  Management of Soluciones Faciles S.A. advises us that the program is profitable and that it expects to issue us a dividend in the second half of the year.

We own 1,000,000 shares of James Monroe Capital Corp., an entity that trades on the over the counter market as JMCP.  We paid $200.00 for the shares.  We revalued the shares base on market value as of December 31, 2011, at $100.00, or $.0001 per share.  We know little about JMCP except that our investigation demonstrated that it appears to be part of a stock fraud scheme that issues shares pursuant to fraudulent and inflated debt.  We may consider taking action against JMCP; however, our de minimus losses do not appear to make litigation feasible.

We purchased 4,363,996 common shares of Diversified Land Management Group, Inc., from a private party for $225.00.  The shares are unrestricted.  Diversified Land Management Group, Inc., owns parcels of land in Western Pennsylvania.  Aside from owning the land, we are unaware of any significant business activity by DLMG.  We have not yet received our share certificate because management of DLMG informs us that their transfer agent, Transfer Online, Inc., improperly impounded their share records claiming that they owe a "termination fee" because they were directed to transfer the records to a different transfer agent.  Management of DLMG informs us that the enterprise intends to initiate litigation to obtain its share records so that it may issue our certificate. 

We purchased shares of Averion International Corp. for $1,601.00.  These shares were ultimately converted to 395.78 preferred shares.  Averion appears to continue to function as an entity, but it no longer files reports with the Securities and Exchange Commission.  We understand that four small and mid-sized clinical research service companies—Averion International, Trio Clinical Research, Fulcrum Pharma and Clin-Research/ADDPLAN—have merged into one global biopharmaceutical and medical device development services organization.  We will investigate the status of our preferred shares and the value of them with respect to the new entity.

We own 4,150 shares of Direct Markets Holdings Corp., a broker-dealer.  We obtained the shares by purchasing common stock of Hudson Holding Corp. for $22325.00.  After Hudson merged with what is now known as Direct Markets Holdings Corp., our investment was significantly devalued.  Our position is that the merger was done against the interests of the shareholders and involved fraudulent actions by management that breached their fiduciary duties.  This resulted in a significant loss to the value of our shares and we took an unrealized impairment charge of $20499 as of December 31, 2011, nunc pro tunc.

We purchased 10,000 shares of Hotels & Stuff Inc. for $2,000.00.  Hotels & Stuff Inc. is a Colorado corporation that currently owns the Hiland Terrace Hotel and Office Center in North Huntingdon, Pennsylvania.  We are informed by management of Hotels & Stuff Inc. that they will take over operations at the hotel effective January 1, 2012.

Note 7 - Additional Stock Holdings

The following stock purchases occurred during the second quarter of 2012.

We purchased 15,300,672 common shares of A Clean Slate, Inc., for $12,028.44.  A Clean Slate trades on the over the counter market as DRWN.  A Clean Slate was an enterprise that invested in distressed assets.  Since the time of our purchase, management of A Clean Slate, apparently using inflated debt instruments issued to their affiliates, and not disclosed in their financial filings, significantly diluted their share structure.  Management concealed this material information and we were unaware of it at the time of our investment.  We are considering our operations and have served notice on A Clean Slate's reputed president that we may choose to take legal action against the entity.  We will advise shareholders of any developments in this regard.  Shareholders are advised that on December 31, 2012, we will conduct an impairment analysis based on this information and the current market price of the securities.  This may result in our reduction of the value of this investment.

We purchased 2,985,199 shares of common stock in Beacon Redevelopment Industrial Corp. for $8,376.46.  Beacon Redevelopment trades as BCND on the over the counter market.  BCND, through its subsidiary Beacon Pennsylvania Holdings, owns the Westmoreland Glass Factory in Grapeville, Pennsylvania.  The factory, which is inoperable and damaged, was made of Chicago style bricks circa 1900.  There are several million bricks on site.  BCND management believes that the bricks have a value of 25 to 50 cents each depending on the condition.  BCND, through its subsidiary, also owns 250 acres of land in West Virginia.  Finally, BCND maintains certain natural gas rights with respect to its Grapeville, Pennsylvania, property.

