**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-QSB**

 

**(Mark One)**

 

**ý****                                ****QUARTERLYREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934**

 

**For the quarterly period ended September 30,2005.**

 

**o****        TRANSITIONREPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT**

 

**For the transition period from            to           **

 

**Commission file number: 000-25523**

 

**PBS Holding, Inc.**

(Exact name of small business issuer asspecified in its charter)

 
| **NEVADA**                                                      | ** ** | **86-0857752**                     |
|-----------------------------------------------------------------|------------|------------------------------------|
| (State or other  jurisdiction of incorporation of organization) |       | (IRS Employer  Identification No.) |

 

**433 Kitty Hawk Drive, Suite 226,Universal City, Texas 78148**

 (Address of principal executive office)

 

**(210) 658-4675**

(Issuer’s telephone number)

 

**Primary Business Systems, Inc.**

(Former name since last report)

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.  Yes  ý  No  o

 

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

 

Thenumber of outstanding shares of the issuer’s common stock, $0.001 par value(the only class of voting stock), as of September 30, 2005 was 10,784,753

 

TransitionalSmall Business Disclosure Format  Yes  o  No  ý

 

 

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**PBS HOLDING, INC.**

**TABLE OF CONTENTS**

 
| ** **                                                                   | **PART I – FINANCIAL INFORMATION** |                                               |
|------------------------------------------------------------------------------|----------------------------------------------|----------------------------------------------------|
| ** **                                                                   |                                         |
| **Item  1. Financial Statements**                                            |                                         |
|                                                                         |                                         |
|                                                                         | a.                                           | Basis of Presentation                              |   |
|                                                                         |                                         |                                               |   |
|                                                                         | b.                                           | Balance Sheet                                      |   |
|                                                                         |                                         |                                               |   |
|                                                                         | c.                                           | Statements of  Operations and Comprehensive Income |   |
|                                                                         |                                         |                                               |   |
|                                                                         | d.                                           | Interim Statement  of Stockholder’s Equity    |   |
|                                                                         |                                         |                                               |   |
|                                                                         | e.                                           | Statements of Cash  Flows                          |   |
|                                                                         |                                         |                                               |   |
|                                                                         | f.                                           | Notes to Interim  Financial Statements             |   |
|                                                                         |                                         |
| **Item 2. Management’s Discussion  and Analysis or Plan or Operations** |                                         |
|                                                                         |                                         |
| **Item  3. Controls and Procedures**                                         |                                         |
|                                                                         |                                         |
|                                                                         | **PART II – OTHER INFORMATION**    |                                               |
|                                                                         |                                         |
| **Item 1.  Legal Proceedings**                                               |                                         |
|                                                                         |                                         |
| **Item 2. Unregistered Sales  of Equity Securities and Use of Proceeds**     |                                         |
|                                                                         |                                         |
| **Item 3. Defaults upon Senior  Securities**                                 |                                         |
|                                                                         |                                         |
| **Item 4. Submissions of  Matters to a Vote of Security Holders**            |                                         |
|                                                                         |                                         |
| **Item 5.  Other Information**                                               |                                         |
|                                                                         |                                         |
| **Item 6. Exhibits and Reports  on Form 8-K**                           |                                         |
|                                                                              |                                              |                                                    |  |  |

 

2

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**PART I- FINANCIAL INFORMATION**

 

**ITEM 1.****    ****FINANCIAL STATEMEMTS**

 

**Basisof Presentation**

 

Asused herein, the term the “Company” refers to PBS Holding, Inc., a Nevadacorporation, and its subsidiaries and predecessors unless otherwiseindicated.  Unaudited consolidatedcondensed interim financial statements including a Consolidated Balance Sheetfor the Company as of the quarter ended September 30, 2005 andConsolidated Statements of Operations and Comprehensive Income, andConsolidated Statements of Cash Flows for the interim period up to the date ofsuch balance sheet and the comparable period of the preceding year for thestatement of operations are attached hereto as Pages 3 thru 10 and areincorporated herein by this reference.

