AACS American Commerce Solutions Inc (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 10-Q

 

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the quarterly period ended November 30, 2014

 

¨	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 33-98682

 

American Commerce Solutions, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Florida		05-0460102
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

 

1400 Chamber Drive, Bartow, Florida 33830

(Address of Principal Executive Offices)

 

(863) 533-0326

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(g) of the Act:

 

$0.001 par value preferred stock		Over the Counter Bulletin Board
$0.002 par value common stock		Over the Counter Bulletin Board

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨   No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨   No x

 

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 ¨

 

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 (Section 232.405) during the preceding 12 months. Yes ¨   No x

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

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	¨	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 Act): Yes ¨   No x

 

As of January 9, 2015, the Registrant had 1,157,812,573 outstanding shares of its common stock, $0.002 par value.

 

Documents incorporated by reference: None

 

 

 

AMERICAN COMMERCE SOLUTIONS, INC.

 

FORM 10-Q — INDEX

 

Part I – Financial Information
Item 1.	Financial Statements			3
	Consolidated Balance Sheets			3
	Consolidated Statements of Comprehensive Loss			4
	Consolidated Statement of Changes in Stockholders’ Equity			5
	Consolidated Statements of Cash Flows			6
	Notes to Consolidated Financial Statements			7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation			12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			16
Item 4T.	Controls and Procedures			16
Part II – Other Information
Item 1.	Legal Proceedings			18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			18
Item 3.	Defaults Upon Senior Securities			18
Item 4.	Mine Safety Disclosures			18
Item 5.	Other Information			18
Item 6.	Exhibits			19
Signatures				20

 

2

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

 

AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

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					NOVEMBER 30, 2014				FEBRUARY 28, 2014
					(unaudited)
ASSETS
	CURRENT ASSETS:
		Cash			$	28,135			$	7,731
		Accounts receivable, net of allowance of $0 and $481, respectively				209,517				83,152
		Accounts receivable, factored				25,404				19,190
		Inventories				313,659				319,348
		Note receivable, related party				1,009,792				1,009,792
		Due from related party				485,107				485,107
		Other receivables, including related party receivables of $236,127 and $183,263, respectively				299,447				269,169
		Prepaid expenses				-				3,082
			Total Current Assets			2,371,061				2,196,571
		Property and equipment, net of accumulated depreciation of $2,957,386 and $2,821,551, respectively				2,530,960				2,655,230
	OTHER ASSETS:
		Other assets				4,885				4,578
		Investment, available for sale				61,573				-
			Total Other Assets			66,458				4,578
	TOTAL ASSETS				$	4,968,479			$	4,856,379
LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable, including related party payables of $0 and $13,500, respectively			$	68,040			$	122,383
		Accrued expenses, including related party balances of $28,359 and $28,024, respectively				38,761				62,655
		Accrued interest, including related party balances of $2,603 and $35,449, respectively				336,210				308,849
		Current portion of notes payable				247,797				246,460
			Total Current Liabilities			690,808				740,347
	LONG-TERM LIABILITIES:
		Notes payable, net of current portion				442,724				391,969
		Notes payable, related party, net of current portion				512,716				465,737
		Due to stockholders				1,543,810				1,669,510
			Total Long-Term Liabilities			2,499,250				2,527,216
		Total Liabilities				3,190,058				3,267,563
	STOCKHOLDERS' EQUITY
	Preferred stock; $0; 5,000,000 shares authorized:
		Series A; cumulative and convertible; $0.001 par value; 600 shares authorized
			102 shares issued and outstanding; liquidating preference $376,125			-				-
		Series B; cumulative and convertible; $0.001 par value; 3,950 shares authorized
			3,944 shares issued and outstanding; liquidating preference $3,944,617			3				3
	Common stock, $0.002 par value; 1,500,000,000 shares authorized; 1,157,812,573 and 1,036,243,946
	shares issued and 1,157,290,573 and 1,035,721,946 shares outstanding, respectively					2,315,626				2,072,489
	Additional paid-in capital					19,084,073				19,017,210
	Stock subscription receivable					(10,000	)			(10,000	)
	Accumulated other comprehensive loss					(41,620	)			-
	Accumulated deficit					(19,304,135	)			(19,225,360	)
						2,043,947				1,854,342
	Treasury stock at cost; 522,000 shares of common					(265,526	)			(265,526	)
		Total Stockholders' Equity				1,778,421				1,588,816
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	4,968,479			$	4,856,379