 
 

8

 

 

 

 

 

 

 

 

 

Note 8:

 

 

 

 

 

 

The Current Liabilities consist of loans made by My Pleasure Ltd. to the Company.

 

 

The Current Interest Payable contains the accrued interest owed on the loans from 2009 through the present.

 

 

 

 

 

 

 

 

Note 9:  Capital

 

 

 

 

 

 

In 2008, The Company issued 5,000,000 shares to My Pleasure Ltd. For 0.03 per share. This result in the new share being listed with the previously issued and outstanding common stock.

 

 

 

 

 

 

 

 

 

 

The additional paid in capital of 100,000 is based on the remaining 0.02 per share.

 

 

 

 

 

 

 

 

 

The adjustment to the shareholder's equity of 43,640 is made to correct the deficit caused by the par value of the share issued prior to 2008.

 

 

 

 

 

 

 

 

 

 

On September 29, 2009, the Company cancelled the 1,892,100 share in the treasury

 

 

 

 

 

 

 

 

 

On May 10, 2010, the Company deleted 34 shares that were listed as previously having been issued. This was because the transfer agent rounded fractionally shares to the nearest whole share. One shareholder maintained 66/100th of a share that the transfer agent listed as a whole share. After the 100 for 1 forward split that occurred in 2009, the .66 share became 66 shares. The transfer agent requested permission to correct the record in this regard and the company granted permission.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 ITEM 2. 

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis should be read in conjunction with our financial statements and related notes included in this report. This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as "may," "will," "should," "expects," "anticipates," "estimates," "believes," or "plans" or comparable terminology are forward-looking statements based on current expectations and assumptions. Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements.

All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

History

 

Accredited Business Consolidators Corp. (the "Company" or "ACDU") was organized in 1990 under the name Fornello U.S.A., Inc.  ACDU eventually changed its name to the Italian Oven, Inc., to reflect its operation of various Italian restaurants.  However, in October, 1996, ACDU did not have the funds to sustain itself, and it filed for protection under Chapter 11 of the United States Bankruptcy Code.   ACDU submitted a plan to the bankruptcy court which divested it of most assets, including some intellectual property and trademarks.  The plan provided no payment to shareholders; however it did not cancel or extinguish the common shares of ACDU.  The United States Bankruptcy Court for the Western District of Pennsylvania approved the bankruptcy plan. On July 17, 1998, ACDU emerged from bankruptcy.

From the time ACDU emerged from bankruptcy until late 2008, the company conducted no business.  It had no operations and no assets.  However, it did incur legal and other expenses. Additionally, management attempted to locate business opportunities for the company and, as a result, it incurred debts payable to business reconstruction consultants. My Pleasure, Ltd., a corporation domiciled in the United Kingdom, agreed to provide ACDU with a cash infusion of 150,000.00 to pay off all of the company's debts in exchange for a controlling interest in the Company. On October 17, 2008, My Pleasure Ltd. did indeed provide the cash to the Company which was used to pay off the prior debt and legal expenses. After the payments occurred, ACDU was completely free of debts and expenses. My Pleasure Ltd. received 5,000,000 restricted pre-split common shares which provided it with a majority control over the Company. My Pleasure Ltd. is a foreign entity that is not owned by any United States persons. Because of this, the Company believes that the transaction was exempt from securities regulations governing United States investors. Nevertheless, legal counsel for the Company filed a REGDEX on November 3, 2008, related to the transaction since My Pleasure was also an accredited investor. The REGDEX does not allow, and will not allow, the Company to sell the unregistered free trading securities to other accredited investors. In fact, My Pleasure Ltd. ultimately converted its controlling interest through common shares to a controlling interest through preferred shares.