 

Theaccompanying unaudited Consolidated Financial Statements are presented inaccordance with accounting principles generally accepted in the United Statesof America for interim financial information and the instructions for Form 10-QSBand Item 310(b) of Regulation S-B.  Accordingly,they do not include all of the information and footnotes required by accountingprinciples generally accepted in the United States of America for completefinancial statements.  The accompanyingstatements should be read in conjunction with the audited financial statementsfor the years ended December 31, 2004 and December 31, 2003.  In the opinion of management, all adjustments(consisting only of normal occurring accruals) considered necessary in order tomake the financial statements not misleading have been included.  Operating results for the nine months ended September 30,2005 are not necessarily indicative of results that may be expected for theyear ended December 31, 2005.  Thefinancial statements are presented on the accrual basis with significant inter-companytransactions and balances eliminated.

 

3

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**PBS HOLDING, INC.**

**AND SUBSIDIARIES**

CONSOLIDATED BALANCE SHEET

As of September 30, 2005 (Unaudited) andDecember 31, 2004 (Audited)

 
| ** **                             | ** ** | **September 30, 2005** | ** ** | **December 31, 2004** | ** ** |
|----------------------------------------|------------|-----------------------------|------------|----------------------------|------------|
| ASSETS                                 |       |                        |       |                       |       |
| Current Assets                         |       |                        |       |                       |       |
| Cash                                   |       | $                           | 55,671     |                       | $          | 185,484 |   |
| Notes  receivable                      |       | 145,658                     |       | 107,949                    |       |
| Client  accounts receivable            |       | 111,008                     |       | 64,435                     |       |
| Prepaid  Expenses                      |       | 1,200                       |       | 1,051                      |       |
| Workers  Compensation Prepaid Premiums |       | 96,097                      |       | 96,097                     |       |
|                                   |       |                        |       |                       |       |
| Total  Current Assets                  |       | 409,635                     |       | 455,016                    |       |
|                                   |       |                        |       |                       |       |
| Property & Equipment          |       |                        |       |                       |       |
| Furniture &  Fixtures         |       | 54,454                      |       | 54,454                     |       |
| Computer  equipment                    |       | 91,969                      |       | 91,322                     |       |
| Vehicles                               |       | 15,486                      |       | 15,485                     |       |
| Payroll  software                      |       | 43,724                      |       | 43,724                     |       |
|                                   |       |                        |       |                       |       |
| Total Property and Equipment           |       | 206,651                     |       | 204,986                    |       |
|                                   |       |                        |       |                       |       |
| Less: accumulated depreciation         |       | (166,055                    | )          | (149,213                   | )          |
| Net Property &  Equipment     |       | 40,596                      |       | 55,773                     |       |
|                                   |       |                        |       |                       |       |
| Other Assets                           |       |                        |       |                       |       |
| Security  Deposits                     |       | 1,055                       |       | 1,054                      |       |
| Customer  list, net of amortization    |       | 7,200                       |       | 9,000                      |       |
| Goodwill                               |       | 557,240                     |       | 557,240                    |       |
| Total Other  Assets                    |       | 565,495                     |       | 567,294                    |       |
| Total Assets                           |       | $                           | 1,015,726  |                       | $          | 1,078,083 |   |

 

The accompanying notes arean integral part of these financial statements.

 

