<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
------------------------------------------------
or
[ ] 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: 0-19814
ABS Group Inc.
(Exact name of registrant as specified in its charter)
Delaware 87-0462198
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
818 East South Temple Street, Salt Lake City, Utah 84102
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(801) 521-8000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
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) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [x] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
The number of shares outstanding of each of the registrant's classes of common
stock, as of November 11, 1997 is 3,990,563 shares, all of one class of $.0001
par value common stock.
-1-
<PAGE> 2
TABLE OF CONTENTS
Page No.
--------
PART I
Item 1. Financial Statements 3-11
Item 2. Management's Discussion and Analysis 12-15
PART II
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a
Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
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<PAGE> 3
[JONES, JENSEN & COMPANY
LETTERHEAD]
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
ABS Group Inc.
Salt Lake City, Utah
The accompanying consolidated balance sheet of ABS Group Inc. (a development
stage company) as of September 30, 1997 and the related consolidated statements
of operations, and cash flows for the three months and nine months ended
September 30, 1997 and 1996 and from inception on October 3, 1988 through
September 30, 1997 were not audited by us and, accordingly, we do not express
an opinion on them. The accompanying consolidated balance sheet as of December
31, 1996 was audited by us and we expressed an unqualified opinion on it in our
report dated March 27, 1997.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
November 8, 1997
3
<PAGE> 4
ABS GROUP INC.
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
------
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 8,426 $ 65,977
Accounts receivable 61,491 30,293
Inventories 173,415 87,992
Prepaid expenses 4,553 2,060
Note receivable, related party (Note 2) 11,500 --
---------- ----------
Total Current Assets 259,385 186,322
---------- ----------
FIXED ASSETS 183,643 107,593
---------- ----------
OTHER ASSETS
Investment in joint venture (Note 4) 865,886 698,953
Patents/intellectual property 671,970 724,334
Deposits 5,645 12,997
Goodwill 190,149 205,566
---------- ----------
Total Other Assets 1,733,650 1,641,850
---------- ----------
TOTAL ASSETS $2,176,678 $1,935,765
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
ABS GROUP INC.
(A Development Stage Company)
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable - trade $ 407,712 $ 335,395
Notes payable 75,000 100,564
Accrued interest 11,812 --
------------ -----------
Total Current Liabilities 494,524 435,959
------------ -----------
LONG-TERM LIABILITIES
Notes payable 200,000 200,000
------------ -----------
Total Liabilities 694,524 635,959
------------ -----------
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 90,233 132,141
------------ -----------
COMMITMENTS AND CONTINGENCIES -- --
------------ -----------
STOCKHOLDERS' EQUITY
Common stock, 10,000,000 shares authorized
at $0.0001 par value; 3,850,478 and
3,293,935 shares issued and outstanding,
respectively 387 329
Capital in excess of par value 12,430,951 10,891,924
Foreign currency translation 7,048 9
Deficit accumulated during the development
stage (11,046,465) (9,724,597)
------------ -----------
Total Stockholders' Equity 1,391,921 1,167,665
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,176,678 $ 1,935,765
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
ABS GROUP INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE NINE FROM INCEPTION
MONTHS ENDED MONTHS ENDED ON OCTOBER 3,
SEPTEMBER 30, SEPTEMBER 30, 1988 THROUGH
----------------------- ----------------------- SEPTEMBER 30,
1997 1996 1997 1996 1997
--------- ----------- ------------ -------- --------------
<S> <C> <C> <C> <C> <C>
SALES $ 96,759 $ -- $ 262,056 $ -- $ 279,859
COST OF SALES 43,284 -- 160,500 -- 165,709
--------- ---------- ----------- -------- -----------
GROSS MARGIN 53,475 -- 101,556 -- 114,150
--------- ---------- ----------- -------- -----------
EXPENSES
Depreciation and amortization 20,723 -- 60,649 -- 67,494
Rent 6,083 10,000 52,339 10,000 64,339
Research and development 3,219 -- 19,867 -- 20,447
General and administrative 291,429 134,034 1,237,999 134,034 2,506,253
-------- -------- ---------- -------- ----------
Total Expenses 321,454 144,034 1,370,854 144,034 2,658,533
-------- -------- ---------- -------- ----------
LOSS FROM OPERATIONS (267,979) (144,034) (1,269,298) (144,034) (2,544,383)