Also in October 2008, My Pleasure Ltd., as majority shareholder, elected Joanna Chmielewska as the Company's primary officer. Concurrently, the Company appointed Action Stock Transfer as its stock transfer agent. Action Stock Transfer is located at 7069 South Highland Drive, Suite 300, Salt Lake City, UT 84121. Action is registered with the Securities and Exchange Commission as a stock transfer agent.

The Company established a virtual office at 196 West Ashland Street in Doylestown, Pennsylvania 18901 so that it could receive legal documents and mail. The office is not a staffed office but is merely a center to receive business communications. The Company deemed it unnecessary to have a fully staffed office because most of its business opportunities would be located out of the United States.

During 2009 through the present, the Company primarily operated as a holding company owning a majority stake in the Company's subsidiaries.

For the upcoming quarters of 2012, the Company will focus primarily on its Accredited Transcription Corp., SadBro, Telecom Tools, Identifier Inc., and RSS Marketing programs along with some projects that have not yet been announced because of uncertainties in forming a material agreement.

10

 

 

 

Change in Control and Change in Management

 

As explained above, in October 2008, there was a significant and material change in control and management when the Company issued 5,000,000 restricted common shares to My Pleasure Ltd. of the United Kingdom. The issuance of these shares effectively gave majority control to My Pleasure Ltd. My Pleasure Ltd. effectively controls the Company and, by vote of its shares, controls the directors and officers of the Company. Also in October 2008, Joanna Chmielewska was appointed the Company's control officer and director. Ms. Chmielewska is effectively controlled by the voting shares of My Pleasure Ltd. No person owns more than 10% of My Pleasure Ltd. However, My Pleasure Ltd. is a private company and most of its records have not been made available to the public. Investing in ACDU does not constitute an investment in My Pleasure Ltd. On the contrary, My Pleasure Ltd. is an investor in ACDU and may be an investor in other companies not affiliated with ACDU.

 

Plan of Operation and Statement of Operations

 

Subsequent to the purchase of control by My Pleasure Ltd., the Company changed its scope of operations. The Company's business model turned into that of a holding company engaged in locating business opportunities. ACDU would either create the business themselves, form partnerships or joint ventures with third parties, or make direct investments into other corporations. Most of the business opportunities would involve distressed entities or new entities. As a result, ACDU would be required to help assist the companies locate loans or equity finance to enhance the potential for success of the ventures. These companies and ventures may also need to file registration statements with the Securities and Exchange Commission so that they may seek investment money from the public. With this business plan in mind, ACDU created certain related companies as discussed below.  While ACDU will own part, and in some cases most or all, of the entities below, the Company has not directed a stock transfer agent of these entities to issue shares to it.  Once the shares are activated, formal documentation will be filed and the shares will appear, unless they already appear, on the Company’s balance sheets.

 

1. Italian Oven International, Inc. ("IOII"). IOII was formed in January 2009 through a filing with the Pennsylvania Secretary of State to hold investments into small businesses located outside of the United States. IOII remains dormant and its business plan has not advanced.

 

2. Accredited Business Development Corp. ("ABDC"). ABDC was formed in March 2010 as a Pennsylvania corporation. ABDC will purchase minority stakes in international companies that are deemed worthy and which may be positioned for growth. The Company is in the process of finalizing the necessary documents to raise capital as a Business Development Corp. under section 55 of the Investment Company Act of 1940. It is expected that ACDU will maintain control of ABDC even after the capital raise. Presently, however, ABDC is not conducting business and its success will be dependent on formulating its filings and locating investment-worthy international enterprises.

 

3. Accredited Consolidators Europe PLC ("ACE"). ACE was formed in the United Kingdom in November 2009 as a public limited company. ACE will be a holding corporation similar to ABDC, discussed above. However, it will focus primarily on projects in Eastern Europe. While it will operate similar to a BDC, the Company may or may not choose not to register with the Securities and Exchange Commission and, instead, might only accept foreign investment capital. On December 31, 2011, the Company entered into a resolution directing that it would file documentation with the Pennsylvania Secretary of State to domesticate itself there during the second quarter of 2012. The Company did not domesticate ACE as of June 30, 2012. The Company will be filing the domestication documents on August 15, 2012.