4

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| ** **                                                                                                 | ** ** | **September 30, 2005** | ** ** | **December 31, 2004** | ** ** |
|------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|----------------------------|------------|
| LIABILITIES                                                                                                |       |                        |       |                       |       |
| Current  Liabilities                                                                                       |       |                        |       |                       |       |
| Accounts  payable                                                                                          |       | $                           | 129,396    |                       | $          | 109,812 |   |
| Checks drawn  on uncollected payrolls                                                                      |       | 98,060                      |       | 177,532                    |       |
| Deferred  revenue on payrolls                                                                              |       | 8,094                       |       | —                     |       |
| Client  Payroll Tax payable                                                                                |       | 293,128                     |       | 259,260                    |       |
| Workers Comp  payable                                                                                      |       | 45,777                      |       | 60,953                     |       |
| Client  payroll amount withheld                                                                            |       | 8,960                       |       | 1,532                      |       |
| Note Payable  AMS, Inc                                                                                     |       | 47917                       |       | —                     |       |
| Line of  credit from banks                                                                                 |       | 13,967                      |       | 38,522                     |       |
| Total  Current Liabilities                                                                                 |       | 625,299                     |       | 647,611                    |       |
|                                                                                                       |       |                        |       |                       |       |
| Other  Liabilities                                                                                         |       |                        |       |                       |       |
| Due to  shareholder/officer                                                                                |       | 622,451                     |       | 622,496                    |       |
| Total  Liabilities                                                                                         |       | 1,247,750                   |       | 1,270,107                  |       |
|                                                                                                       |       |                        |       |                       |       |
| Stockholders’  Equity (Deficiency)                                                                    |       |                        |       |                       |       |
| Common stock,  - $.001 par value authorized - 750,000,000 shares Issued and outstanding  10,784,753 shares |       | 86,278                      |       | 86,278                     |       |
| Additional  paid-in capital                                                                                |       | 976,342                     |       | 976,342                    |       |
| Accumulated  (deficit)                                                                                     |       | (1,294,643                  | )          | (1,254,644                 | )          |
| Total  Stockholders’ Equity (Deficiency)                                                              |       | (232,023                    | )          | (192,024                   | )          |
| Total  liabilities and Stockholder’s Equity (Deficiency)                                              |       | $                           | 1,015,726  |                       | $          | 1,078,083 |   |

 

The accompanying notes arean integral part of theses financial statements.

 

5

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**PBS HOLDING, INC.**

**AND SUBSIDIARIES**

CONSOLIDATEDSTATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the Three Months and Nine Months Ended September 30,2005 (Unaudited) and 2004

 
| ** **                                                 | ** ** | **Three months ending September 30** | ** ** | **Nine months ending September 30** | ** ** |
|------------------------------------------------------------|------------|-------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                 | ** ** | **2005**                                  | ** ** | **2004**                                 | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                                       |       |                                      |       |                                     |       |   |   |   |   |
| Revenues                                                   |       | $                                         | 1,359,633  |                                     | $          | 950,246 |   | $ | 3,625,634 |   | $ | 2,283,076 |   |
| Cost of revenues                                           |       | 794,490                                   |       | 590,811                                  |       | 2,233,827 |   | 1,436,098 |   |
| Gross Profit                                               |       | 565,144                                   |       | 369,435                                  |       | 1,391,807 |   | 846,978 |   |
| Operating Expenses                                         |       |                                      |       |                                     |       |   |   |   |   |
| General and  Administrative                                |       | 267,429                                   |       | 136,269                                  |       | 743,315 |   | 522,512 |   |
| Wages,  commissions & salaries                    |       | 335,973                                   |       | 164,469                                  |       | 688,492 |   | 444,988 |   |
| Total  Operating Expenses                                  |       | 603,402                                   |       | 300,708                                  |       | 1,431,807 |   | 967,500 |   |
| (Loss) from Operations                                     |       | (38,258                                   | )          | 66,727                                   |       | (39,999 | ) | (120,522 | ) |
| Other Income                                               |       | —                                    |       | —                                   |       | — |   | — |   |
| (Loss)  Before Prevision For Income Tax                    |       | (38,258                                   | )          | 66,272                                   |       | (39,999 | ) | (123,522 | ) |
| Provision  for Income Taxes                                |       | —                                    |       | —                                   |       | — |   | — |   |
| Net Income  (Loss)                                         |       | $                                         | (38,258    | )                                        | $          | 66,272 |   | $ | (39,999 | ) | $ | (120,522 | ) |
|                                                       |       |                                      |       |                                     |       |   |   |   |   |
| Basic and  Distributed Net Income (Loss) Per Share         |       | $                                         | (0.00      | )                                        | $          | 0.00 |   | $ | (0.00 | ) | $ | (0.00 | ) |
| Basic and  Distributed Weighted Average Shares Outstanding |       | 86,278,297                                |       | 85,750,747                               |       | 86,278,297 |   | 86,278,297 |   |

 

The accompanying notes arean integral part of these financial statements.