-------- -------- ---------- -------- ----------
LOSS INCOME (EXPENSE)
Interest income 2 -- 498 -- 597
Interest expense (8,826) (662) (12,517) (662) (13,498)
Loss on investment (52,701) 837 (82,460) -- (108,497)
-------- -------- ---------- ------- ----------
Total Other Income
(Expense) (61,525) 175 (94,479) (662) (121,398)
-------- -------- ---------- ------- ----------
LOSS BEFORE
DISCONTINUED
OPERATIONS AND
MINORITY INTEREST (329,504) (143,859) (1,363,777) (144,696) (2,665,781)
LOSS ON DISCONTINUED
OPERATIONS -- -- -- (79,355) (8,424,201)
MINORITY INTEREST
IN LOSS 15,805 -- 41,908 -- 43,517
-------- -------- --------- -------- ----------
NET LOSS $(313,699) $(143,859) $(1,321,869) $(224,051) $(11,046,465)
========= ========= =========== ========= ============
NET LOSS PER SHARE $ (0.08) $ (0.23) $ (0.37) $ (0.36)
========= ========= =========== =========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 3,795,376 891,930 3,564,707 891,152
========= ========= =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
ABS GROUP INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Three For the Nine From Inception
Months Ended Months Ended on October 3,
September 30, September 30, 1988 Through
------------------ ------------------- September 30,
1997 1996 1997 1996 1997
-------- ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss from operations $(313,699) $(143,859) $(1,321,869) $(224,051) $(11,046,465)
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 20,723 - 60,649 - 70,524
Stock and options issued
for services rendered 1,500 100,150 474,433 100,150 1,429,533
Loss on investment in
joint venture 52,701 - 83,067 - 108,497
Stock issued in settlement
of debt - - - 20,100 1,413,320
Loss on disposition of assets - - - - 3,206,791
Foreign currency translation - - - - 127
Minority interest in loss (15,805) - (41,908) - (41,908)
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable (15,856) - (38,198) - (55,295)
(Increase) decrease in
inventory (36,038) - (106,423) - (147,098)
(Increase) decrease in
prepaid assets (4,553) - (2,493) - (2,493)
(Increase) decrease in
deposits 26,952 - 7,352 - 7,352
(Increase) decrease in
related party receivables 8,000 - (11,500) - (11,500)
Increase (decrease) in
accounts payable 153,002 13,722 70,998 (11,703) 326,398
Increase (decrease) in
accrued interest 7,874 - 11,812 - 11,812
--------- -------- --------- -------- -----------
Net Cash Provided (Used)
by Operating Activities $(115,199) $(29,987) $(814,080) $115,504 $(4,730,405)
--------- -------- --------- -------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
ABS GROUP INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Three For the Nine From Inception
Months Ended Months Ended on October 3,
September 30, September 30, 1988 Through
-------------------------- ------------------------- September 30,
1997 1996 1997 1996 1997
------------ ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
INVESTING ACTIVITIES
Investments in joint venture..... $ -- $ -- $ (250,000) $ -- $ (550,000)
Cash acquired through invest-
ment in subsidiary............. -- -- -- -- 2,022
Purchase of subsidiaries......... -- -- -- -- (108,731)
Purchase of product marketing
rights......................... -- -- -- -- (1,250)
Purchase of fixed assets......... -- -- (99,264) -- (110,048)
Purchase of promotional video.... -- -- -- -- (50,000)
Capitalized patent costs......... (7,370) -- (21,737) -- (21,737)
-------- ------- ---------- -------- ----------
Net Cash Provided (Used)
by Investing Activities...... (7,370) -- (371,001) -- (839,744)
-------- ------- ---------- -------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Capital contributed by
shareholder.................... -- 25,000 -- 25,000 25,000
Proceeds from loans.............. 50,000 5,000 50,000 5,000 448,140
Repayment of loans............... -- -- (75,564) -- (75,564)
Proceeds from sale of
common stock................... 30,000 -- 1,153,094 40,000 5,180,999
-------- ------- ---------- -------- ----------
Net Cash Provided (Used)
by Financing Activities...... 80,000 30,000 1,127,530 70,000 5,578,575
-------- ------- ---------- -------- ----------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS.................... (42,569) 13 (57,551) (45,504) 8,426
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF PERIOD............ 50,995 81 65,977 45,598 --
-------- ------- ---------- -------- ----------
CASH AND CASH
EQUIVALENTS AT END
OF PERIOD...................... $ 8,426 $ 94 $ 8,426 $ 94 $ 8,426
======== ======= ========== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
ABS GROUP INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Three For the Nine From Inception
Months Ended Months Ended on October 3,
September 30, September 30, 1988 Through