 

11

 

 

4. Accredited Hospitality Group Inc. ("AHG"). AHG is a Pennsylvania corporation formed in November 2009. AHG was formed to develop investments in the hospitality industry. Presently, AHG's sole contract is to provide management services with Hiland Terrace Corp., a small hotel in North Huntingdon, Pennsylvania. The contract does not presently provide revenue to AHG due to Hiland Terrace's financial position. It is noted that the Hiland Terrace was sold to Hotels & Stuff, Inc., a Colorado corporation, in December 2011. Hotels & Stuff will continue its relationship with ACDU. Hotels & Stuff Inc. was set to take control of the management of the Hiland Terrace effective June 1. Hotels & Stuff delayed taking over operations of the Hiland Terrace Hotel due to the death of an officer of Hiland Terrace Corp. which complicated the transition. The Company expects that the full transition will occur on August 15, 2012, when the revenue from the hotel will be transmitted to Hotels & Stuff Inc.

 

5. Italian Oven Intellectual Property Inc. ("IOIP"). IOIP is a Pennsylvania corporation formed in January 2009. The purpose of IOIP will be to manage ACDU's intellectual property and trademarks, whether official or common law. IOIP will act separately from the parent company and will receive income through licensing and commissions. While the Company previously reported that IOIP is not expected to be divested from the parent company and it will most likely never file a registration statement to raise capital, certain business opportunities were presented to IOIP. These opportunities included partial purchase of a patent for certain technologies that are being infringed upon. If the business venture is implemented, IOIP could expand beyond its role of retaining the intellectual property of ACDU.

 

6. Italian Oven Travel & Entertainment Corp. ("IOTE"). IOTE is a Pennsylvania corporation formed in January 2009. The purpose of IOTE is to offer travel and entertainment related websites. IOTE presently has numerous contracts in place to sell travel offerings such as cruises, hotels, car rentals, and tour packages throughout the world. While agreements to offer travel services are in place, IOTE will need to raise capital to obtain the money to prepare the websites and booking engines necessary to be successful. IOTE was dormant during the first half of 2012.

 

7. Italian Oven Technologies Inc. ("IOTI"). IOTI is a Pennsylvania corporation formed in February2009 to engage in the business of distributing electronic devices to Central America. Initially, the Company teamed up with ACER Computers as an authorized partner and prepared to import computers into Costa Rica, Nicaragua, and Honduras. However, the Company determined that the pricing for purchasing systems in bulk from ACER could not compete with large retailers such as Circuit City and Amazon.com. While these outlets are not in Central America, residents of those countries import electronics on their own using services with mail forwarding from Miami. Recently, IOTI changed its focus to dual-SIM cellular phones. IOTI began negotiating agreements with several wireless telephone manufacturers in China and Hong Kong that manufacturer the devices. IOTI is in the product testing stage to assure that only quality products are purchased. If the phones being tested pass the tests, the Company will begin importing these telephones into Central America. The dual-SIM phones are extremely popular in Central America because most clients use a prepaid SIM. The prepaid plans provide low cost calling, but only to other phones on the same network. Therefore, residents of Central America usually carry two cellular phones, each being on a separate provider. Having a dual SIM phone alleviates the need for two phones. IOTI will require capital to successfully move forward with the project. This project did not move forward during the relevant times. However, plans were developed for the third quarter of 2012 that including purchasing name-brand telephonic equipment earmarked for India and importing it to Central America. Specifically, the Company is looking at certain dual SIM models of LG telephones and new tri-SIM telephones.