 

6

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**PBS HOLDING, INC.**

**AND SUBSIDIARIES**

CONSOLIDATED CONDENSED INTERIM

STATEMENTOF STOCKHOLDERS EQUITY (Deficiency)

For the Period Ended September 30, 2005(Unaudited)

 
| ** **                     | ** ** | ** **       | ** ** | ** ** | ** ** | ** **          | ** ** | **Additional** | ** ** | **Total**        | ** ** |
|--------------------------------|------------|------------------|------------|------------|------------|---------------------|------------|----------------|------------|------------------|------------|
| ** **                     | ** ** | **Common Stock** | ** ** | ** ** | ** ** | **Accumulated**     | ** ** | **Equity**     | ** ** |
| ** **                     | ** ** | **Shares**       | ** ** | **Amount** | ** ** | **Paid-in-Capital** | ** ** | **(Deficit)**  | ** ** | **(Deficiency)** | ** ** |
| Balance December 31, 2004 |       | 86,278,297       |       | $          | 86,278     |                | 976,342    |           | $          | (1,254,644       | )          | $ | (192,024 | ) |
| Net Income  (Loss)             |       | —           |       | —     |       | —              |       | (39,999        | )          | (39,999          | )          |
| Balance June 30, 2004     |       | 86,278,297       |       | $          | 86,297     |                | 976,342    |           | $          | (1,294,643       | )          | $ | (232,023 | ) |

 

The accompanying notes arean integral part of these financial statements.

 

7

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**PBS HOLDING, INC.**

**AND SUBSIDIARIES**

CONSOLIDATEDSTATEMENTS OF CASH FLOW

For the Nine Months Ended September 30,2005 and 2004 (Unaudited)

 
| ** **                                                                                           | ** ** | **For the Nine months ending September 30** | ** ** |
|------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                                           | ** ** | **2005**                                         | ** ** | **2004** | ** ** |
| Net Income                                                                                           |       | $                                                | (39,999    | ) | $ | (120,522 | ) |
| Adjustments  to reconcile net income (loss) to net cash provided by.(used by) operating  activities: |       |                                             |       |   |   |
| Depreciation  and amortization                                                                       |       | 18,636                                           |       | 22,885 |   |
| (Increase)  decrease in accounts receivable                                                          |       | (46,572                                          | )          | 7,746 |   |
| (Increase)  decrease in prepaid expense                                                              |       | (149                                             | )          | 68,677 |   |
| (Increase)  decrease in other current assets                                                         |       | (37,708                                          | )          | (21,762 | ) |
| Increase  (decrease) in accounts payable                                                             |       | 19,585                                           |       | (105,263 | ) |
| Increase  (decrease) in client payroll tax liability                                                 |       | 13,868                                           |       | 196,730 |   |
| Increase  (decrease) in deferred revenue                                                             |       | 8,094                                            |       | — |   |
| Increase  (decrease) in other current liabilities                                                    |       | (7,748                                           | )          | 35,004 |   |
| Checks drawn  on uncollected payrolls                                                                |       | (79,472                                          | )          | 40,544 |   |
| Total  Adjustments                                                                                   |       | (111,466                                         | )          | 244,561 |   |
| Net cash  provided by (used in) operating activities                                                 |       | (151,465                                         | )          | 124,039 |   |
|                                                                                                 |       |                                             |       |   |   |
| Cash flows  from investing activities; Payments for the purchase of property                         |       | (1,665                                           | )          | (3,947 | ) |
| Net cash  provided by (used in) investing activities                                                 |       | (1,665                                           | )          | (3,947 | ) |
|                                                                                                 |       |                                             |       |   |   |
| Cash flows  from financing activities                                                                |       |                                             |       |   |   |
| Net  borrowing (paybacks) under line of credit                                                       |       | (24,555                                          | )          | 1,095 |   |
| Net  borrowing on notes payable                                                                      |       | 50,000                                           |       | (20,973 | ) |
| Principal  (payments) on short-term debt                                                             |       | (2,083                                           | )          | — |   |
| Due to  shareholders/officers                                                                        |       | (45                                              | )          | (173 | ) |
| Net cash  provided by (used in) financing activities                                                 |       | 23,317                                           |       | (20,051 | ) |
|                                                                                                 |       |                                             |       |   |   |
| Net increase  (decrease) in cash and cash equivalents                                                |       | (129,813                                         | )          | 100,041 |   |
|                                                                                                 |       |                                             |       |   |   |
| Cash and  cash equivalents at beginning of year                                                      |       | 185,484                                          |       | 19,845 |   |
|                                                                                                 |       |                                             |       |   |   |
| Cash and  Cash equivalents at end of period                                                          |       | $                                                | 55,671     |   | $ | 119,886 |   |

 

Theaccompanying notes are an integral part of these financial statements.