 

See notes to the unaudited financial statements

 

3

 

AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

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		For the Three Months Ended November 30,								For the Nine Months Ended November 30,
		2014				2013				2014				2013
REVENUE:
Net sales		$	599,957			$	627,456			$	1,683,179			$	1,999,715
			599,957				627,456				1,683,179				1,999,715
COST OF GOODS SOLD			316,180				293,252				811,294				932,248
GROSS MARGIN			283,777				334,204				871,885				1,067,467
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			319,379				329,937				998,084				1,072,561
(LOSS) INCOME FROM OPERATIONS			(35,602	)			4,267				(126,199	)			(5,094	)
OTHER INCOME (EXPENSE)
Other income (expense)			13,500				(11,045	)			97,602				(11,045	)
Interest expense			(24,413	)			(28,247	)			(67,849	)			(92,550	)
Interest income			6,250				4,354				17,671				12,324
TOTAL OTHER EXPENSE (INCOME)			(4,663	)			(34,938	)			47,424				(91,271	)
NET INCOME (LOSS)		$	(40,265	)		$	(30,671	)		$	(78,775	)		$	(96,365	)
Unrealized loss on fair value of investment			9,408				-				(41,620	)			-
COMPREHENSIVE INCOME (LOSS)		$	(30,857	)		$	(30,671	)		$	(120,395	)		$	(96,365	)
NET INCOME (LOSS) INCOME PER COMMON SHARE, BASIC AND DILUTED		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON  SHARES OUTSTANDING, BASIC AND DILUTED			1,035,721,946				747,351,624				1,035,721,946				691,509,667

  

See notes to the unaudited financial statements

 

4

 

AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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														Additional			Stock			Accumulated Other									Total
		Preferred Stock						Common Stock						Paid-In			Subscription			Comprehensive			Accumulated			Treasury			Stockholders'
		Shares			Amount			Shares			Amount			Capital			Receivable			Loss			Deficit			Stock			Deficit
Balance, February 28, 2013			3,944		$	3			663,622,066		$	1,327,245		$	18,908,713		$	(10,000	)	$	-		$	(19,056,299	)	$	(265,526	)	$	904,136
Issuance of shares of common stock for deposit on acquisition			-			-			10,000,000			20,000			1,000			-			-			-			-			21,000
Capital contribution from shareholder			-			-			-			-			21,000			-			-			-			-			21,000
Issuance of shares of common stock in conversion of debt			-			-			362,621,880			725,244			86,497			-			-			-			-			811,741
Net loss			-			-			-			-			-			-			-			(169,061	)		-			(169,061	)
Balance, February 28, 2014 (audited)			3,944		$	3			1,036,243,946		$	2,072,489		$	19,017,210		$	(10,000	)	$	-		$	(19,225,360	)	$	(265,526	)	$	1,588,816
Issuance of shares of common stock in conversion of debt			-			-			121,568,627			243,137			66,863			-			-			-			-			310,000
Unrealized loss on fair value of investment			-			-			-			-			-			-			(41,620	)		-			-			(41,620	)
Net loss for the nine months ended November 30, 2014 (unaudited)			-			-			-			-			-			-			-			(78,775	)		-			(78,775	)
Balance, November 30, 2014 (unaudited)			3,944		$	3			1,157,812,573		$	2,315,626		$	19,084,073		$	(10,000	)	$	(41,620	)	$	(19,304,135	)	$	(265,526	)	$	1,778,421

  

See notes to the unaudited financial statements

 

5

 

AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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					For the Nine Months Ended November 30,
					2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss				$	(78,775	)		$	(96,365	)
	Adjustments to reconcile net loss to net cash and cash equivalents									.
		used by operating activities:
			Depreciation			145,663				147,530
			Amortization of loan costs			3,082				23,769
			Loss on disposal of equipment			547				-
			Investment received for services			(82,500	)			-
			Unrealized loss on investment			(20,693	)			-
		(Increase) decrease in:
			Accounts receivable			(126,365	)			47,188
			Inventories			5,689				(30,059	)
			Other assets			(307	)			27,450
		Increase (decrease) in:
			Accounts payable and accrued expenses			(50,876	)			(156,633	)
	Net cash used by operating activities					(204,535	)			(37,120	)
CASH FLOWS FROM INVESTING ACTIVITIES:
	(Increase) decrease in other receivables					(30,278	)			11,334
	Acquisition of property and equipment					(21,940	)			(31,516	)
	Net cash used by investing activities					(52,218	)			(20,182	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Decrease (increase) in due from factor					(6,214	)			4,836
	Proceeds from notes payable and long-term debt					283,148				152,468
	Principal payments on notes payable					(174,077	)			(260,207	)
	Increase in due to stockholders					174,300				174,300
	Net cash provided by financing activities					277,157				71,397
Net increase in cash and cash equivalents						20,404				14,095
Cash and cash equivalents, beginning of period						7,731				21,751
Cash and cash equivalents, end of period					$	28,135			$	35,846
SUPPLEMENTAL CASH FLOW INFORMATION:
	Cash paid for interest				$	37,406			$	42,909
NON-CASH FINANCING AND INVESTING ACTIVITIES:
	Conversion of debt to equity				$	310,000			$	-
	Common stock issued for a deposit				$	-			$	21,000
	Capital contribution from shareholder				$	-			$	21,000

 

See notes to the unaudited financial statements

 

6

 

American Commerce Solutions, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

As of November 30, 2014 and for the

Three and Nine Months Ended November 30, 2014 and 2013

(unaudited)

 

1. BACKGROUND INFORMATION

 

American Commerce Solutions, Inc., located and operating in West Central Florida, was incorporated in Rhode Island in 1991 under the name Jaque Dubois, Inc., and was re-incorporated in Delaware in 1994. In July 1995, Jaque Dubois, Inc. changed its name to JD American Workwear, Inc. In December 2000, the stockholders voted at the annual stockholders meeting to change the name of JD American Workwear, Inc. to American Commerce Solutions, Inc. (the “Company”). In August of 2012, the Company was re-incorporated in Florida.

 

The Company is primarily a holding company with one wholly owned subsidiary; International Machine and Welding, Inc. is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment.

 

2. GOING CONCERN

 

The Company has incurred substantial operating losses since inception and has used approximately $205,000 of cash in operations for the nine months ended November 30, 2014. Additionally, the Company is in default on several notes payable. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, raise additional capital, and obtain debt financing.

 

Management has revised its business strategy to include expansion into other lines of business through the acquisition of other companies in exchange for the Company’s stock to facilitate manufacturing contracts under negotiation. In conjunction with the anticipated new contracts, management is currently negotiating new debt and equity financing, the proceeds from which would be used to settle outstanding debts at more favorable terms, to finance operations, and to complete additional business acquisitions. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern.

 

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

 

3. RECENT ACCOUNTING PRONOUNCEMENTS

 

In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.

 

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance; therefore there is no anticipation of any effect to the consolidated financial statements.

 

7

 

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure.

 

Recent accounting pronouncements issued by FASB (including EITF), the AICPA and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

4. FINANCIAL INSTRUMENTS

 

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

	·	Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
	·	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
	·	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of November 30, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, investments, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value.

 

8

 

5. STOCK BASED COMPENSATION

 

At November 30, 2014, the Company has two stock-based employee compensation plans, both which have been approved by the shareholders.

 

The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The value of each grant is estimated at the grant date using the Black-Scholes model. There were no options granted or exercised during the three months ended November 30, 2014 and 2013.

 

6. BASIS OF PRESENTATION

 

In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine month periods ended November 30, 2014 and 2013, (b) the financial position at November 30, 2014, and (c) cash flows for the nine month periods ended November 30, 2014 and 2013, have been made.

 

The unaudited consolidated financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in condensed financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes of the Company for the fiscal year ended February 28, 2014. The results of operations for the three and nine month periods ended November 30, 2014 are not necessarily indicative of those to be expected for the entire year.