 

12

 

 

8. Italian Oven Financial Inc. ("IOF"). IOF is a Pennsylvania corporation formed in January 2009. IOF's purpose and plan is to offer financial services as a white label affiliate for unique products that can be provided with fair pricing. Presently, IOF is exploring a potential partnership to provide a binary options trading platform to the public. During 2011, negotiations did not continue for the binary options program. However, IOF is planning to explore the opportunity with another financial services company that may wish to enter a similar program during 2012.

 

9. Richwood Eco Ventures, Inc. ("REVI"). REVI is a Pennsylvania corporation formed in 2009. REVI operated a venture whereby it had Richwood Corporacion in Nicaragua process wood for it which was then sold to enterprises in Europe and the United States. REVI filled two orders for wood from a company in Andorra and caused the timber to be delivered; however, it has since been impaired from operating because of several factors. The first material event was that its consulting director fell ill and was unable to continue in his capacity. This left REVI with no experienced officer in the field. Concurrently, creditors of Rich Forest Management took over the Richwood factory as they claimed to hold a mortgage thereon. While REVI, through its affiliates, owned approximately 100,000 in equipment assets, those assets were inside the factory. REVI's affiliates are presently going through both criminal and civil legal channels to reacquire possession of its wood processing equipment. Once REVI obtains the equipment, it will either partner with another wood processing plant or it will open its own plant. In either case, REVI will need capital and will file an appropriate registration statement with the Securities and Exchange Commission so that it can raise money. During 2012, the legal challenges remained pending. In early 2012, REVI’s affiliates obtained a court order to retrieve their property. However, the opposing party obtained a temporary stay of the Order. Since the temporary stay, affiliates of REVI presented evidence to the Court showing that the documents submitted by the opposing party could not have been created on the date that they were signed. Specifically, official documents in Nicaragua contain a numbering system that makes it difficult for a party to forge documents because the newer paper would not have existed during the time of the original transactions.

 

10. Telecom Tools Inc. ("TTI"). TTI is a Pennsylvania corporation formed in July 2009. TTI filed a patent for a modification to a popular telecommunications punch-down tool. Punch-down tools are routinely used when installing wiring for communications systems and in telephone rooms. The #66 punch-down blade frequently causes accidental shorting when installers brush the tool against adjacent connections. This causes digital stations to crash, lockup, or trip circuit protection, resulting in dropped calls and upset clients. Worse, such accidental contact sometimes causes permanent damage to equipment. TTI's patent provides a coating to the tool that will minimize the chances of shorting. The modification will only cost manufacturers a small amount of money per tool to add the protection to it. TTI will collect royalties on its patent-pending process. TTI’s patent application remained pending during 2011. The Company expects a response from the USPTO during 2012. As of June 30, 2012, the Company did not receive any information from the USPTO. The Company intends to complete a website during the third quarter of 2012 providing information about its product and allowing third-parties to license the technology.

 

13

 

 

11. Industrial Supply Company LLC ("ISC"). ISC is a Florida Limited Liability Company formed in April 2008. ACDU presently owns 25% of ISC. ISC operates as a construction consulting and lobbying organization. It does not intend to file a registration statement or seek capital from investors. It will work closely with ACDU to develop its consulting enterprises and may help construction companies obtain financing or obtain modifications to local, state, and federal laws through its lobbying programs.   Unfortunately, during 2011, our relationship with ISC remained flat. The executives at ISC failed to pursue their plans and it is unlikely that they will come into fruition. We continue to possess our ownership, and we have not yet written off the value of our investment, but we do not expect the business to advance in a beneficial way to ACDU. Furthermore, ACDU will not attempt to enforce any rights against ISC or to force changes in the business model.

 

12. Envirocare Corp. ("ECC"). ECC was formed in 2009 by ACDU as an entity that would sell products such as environmentally friendly cement. The formation of ECC occurred before the Calichi Sino alliance was created. ACDU will not move forward with using ECC as a vehicle to sell this type of product because it will focus primarily on the CSI alliance. Since determining that it could not continue with the proposed joint venture with Blue World Crete (formerly known as Green World Crete) because it determined that officers of B/GWC had convictions in a Medicare fraud scheme. Because of the abandonment of the project, ECC remained dormant. However, ECC will continue to search for ventures that will not compete with CSI and that are environmentally friendly. If it locates an opportunity, it would need to file a registration statement with the Securities and Exchange Commission to gain the capital it needs.