---------------- ------------------- September 30,
1997 1996 1997 1996 1997
------ ------ -------- ------ -------------
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ - $ - $ - $ - $ 711
Income taxes paid $ - $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Stock issued for note $ - $ - $ - $ - $2,498,750
Purchase of Bioreactors through assignment of note $ - $ - $ - $ - $2,150,000
Acquisition of product marketing rights through
issuance of notes and stock $ - $ - $ - $ - $2,200,000
Stock issued in settlement of debt $ - $ - $ - $ - $1,560,818
Stock and options issued for services rendered $1,500 $ - $474,433 $ - $1,429,533
Stock issued for acquisition of subsidiary $ - $ - $ - $ - $ 500,138
Stock issued for investment in joint venture $ - $ - $ - $ - $ 425,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 10
ABS GROUP INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 1997 and December 31, 1996
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Certain information and footnotes disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
Registrant's December 31, 1996 Annual Report on Form 10-KSB. The
results of operations for the periods ended September 30, 1997 and 1996
are not necessarily indicative of operating results for the full years.
The consolidated financial statements and other information furnished
herein reflect all adjustments which are, in the opinion of management
of the Registrant, necessary for a fair presentation of the results of
the interim periods covered by this report.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the three months ended March 31, 1997, the Company advanced
$19,500 to a Company controlled by an officer of the Company. During
the three months ended September 30, 1997 $8,000 was repaid to the
Company. The balance bears interest at 10% per annum and was due
September 30, 1997. The due date has been extended to December 31,
1997.
NOTE 3 - STOCK OPTIONS
During the three months ended September 30, 1997, a total of 10,000
stock options were exercised at an exercise price of $0.15 per share.
No new options were issued.
NOTE 4 - INVESTMENT IN JOINT VENTURE
During the three months ended September 30, 1997, the Company made no
additional advances to DBD Company, LLC. (DBD), having previously
advanced $250,000 to DBD through June 30, 1997. The financial
statements reflect the Company's share of DBD's loss which is $52,701.
Financial information for DBD is as follows:
10
<PAGE> 11
ABS GROUP INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 1997 and December 31, 1996
(Unaudited)
NOTE 4 - INVESTMENT IN JOINT VENTURE (Continued)
<TABLE>
<CAPTION>
June 30,
1997
---------
<S> <C>
Assets:
Cash $ 65,820
Prepaid expense 75,000
---------
Total Assets $ 140,820
=========
Liabilities and equity:
Liabilities:
Accounts payable and accrued expenses $ 13,606
---------
Equity:
Capital 400,000
Accumulated deficit (272,786)
---------
Total Equity 127,214
---------
Total Liabilities and Equity $ 140,820
=========
</TABLE>
<TABLE>
<CAPTION>
For the For the
Three Months Nine Months
Ended Ended
September 30, June 30,
1997 1997
------------- -----------
<S> <C> <C>
Gross revenue $ - $ -
Costs of sales and operational expenses 131,753 207,669
--------- ---------
Net loss $(131,753) $(207,669)
========= =========
Company interest in net loss $ (52,701) $ (83,068)
========= =========
</TABLE>
Comparative results of operations for 1996 have not been presented as DBD was
not formed until September of 1996.
11
<PAGE> 12
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company's intentions as heretofore expressed in its Form 10-KSB for
year ended December 31, 1996 is to become a diversified public company through
the acquisition or financing of opportunities with emerging bio-medical
technology firms where (a) research and development stages have been basically
completed, (b) intellectual property is protected by patents, licenses,
registration and/or proprietary formulas or processes, (c) products and/or
services are deemed unique and/or desirable and (d) Company's management and
marketing skills and financial resources are envisioned to be a valuable asset
to the overall operation(s) (present and/or proposed) of the acquired firm(s) -
all with the ultimate objective of benefitting the Company's stockholders.
Reference is herewith made to Item 1 to aforesaid Form 10-KSB as well as to the
consolidated financial statements and notes thereto as contained therein which
summarize relevant information with respect to the Company's initial joint
venture with Biopharmaceutics, Inc. (entered into in September 1996) and its
subsequent acquisitions in November and December 1996 (of the subsidiaries
hereinafter referred to) as well as the various monetary and other obligations
assumed as a result thereof.