 

7. ACCOUNTS RECEIVABLE, FACTORED

 

During the nine months ended November 30, 2014, the Company factored receivables of approximately $360,900. In connection with the factoring agreement, the Company incurred fees of approximately $2,500 and $2,300 during the three months ended November 30, 2014 and 2013, respectively. During the nine months ended November 30, 2014 and 2013, the Company incurred fees of approximately $11,300 and $11,600, respectively. Any and all of the Company’s indebtedness and obligations to the Factoring Company is guaranteed by two stockholders and collateralized by the Company’s inventory and fixed assets.

 

8. INVENTORIES

 

Inventories consist of the following:

 

		November 30, 2014				February 28, 2014
Work-in process		$	20,803			$	9,646
Finished goods			292,856				309,702
Raw materials			-				-
Total inventories		$	313,659			$	319,748

 

9

 

9. RELATED PARTY TRANSACTIONS

 

The following transactions with our officer’s, in the aggregate amount of $310,000 and 121,568,627 shares of common stock, were reported in Form S8 as filed with the Securities and Exchange Commission on May 1, 2014:

 

During the nine months ended November 30, 2014, two executives who are stockholders of the Company deferred $174,300 of compensation earned during this period. The balance due to stockholders at November 30, 2014 and 2013, totaled $1,543,810 and $2,011,410, respectively. The amounts are unsecured, non-interest bearing, and have no specific repayment terms; however, the Company does not expect to repay these amounts within the next year. During the nine months ended November 30, 2014, the Company issued 58,823,529 shares of common stock to each of the executives valued at $0.00255, in exchange for the reduction $300,000 of deferred compensation.

 

In April 2014, the Company exchanged $10,000 of debt due to the related parties for 3,921,569 shares of common stock. The shares were valued at $0.00255 per share.

 

Certain notes to related parties have conversion features, whereby, at the holder’s option, the notes may be converted, in whole or in part upon written notice, into the Company’s common shares at a discount to the fair market value. The Company considered the value of the beneficial conversion features of the notes, and when deemed material, recorded the beneficial conversion value as deferred financing costs and amortized the amount over the period of the loan, charging interest expense. The convertible notes are to related parties, who have the majority of the voting rights. The related parties have waived their conversion rights since the inception of these notes until such time that the Company’s market price of shares rise sufficiently or the Company amends the capital structure (through a reverse split or increase in the authorized shares) or combination of all factors, whereby a conversion of any single note, or portion thereof, will not exceed the authorized shares of the Company.

 

The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable transactions been entered into with independent parties.

 

10. SEGMENT INFORMATION

 

The Company had two reportable segments during 2014 and 2013; manufacturing and other. For the three months ended November 30, 2014 and 2013 the Company has included segment reporting.

 

For the three months ended November 30, 2014, information regarding operations by segment is as follows:

 

		Manufacturing				Other (a)				Total Continuing Operations
Revenue		$	599,957			-				$	599,957
Interest expense		$	17,636				6,777				24,413
Depreciation		$	49,499				-				49,499
Net income (loss)		$	26,377				(66,642	)			(40,265	)
Property and equipment, net of accumulated depreciation		$	2,530,960				-				2,530,960
Segment assets		$	3,362,625				1,605,854				4,968,479

 

10

 

For the three months ended November 30, 2013, information regarding operations by segment is as follows:

 

		Manufacturing				Other (a)				Total Continuing Operations
Revenue		$	627,456							$	627,456
Interest expense		$	16,570				11,677				28,247
Depreciation		$	49,177				-				49,177
Net income (loss)		$	86,946				(117,617	)			(30,671	)
Property and equipment, net of accumulated depreciation		$	2,659,814				-				2,659,814
Segment assets		$	3,406,541				1,590,134				4,996,675

 

For the nine months ended November 30, 2014, information regarding operations by segment is as follows:

 

		Manufacturing				Other (a)				Total Continuing Operations
Revenue		$	1,683,179			-				$	1,683,179
Interest expense		$	47,211				20,638				67,849
Depreciation		$	145,663				-				145,663
Net income (loss)		$	93,768				(172,543	)			(78,775	)

 

For the nine months ended November 30, 2013, information regarding operations by segment is as follows:

 

		Manufacturing				Other (a)				Total
Revenue		$	1,999,715			-				$	1,999,715
Interest expense		$	52,343				40,207				92,550
Depreciation		$	147,530				-				147,530
Net income (loss)		$	257,766				(354,131	)			(96,365	)

 

(a)	The “other” segment is mainly related to the holding company expenses and general overhead, as well as the stock based compensation awards.