 

13. Accredited Suppliers Corp. ("ASC"). ASC was formed in November 2009 as an entity that would import auto parts and other supplies to Central America. ASC has been in operation for nearly two years and is achieving a fair profit; however, the initial investment into ASC was low so the profits were similarly not substantial. Therefore, ASC needs to replicate its business model with additional capital. ASC requires additional capital to implement its business model and buy additional vehicles and hire staff to deliver parts to enterprises in rural areas in Nicaragua, Honduras, and Guatemala. Parts carry a premium in remote areas because most business owners have to travel to the city to buy items for sale in their stores. Having a delivery service to the areas makes Accredited a primary supplier for the rural business.

 

14.  3-101-532180, S.A., of Costa Rica. 3-101-532180 S.A. operates a mall-based clothing store in Costa Rica. ACDU owns 25% of 3-101-532180 S.A.  The Company is expanding to Spain, most likely Madrid or Barcelona, in 2011. However, the Spain store will be a separate entity. It is expected that ACDU will own 25% of the Spanish entity that will be formed for this operation or will participate in a joint venture agreement whereby it controls a 25% interest therein. During 2011, 3-101-532180 did indeed expand to Spain with a slight direction to the program. The new venture focuses on new age materials. During 2012, a Pennsylvania entity will be formed to purchase certain loans made to the new enterprise. It is expected that ACDU will own between 9 and 24% of the new entity. The new entity was not formed during the second quarter of 2012, but will be during the third quarter.

 

15.  Hiland Terrace Corp.  The Company owns less than 10% of the Hiland Terrace Corp., a corporation that owned a small motel and office center in Pennsylvania.  Hiland Terrace Corp. sold the hotel in December 2011 to Hotels & Stuff, Inc. a Colorado corporation. ACDU will receive shares in Hotels & Stuff Inc. to compensate it for its percentage of ownership in Hiland Terrace Corp. ACDU received certain Hotels & Stuff shares during the first quarter of 2012.

 

14

 

 

16.  Identifier Inc. ("II"). II was formed in 2010 to earn advertising revenue from websites. The websites focus on the release of data in a publicly alterable wiki format. II requires additional capital to implement its business model. During the Second Quarter of 2012, Identifier Inc. did not have substantial operations to report. However, during the second quarter of 2012, Identifier Inc. hired a full time programmer in India to establish their internet sites so that the business model will move forward. The Company will begin its website development during the third quarter of 2012.

 

17.  Accredited RAC Company ("ARAC"). ARAC is a Pennsylvania corporation formed in July 2010. ARAC's business plan is to offer car rentals in Central America. ARAC, while it maintains financing in place to purchase vehicles for rent in Nicaragua, has chosen to continue its evaluation of the market before beginning operations. Specifically, prior to moving forward with the vehicle purchase, the Company needs to be assured that it will be able to make payments during the initial stages of operations. The Company did not move forward with the ARAC program during 2012 and, due to its investigation of insurance programs available in Nicaragua, has decided to restructure the enterprise’s business plans prior to proceeding.