The consolidated financial statements include those of ABS Group Inc.
and its subsidiaries, Future Medical Technologies, Inc. ("FMT"), Marine Research
USA, Inc. ("MRUSA") and Marine Research Pty. Ltd. ("MRPL").
This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity/cash flows of
the Company as at quarter ended September 30, 1997 and year ended December 31,
1996 with respect to the Company's consolidated balance sheets and the
comparative three month periods ended September 30, 1997 and September 30, 1996
and nine month periods ended September 30, 1997 and September 30, 1996 (as well
as the period from inception in October 1988 through September 30, 1997) based
upon information appearing in the Company's consolidated statements of
operations and related financial statements and should be read in conjunction
with such unaudited consolidated financial statements.
The discussion appearing hereinafter with respect to the consolidated
statements of operations does not contain comparable information and no analysis
of same is being given herein since it is not properly susceptible to narrative
comparison by virtue of the fact that as heretofore indicated in Item 1 of the
Company's aforesaid Form 10-KSB for its year ended December 31, 1996, the
Company was basically inactive from the time that it discontinued operations in
1992 until the time that it was reactivated during late 1996, having entered
into its initial new business venture (referred to in the first paragraph
hereto) in September 1996. See Note 4 hereto regarding the investment made by
the Company in such new
-12-
<PAGE> 13
business-joint venture. For reasons comparable to those heretofore stated
directly above, no comparable information is provided herein with respect to the
Company's consolidated balance sheet.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1997 AND SEPTEMBER 30, 1996:
Quarters Ended September 30, 1997 and September 30, 1996
Sales for the three month period ended September 30, 1997 were $96,759
while cost of sales amounted to $43,284 resulting in a gross margin for the
three month period ended September 30, 1997 of $53,475. Total expenses amount to
$321,454 of which general and administrative expenses of $291,429 accounted for
approximately 91% thereof. Primarily as a result of the above, the net loss for
the three month period ended September 30, 1997 was $(313,699) (as compared to a
net loss of $(143,859) for the comparative three month period ended September
30, 1996).
The most recent net loss increased the Company's deficit accumulated
during development stage to $(11,046,465) as at September 30, 1997.
As heretofore indicated the Company was inactive throughout the major
portion of the three month period ended September 30, 1996 and during such three
month period incurred general and administrative expenses of $134,034 as
compared to $291,429 for the comparative three month period ended September 30,
1996.
Nine Month Periods Ended September 30, 1997 and September 30, 1996
Sales for the nine month period ended September 30, 1997 were $262,056
while cost of sales amounted to $169,500 resulting in a gross margin for the
nine month period ended September 30, 1997 of $101,556. Total expenses amount to
$1,370,854 of which general and administrative expenses of $1,237,999 accounted
for approximately 90% thereof. Approximately 38% of such general and
administrative expenses were directly attributable to Company issuance of stock
options to purchase up to 215,000 shares of Company common stock at exercise
prices below market value. The difference between the exercise price of the
stock options and the market value of the Company's common stock was $472,953.
Primarily as a result of the above, the net loss for the nine month period ended
September 30, 1997 was $(1,321,869) as compared to a net loss of $(224,051) for
the comparative nine month period ended September 30, 1996.
As heretofore indicated the Company was inactive throughout the major
portion of
-13-
<PAGE> 14
the nine month period ended September 30, 1996 and during such nine month period
incurred general and administrative expenses of $134,034 (all of which were
incurred during the three month period ended September 30, 1996) as compared to
$1,237,999 for the comparative nine month period ended September 30, 1996.
CONSOLIDATED BALANCE SHEETS AS AT SEPTEMBER 30, 1997:
Total assets of the Company at quarter ended September 30, 1997 were
$2,176,678 of which a $865,886 investment in joint venture and $671,970
patents/intellectual property accounted for approximately 40% and 31% thereof.
Total current assets amounted to $259,385 while total current liabilities
amounted to $494,524 thereby creating a working capital deficit of $235,139.
The aforesaid current liabilities of $494,524 consisted of accounts
payable-trade of $407,712, the current portion of notes payable of $75,000 and
accrued interest of $11,812. The long term portion of such notes payable - to
wit: $200,000 is the only long term liability of the Company and, accordingly,
total liabilities as at September 30, 1997 amounted to $694,524.