 

Segment 1, manufacturing, consists of International Machine and Welding, Inc. and derives its revenues from machining operations, sale of parts and service.

 

The manufacturing segment, International Machine and Welding, Inc. has a broad and diverse base of customers. The segment does have a significant customer which accounts for 50% of total sales; the loss of this customer would have a material adverse effect on the segment. Also, this segment generates a significant amount of revenues from sales and services provided to three different industries.

 

11

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

 

This FILING contains forward-looking statements. The words “anticipated,” “believe,” “expect,” “plan,” “intend,” “seek,” “estimate,” “project,” “will,” “could,” “may,” and similar expressions are intended to identify forward-looking statements. These statements include, among others, information regarding future operations, future capital expenditures, and future net cash flow. Such statements reflect the Company’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, general economic and business conditions, changes in foreign, political, social, and economic conditions, regulatory initiatives and compliance with governmental regulations, the ability to achieve further market penetration and additional customers, and various other matters, many of which are beyond the Company’s control. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially and adversely from those ANTICIPATED, believed, estimated, or otherwise indicated. Consequently, all of the forward-looking statements made in this FILING are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

 

The Company cautions readers that in addition to important factors described elsewhere, the following important facts, among others, sometimes have affected, and in the future could affect, the Company’s actual results, and could cause the Company’s actual results during the year ended February 28, 2015 and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.

 

This Management’s Discussion and Analysis or Plan of Operation presents a review of the consolidated operating results and financial condition of the Company for the three and nine month periods ended November 30, 2014 and 2013. This discussion and analysis is intended to assist in understanding the financial condition and results of operation of the Company and its subsidiary. This section should be read in conjunction with the consolidated financial statements and the related notes.

 

RESULTS OF OPERATIONS

 

MANUFACTURING SEGMENT

 

The manufacturing subsidiary, International Machine and Welding, Inc., generates its revenues from three divisions. Division 1 provides specialized machining and repair services to heavy industry and original equipment manufacturers. Division 2 provides repair and rebuild services on heavy equipment used in construction and mining as well as sales of used equipment. Division 3 provides parts sales for heavy equipment directly to the customer. The primary market of this segment is the majority of central and south Florida with parts sales expanding its market internationally. The current operations can be significantly expanded using the 38,000 square foot structure owned by International Machine and Welding, Inc.

 

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2014 AND 2013

 

General

 

The Company’s consolidated net sales decreased to $599,957 for the three months ended November 30, 2014, a decrease of $27,499 or 4%, from $627,456 for the three months ended November 30, 2013. Management believes the decrease is due to changes in the construction industry as machines are between their life cycles.

 

Gross profit for the consolidated operations decreased to $283,777 for the three months ended November 30, 2014 from $335,494 for the three months ended November 30, 2013. Gross profit as a percentage of sales was 47% for the three months ended November 30, 2014 a decrease of 8% from 55% for the three months ended November 30, 2013.

 

12

 

Consolidated selling, general and administrative expenses decreased to $319,379 for the three months ended November 30, 2014 from $329,937 for the three months ended November 30, 2013, a decrease of $10,558 or 3%. The decrease was due to a decrease in outside services, legal expenses and loan costs.

 

Consolidated interest expense for the three months ended November 30, 2014 was $24,413 compared to $28,247 for the three months ended November 30, 2013. The decrease of $3,834 or 14% is primarily due to the decrease in notes payable.

 

Consolidated interest income for the three months ended November 30, 2014 was $6,250 compared to $4,354 for the three months ended November 30, 2013. The increase of $1,896 or 44% is primarily due to the increase in other receivables.