 

18.  Calichi Sino, Inc. ("CSI"). CSI is a Florida corporation formed in February 2010. ACDU will own between 10 and 20 percent of CSI depending on the final agreement between the partners. CSI will market environmentally friendly concrete products. CSI will be a prospective alliance of partners including ACDU, companies affiliated with Zeobond of Australia, and entities affiliated with Harricrete Ltd. of Trinidad. In the simplest of terms, the alliance will purchase or produce Zeobond's patented products and distribute them in areas that Zeobond does not presently have a market for them. Harricrete, which presently engages in international distribution of construction materials, will provide its logistical experience and distribution channels. During 2011 this project did not move forward through no fault of Zeobond or ACDU officials. Rather, United States-based intermediaries appeared to be occupied with other projects and did not move the project forward. The Company believes that the project remains viable, but without serious implementation of the plans by the intermediaries in the United States, the project cannot move forward. While the potential exists to find other partners in the United States and to use Zeobond as a supplier or via a licensing agreement, ACDU’s percentage of ownership in CSI did not enable it to force the issue through. It is understood that the intermediaries in the United States allowed CSI’s Florida registration to lapse as well. Therefore, if ACDU chooses to involve itself in this project during 2012 or beyond, it would require additional control over the administration of the Company including, but not limited to, control of financial accounts and corporate documents to enable complete oversight and achievement of success and a direct working relationship with Zeobond so that the enterprise would not become reliant on the intermediaries or consultants.

 

19. SadBro Cinema Inc. ("SadBro"). SadBro is a Pennsylvania corporation formed during 2011 that is in the process of filing a registration statement with the Securities and Exchange Commission. SadBro maintains a licensing agreement to create, produce, and complete a film preliminarily titled, "The Convocation." The screenplay is completed, but subject to certain editing. Once the registration statement is filed, ACDU plans on providing support for the enterprise. Final determinations have not been made as to the extent of ACDU’s involvement in the project, but it is expected that ACDU will own between 9% and 24% of the Company. During the second quarter of 2012, ACDU continued to assist SadBro with its plan of moving forward with respect to the movie development. SadBro officials are preparing an inventory of assets for financial statements so that the movie can be funded with the help of ACDU affiliates. The Convocation script was edited and is near its final stage.

15

 


20. RSS Marketing Inc. ("RSS"). RSS is a Pennsylvania corporation formed in 2009 that has developed business plans for an internet marketing company based in Nicaragua. RSS will make use, pursuant to a licensing arrangement, of certain domain names controlled by Domain Management, Inc., a corporation also affiliated with ACDU. Presently, ACDU does not own any shares of RSS. However, RSS is in the process of filing a registration statement with the Securities and Exchange Commission. If approved, ACDU will be in a position to purchase shares of RSS. This matter was delayed during the Second Quarter of 2012 due to some confusion with the CIK Number of RSS Marketing. Specifically, the SEC believed that the Company was previously in existence. However, after discussions with staff at the SEC, RSS Marketing was able to obtain its new CIK number and recently deposited the required fees with the Securities and Exchange Commission so it may file its registration statement.

21. Accredited Transcription Corp. ("ATC"). ATC is a Pennsylvania corporation formed in 2011 to effectively administer certain patents for technology. ACDU will own approximately 15% of ATC. ATC did obtain, through assignment, 66.6% of United States Patent 6,298,326 for an off-site data entry system. The Company believes that the patent is being infringed upon by several vendors of cellular and wireless systems including those built into both the current version of Google’s Android and Apple’s I-Phone operating systems. Therefore, ATC retained legal counsel to assist it in prosecuting its claims. Once final documents are executed, ATC will provide an announcement of its litigation strategy. ATC advised ACDU that it believes the matter will move forward during the Third Quarter of 2012. Delays occurred because the Company hoped that the owner of the remaining portion of the patent rights would enter into a joint prosecution understand and share legal counsel with ATC; however, negotiations stalled and, absent a development, ATC will prosecute its rights on its own.

 

 

ITEM 3.

 

Quantitive and Qualitive Disclosures About Market Risk

As a smaller reporting company as defined by Item 10 of Regulation S-K, we are not required to provide information solicited by this item. Nevertheless, we note that an investment in ACDU is highly speculative in nature and should only be made by professional investors who fully understand the risks of over the counter investments. In fact, when an investor purchases ACDU shares, it does not benefit the Company. Rather, the shares are being purchased from a third party who bought the shares on the open market or as part of the original offering by the Italian Oven between 1995 and 1997.