As at September 30, 1997 the Company's accumulated deficit amounted to
$(11,046,465) while total stockholders' equity amounted to $1,391,921.
CASH REQUIREMENTS AND LIQUIDITY
During calendar year ended December 31, 1996, the Company had been able
to satisfy its cash requirements and raise the necessary capital in order to
finance its proposed growth and acquisition program through the sale and
issuance of approximately 470,000 shares of its common stock for a cash
consideration of $750,000. During the first quarter of 1997 the Company sold an
additional 461,224 shares for cash consideration of $1,135,595 while during the
second quarter of 1997 it reported the sale of an additional 55,204 shares for
cash consideration of $113,010. The shares of Company common stock referred to
above were sold in accordance with certain terms and conditions contained in
Off-Shore Securities Subscription Agreements and, accordingly, were sold outside
the U.S., not as a registered public offering but rather in reliance upon
Regulation S of the General Rules and Regulations under the Securities Act of
1933. All sales of securities pursuant to Regulation S made during the first and
second quarters of 1997 as referred to directly above (and as amounting to an
aggregate of 516,428 shares) have been reported in Forms 8-K with dates of
reports of January 16, February 5, March 10, 1997, April 14, 1997 and June 13,
1997 - each of which Forms 8-K were filed in a timely manner in accordance with
the relatively new rules governing transactions of this nature.
-14-
<PAGE> 15
In addition to the Regulation S transactions indicated directly above,
the Company further sold (pursuant to Off-Shore Securities Subscription
Agreement and Regulation S) (a) 25,000 shares of its common stock for cash
consideration of $50,000; and (b) 15,000 shares of its common stock for a cash
consideration of $30,000 such transactions having been timely reported in Forms
8-K with dates of report of August 6, 1997 and August 20, 1997 respectively.
The consolidated financial statements to the Company's Form 10-KSB for
calendar year ended December 31, 1996 indicated certain factors which created an
uncertainty about the Company's ability to continue as a going concern.
Notwithstanding such concerns and the net loss most recently incurred during the
quarter ended September 30, 1997 of $(313,699), Company management nevertheless
continues to believe that the Company will be able to continue its operations
through (a) the raising of additional capital through debt and/or equity
financing if necessary and/or (b) the belief that its operations (through
activities of its recently entered into joint venture and/or recently acquired
subsidiaries) will improve sufficiently so as to eventually generate sufficient
revenues so as to justify anticipated and on-going expenditures. No assurance
can, however, be given that such will be the case.
Other than as indicated herein (or in its aforesaid Form 10-KSB for
calendar year ended December 31, 1996 and such other Forms 8-K as have been
filed by the Company with respect to the acquisitions referred to in the first
paragraph of this Item 2) the Company is not engaged (on its own) in any product
research and development nor does management currently contemplate the purchase
or sale of any plant or significant equipment. Any significant change in the
number of Company employees will be dependent, to a significant degree, upon the
status of its on-going joint venture and the acquisitions heretofore referred to
herein.
-15-
<PAGE> 16
PART II
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a
Vote of Security Holders - None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K as follows:
Form 8-K with date of report August 6, 1997 - filed August 19, 1997
Form 8-K with date of report August 20, 1997 - filed September 3, 1997
-16-
<PAGE> 17
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.
ABS GROUP INC.
By /S/ Emanuel A. Floor
--------------------------------------
Emanuel A. Floor, President
Dated: November 13, 1997
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 8,426
<SECURITIES> 0
<RECEIVABLES> 67,351
<ALLOWANCES> 5,860
<INVENTORY> 173,415
<CURRENT-ASSETS> 259,385
<PP&E> 208,527
<DEPRECIATION> 24,884
<TOTAL-ASSETS> 2,176,678
<CURRENT-LIABILITIES> 494,524
<BONDS> 0
0
0
<COMMON> 387
<OTHER-SE> 1,391,534
<TOTAL-LIABILITY-AND-EQUITY> 2,176,678
<SALES> 262,056
<TOTAL-REVENUES> 262,056
<CGS> 160,500
<TOTAL-COSTS> 1,370,854
<OTHER-EXPENSES> 81,962
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,517
<INCOME-PRETAX> (1,321,869)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,321,869)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,321,869)
<EPS-PRIMARY> (.37)
<EPS-DILUTED> (.37)
</TABLE>