 

The Company incurred net consolidated loss of $40,265 for the three months ended November 30, 2014 compared to a net loss of $30,671 for the three months ended November 30, 2013. The increase in net loss is primarily due to the decrease in sales.

 

Manufacturing Segment

 

The manufacturing operation, International Machine and Welding, Inc. provided net sales of $599,957 for the three months ended November 30, 2014 compared to $627,456 for the three months ended November 30, 2013. The machining operations provided $184,907 or 31% of net sales with parts and service providing $415,050 or 69% of net sales for the three months ended November 30, 2014 as compared to machining operations contributing $173,245 or 28% of net sales with parts and service providing $454,212 or 72% of net sales for the three months ended November 30, 2013.

 

Gross profit from International Machine and Welding, Inc. was $283,777 for the three months ended November 30, 2014 compared to $334,204 during the three months ended November 30, 2013 providing gross profit margins of 53%, for the three months ended November 30, 2014 as compared to 47% for the same period ended November 30, 2013.

 

Selling, general and administrative expenses for International Machine and Welding, Inc. were $240,345 for the three months ended November 30, 2014 compared to $236,648 for the three months ended November 30, 2013.

 

Interest expense was $17,636 for the three months ended November 30, 2014 compared to $16,750 for the three months ended November 30, 2013. The increase in interest expense is primarily due to an increase in notes payable.

 

The Company does not have discrete financial information on each of the three manufacturing divisions, nor does the Company make decisions on the divisions separately; therefore they are not reported as segments.

 

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED NOVEMBER 30, 2014 AND 2013

 

General

 

The Company’s consolidated net sales decreased to $1,683,179 for the nine months ended November 30, 2014, a decrease of $316,536 or 16%, from $1,999,715 for the nine months ended November 30, 2013. Management believes the decrease is due to changes in the construction industry as machines are between their life cycles.

 

13

 

Gross profit for the consolidated operations decreased to $871,885 for the nine months ended November 30, 2014 from $1,067,467 for the nine months ended November 30, 2013. Gross profit as a percentage of sales decreased to 52% for the nine months ended November 30, 2014 from 53% for the nine months ended November 30, 2014.

 

Consolidated selling, general and administrative expenses decreased to $998,084 for the nine months ended November 30, 2014 from $1,072,561 for the nine months ended November 30, 2013, a decrease of $74,477 or 7%. The decrease was due to a decrease in outside services, tools, legal expenses and loan costs.

 

Consolidated interest expense for the nine months ended November 30, 2014 was $67,849 compared to $92,550 for the nine months ended November 30, 2013. The decrease of $24,701 or 27% is primarily due to the decrease in notes payable.

 

Consolidated interest income for the nine months ended November 30, 2014 was $17,671 compared to $12,324 for the nine months ended November 30, 2013. The increase of $5,347 or 43% is primarily due to the increase in other receivables.

 

The Company incurred net consolidated loss of $78,775 for the nine months ended November 30, 2014 compared to a net loss of $96,365 for the nine months ended November 30, 2013. The decrease in net loss is primarily due to the decrease in sales, net of the other income and the decrease in selling, general and administrative expenses and interest expense.

 

Manufacturing Segment

 

The manufacturing operation, International Machine and Welding, Inc. provided net sales of $1,683,179 for the nine months ended November 30, 2014 compared to $1,999,715 for the nine months ended November 30, 2013. The machining operations provided $184,907 or 31% of net sales with parts and service providing $415,050 or 69% of net sales for the nine months ended November 30, 2014 as compared to machining operations contributing $592,833 or 30% of net sales with parts and service providing $1,406,882 or 70% of net sales for the nine months ended November 30, 2013.

 

Gross profit from International Machine and Welding, Inc. was $871,885 for the nine months ended November 30, 2014 compared to $1,067,467 during the nine months ended November 30, 2013 providing gross profit margins of 52%, for the nine months ended November 30, 2014 as compared to 53% for the same period ended November 30, 2013.

 

Selling, general and administrative expenses for International Machine and Welding, Inc. were $734,058 for the nine months ended November 30, 2014 compared to $763,321 for the nine months ended November 30, 2013.