 

16

 

 

ITEM 4.

 

Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, management carried out an evaluation, with the participation of the Company’s Principal Executive Officer and Financial Officer, of the effectiveness of the Company's disclosure controls and procedures, as of June 30, 2012. Based on the evaluation as of June 30, 2012, the Principal Executive Officer and Financial Officer of the Company have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e)and 15d-15(e) under the Exchange Act) were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. 

Internal controls are procedures which are designed with the objective of providing reasonable assurance that our transactions are properly authorized, recorded and reported and our assets are safeguarded against unauthorized or improper use, to permit the preparation of our financial statements in conformity with generally accepted accounting principles. While the Company's controls and procedures were inadequate for timely reporting, the internal controls and procedures did not appear to be sufficient for fair and accurate disclosure of information and to prevent unauthorized or improper use of the Company's financial statements.

 

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ending on June 30, 2012, that materially affected or is reasonably likely to materially affect our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1.

 

Legal Proceedings

The Company has no material legal actions pending against it or any of its subsidiaries. The Company, through its affiliates, is engaged in litigation to achieve access to the property belonging to Richwood Eco Ventures Inc. The property consists of wood processing equipment. While the Richwood Eco Ventures matter is not material to the Company to the extent it will affect our business model of assisting other companies, it is material to our subsidiary, Richwood Eco Ventures, Inc. Prevailing in the legal actions would greatly assist in the success of Richwood Eco Ventures. However, there is no certainty in legal proceedings. During the first quarter of 2012, Richwood Eco Ventures’ agents and affiliates received a judicial order for the return of the property in question. However, the possessor of Richwood’s property obtained a stay of that Order. We expect that additional information will be available during the second quarter. The equipment is not included on ACDU’s balance sheets but is included here so that shareholders are aware of ongoing proceedings with affiliated companies.

 

ITEM 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not issue or sell any securities during the time period of this report.

 

17

 

 

ITEM 3.  

 

Defaults Upon Senior Securities

The Company does not have any senior securities or notes that it could default on.

 

ITEM 4 . 

 

Mine Safety Disclosures

Neither the Company nor its affiliates have any involvement in mining activities.

 

ITEM 5.  

 

Other Information

Accredited Business Consolidators Corp. is an extremely risky investment. The Company is engaged in the creation of enterprises or investment in enterprises that have no or little established business. In addition, the Company's investments into enterprises that are established are high risk because the enterprises are usually financially distressed and will require additional capital to expand or complete their business goals. We may or may not be able to provide them with sources of capital in this regard.

 

 

 

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ITEM 6. 

 

Exhibits and Reports on Form 8-K

Exhibits

 

31.1

Certification  of Chief Executive  Officer and Chief Financial  Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

32.1

Certification  of Chief Executive  Officer and Chief Financial  Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

Reports on Form 8-K

 During the Second Quarter of 2012, we did not issue any notices on Form 8-K.

ACCREDITED BUSINESS CONSOLIDATORS CORP.

 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.

  

 

Accredited Business Consolidators Corp.

 

 

Date: November 19, 2012

/s/ Joanna Chmielewska

 

Joanna Chmielewska

 

President and Chief Financial Officer

 

 

 

19

 

 

 

 

EXHIBIT 31.1

CERTIFICATIONS

 I, Joanna Chmielewska, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Accredited Business Consolidators Corp.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am presently responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) for the registrant and have:

(a)

 

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries;

(b)

 

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

 

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)

 

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

 

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

 

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

Date: November 19, 2012

/s/ Joanna Chmielewska

 

Joanna Chmielewska

 

President and Chief Financial Officer

 

 

 

  

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C.
§ 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Accredited Business Consolidators Corp.(the "Company") for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned President, and sole officer of the Company, certifies, to the best of her knowledge, information, and belief of the signatory, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)

 

The Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

 

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

/s/ Joanna Chmielewska

 

President and Chief Financial Officer

 

Date: November 19, 2012