 

Interest expense was $47,211 for the nine months ended November 30, 2014 compared to $52,343 for the nine months ended November 30, 2013. The decrease in interest expense is primarily due to a reduction in notes payable.

 

The Company does not have discrete financial information on each of the three manufacturing divisions, nor does the Company make decisions on the divisions separately; therefore they are not reported as segments.

 

LIQUIDITY AND CAPITAL RESOURCES

 

During the nine months ended November 30, 2014 and 2013, the Company used net cash for operating activities of $204,535 and $37,120, respectively.

 

During the nine months ended November 30, 2014 and 2013, the Company used funds for investing activities of $52,218 and $20,182, respectively. The increase in cash used for investing activities is primarily due to the increase in other receivables.

 

14

 

During the nine months ended November 30, 2014 and 2013, the Company provided cash from financing activities of $277,157 and $71,397, respectively. The increase in net cash provided by financing activities is due to the increase in proceeds from the issuance of notes payable.

 

Cash flows from financing activities provided for working capital needs and principal payments on long-term debt through fiscal 2015. To the extent that the cash flows from financing activities are insufficient to finance the Company’s anticipated growth, or its other liquidity and capital requirements during the next twelve months, the Company will seek additional financing from alternative sources including bank loans or other bank financing arrangements, other debt financing, the sale of equity securities (including those issuable pursuant to the exercise of outstanding warrants and options), or other financing arrangements. However, there can be no assurance that any such financing will be available and, if available, that it will be available on terms favorable or acceptable to the Company.

 

Although management has reduced debt, new financing to finance operations and to facilitate additional production is still being sought. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern.

 

SEASONALITY

 

The diversity of operations in the manufacturing segment protects it from seasonal trends except in the sales of agricultural processing where the majority of the revenue is generated while the processors await the next harvest.

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

The accompanying consolidated financial statements include the activity of the Company and its wholly owned subsidiary. All intercompany transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company reviews its estimates, including but not limited to, recoverability of long-lived assets, recoverability of prepaid expenses and allowance for doubtful accounts, on a regular basis and makes adjustments based on historical experiences and existing and expected future conditions. These evaluations are performed and adjustments are made as information is available. Management believes that these estimates are reasonable; however, actual results could differ from these estimates.

 

We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.

 

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our estimate on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. If the financial condition of our customers were to deteriorate, additional allowances may be required.

 

We value our inventories at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out method; market is determined based on net realizable value. We write down inventory balances for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

 

We value our property and equipment at cost. Amortization and depreciation are calculated using the straight-line and accelerated methods of accounting over the estimated useful lives of the assets. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

 

15

 

Fair value estimates used in preparation of the consolidated financial statements are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts receivable, accounts payable, and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company’s notes payable is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.

 

NEW ACCOUNTING PRONOUNCEMENTS

 

For a description of recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial statements, see “Note 3: Recent Accounting Pronouncements” in Part I, Item 1 of this Form 10-Q.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4(T). CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of November 30, 2014, our internal disclosure controls and procedures were not effective due to material weaknesses in the system of internal control. A material weakness is a deficiency, or combination of deficiencies, that creates a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected in a timely manner.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

The material weaknesses assessed by our management were (1) we have not implemented measures that would prevent the chief executive officer and the chief financial officer from overriding the internal control system and (2) our board of directors has determined that our audit committee does not have an independent “financial expert” as such term is defined under federal securities law. We do not believe that these material weaknesses have resulted in deficient financial reporting because both the chief executive officer and the chief financial officer are aware of their responsibilities under the SEC’s reporting requirements and they both personally certify our financial reports.

 

16

 

Management's Report on Internal Control over Financial Reporting

 

Accordingly, while we have identified material weaknesses in our system of internal control over financial reporting, we believe we have taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Our management has determined that current resources would be appropriately applied elsewhere and when resources permit, it will address and remediate material weaknesses through implementing various controls or changes to controls. At such time as we have additional financial resources available to us, we intend to enhance our controls and procedures. We will not be able to assess whether the steps we intend to take will fully remedy the material weakness in our internal control over financial reporting until we have fully implemented them and sufficient time passes in order to evaluate their effectiveness.

 

Material weaknesses assessed by our management were (1) we have not implemented measures that would prevent the chief executive officer and the chief financial officer from overriding the internal control system and (2) our board of directors has determined that our audit committee does not have an independent “financial expert” as such term is defined under federal securities law. We do not believe that these material weaknesses have resulted in deficient financial reporting because both the chief executive officer and the chief financial officer are aware of their responsibilities under the SEC’s reporting requirements and they both personally certify our financial reports.

 

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. Our internal control over financial reporting is designed 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.

 

Limitations on the Effectiveness of Controls

 

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the three months ended November 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Auditor’s Report on Internal Control over Financial Reporting

 

This Quarterly Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report.

 

17

 

PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the three months ended November 30, 2014, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The Company has defaulted on a total of $507,051 of notes payable. The amount of principal payments in arrears was $216,988 with an additional amount of $290,063 of interest due at November 30, 2014. These defaults are the result of a failure to pay in accordance with the terms agreed.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER MATTERS

 

None.

 

18

  

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

 

EXHIBIT INDEX

 

Incorporated Documents		SEC Exhibit Reference		Sequentially Numbered
		Certification of the Chief Financial Officer		31.1
		Certification of the Chief Executive Officer		31.2
		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbaenes-Oxley Act of 2002 of the Chief Financial Officer		32.1
		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbaenes-Oxley Act of 2002 of the Chief Executive Officer		32.2
		XBRL Instance Document		101.INS **
		XBRL Taxonomy Extension Schema Document		101.SCH **
		XBRL Taxonomy Extension Calculation Linkbase Document		101.CAL **
		XBRL Taxonomy Extension Definition Linkbase Document		101.DEF **
		XBRL Taxonomy Extension Label Linkbase Document		101.LAB **
		XBRL Taxonomy Extension Presentation Linkbase Document		101.PRE **

________________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

(b) Reports on Form 8-K

 

None

 

19

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

	AMERICAN COMMERCE SOLUTIONS, INC.
Date: January 14, 2015	By:	/s/ Daniel L. Hefner
		Daniel L. Hefner President
Date: January 14, 2015	By:	/s/ Frank D. Puissegur
		Frank D. Puissegur CFO and Chief Accounting Officer

 

 

20

---

 

EXHIBIT 31.1

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002 

AND RULE 13A-14 OF THE EXCHANGE ACT OF 1934

 

CERTIFICATION

 

I, Frank D. Puissegur, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of American Commerce Solutions, Inc.;

 

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.

The registrant’s other certifying officer(s) and I are 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) and 15d – 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, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 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; and
	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 (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the 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: January 14, 2015	By:	/s/ Frank D. Puissegur
		Frank D. Puissegur
		Chief Financial Officer (Principal Financial Officer) and Director

 

EXHIBIT 31.2

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002 

AND RULE 13A-14 OF THE EXCHANGE ACT OF 1934

 

CERTIFICATION

 

I, Daniel L. Hefner, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of American Commerce Solutions, Inc.;

 

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.

The registrant’s other certifying officer(s) and I are 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) and 15d – 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, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 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; and
	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 (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the 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: January 14, 2015	By:	/s/ Daniel L. Hefner
		Daniel L. Hefner
		Chief Executive Officer, President and Director

 

EXHIBIT 32.1

 

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER 

PURSUANT TO 18 U.S. C. SECTION 1350 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of American Commerce Solutions, Inc. (the "Company") on Form 10-Q for the period ended November 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Frank D. Puissegur, Chief Financial Officer (Principal Financial Officer) and Director of the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

	(1)	The Report fully 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.

 

 

Date: January 14, 2015	By:	/s/ Frank D. Puissegur
		Frank D. Puissegur
		Chief Financial Officer (Principal Financial Officer) and Director

 

EXHIBIT 32.2

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER 

PURSUANT TO 18 U.S. C. SECTION 1350 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of American Commerce Solutions, Inc., (the "Company") on Form 10-Q for the period ended November 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel L. Hefner, Chief Executive Officer, President and Director of the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

	(1)	The Report fully 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.

 

 

Date: January 14, 2015	By:	/s/ Daniel L. Hefner
		Daniel L. Hefner
		Chief Executive Officer, President and Director