 

8

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| ** **                          | ** ** | **For Nine Months Ended September 30** | ** ** |
|-------------------------------------|------------|---------------------------------------------|------------|
| ** **                          | ** ** | **2005**                                    | ** ** | **2004** | ** ** |
| Supplemental information:           |       |                                        |       |   |   |
| Cash  payments for interest expense |       | $                                           | —     |   | $ | — |   |
| Cash  payments for income taxes     |       | —                                      |       | — |   |
| Non Cash Items (None)               |       | $                                           | —     |   | $ | — |   |

 

The Accompanying notes arean integral part of these financial statements.

 

9

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**PBS HOLDING, INC.**

**AND SUBSIDIARIES**

NOTESTO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2005

 

NOTE 1 – BASIS OF PRESENTATION

 

Thecondensed interim financial statements at September 30, 2005 are unaudited,but include all adjustments which the Company considers necessary for a fairpresentation.

 

Theaccompanying unaudited financial statements are for the interim periods and donot include all disclosures normally provided in annual financial statements,and should be read in conjunction with the Company’s Form 10-KSB for theyear ended December 31, 2004. The accompanying unaudited interim financialstatements for the current quarter and year to date ended September 30,2005, are not necessarily indicative of the results which can be expected forthe entire year.  The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities atthe date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 

TheCompany has consolidated the financial statements of its wholly ownedsubsidiaries, Primary Business Systems, LLC (“PBS LLC”), Primary HR Services,LLC (“Primary HR”), and AHJR, Inc., DBA Concord Staffing Services (“AHJR”)in these financial statements.  Allsignificant inter-company transactions have been eliminated.

 

Allsignificant accounting policies as previously disclosed with the annual financialstatements for the years ended December 31, 2004 and 2003 remainunchanged.

 

NOTE 3 – CHANGE IN STOCKHOLDERS EQUITY

 

Thestatement of changes in stockholders equity is reported in these financialstatements and discloses the transactions as they were incurred in the ninemonths ended September 30, 2005.

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

NotesReceivable reported as a current asset of $145,658 is due from ConsumersInsurance Agency, LLC.  The majority membersof Consumers Insurance Agency, LLC are Patrick Matthews and Amanda Sinclair whoare the majority shareholders in the Company. The notes receivable make up revolving cash advances to ConsumersInsurance Agency, LLC and expenses paid on behalf of Consumers InsuranceAgency, LLC by the Company.

 

These revolving notes receivable were part of the2002 acquisition of the present operations of the Company.  At the time of acquisition, these revolvingnotes receivable were for an amount less than what is presently reported in thefinancial statements as of September, 2005.

 

NOTE 5 – ACCOUNTS RECEIVEBLE FACTORED

 

AHJR factors its accounts receivable.  As of September 30, 2005 it had $33,893.07accounts receivable factored, all with recourse.  The Company has made no provision for loss onreceivables factored as it believes the risk exposure is minimal.

 

10

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NOTE 6 – TERMINATION OF A MATERIAL DEFINITIVEAGREEMENT

 

On Form 8-K dated January 31, 2005,the Company indicated that it had entered into a settlement agreement, dated January 31,2005 with several parties to resolve outstanding claims, judgments and existinglitigation.  The Company also previouslyfiled with the Securities and Exchange Commission and distributed to itsshareholders of record as of April 22, 2005, an Information Statementregarding the proposed transaction.

 

As a result of failure by the other parties to the settlementagreement to adhere to the terms thereof and to perform their obligations thereunder, the Company has declared a default and terminated the settlement agreement.  The Company has been unable to reach any ofthe other parties to the settlement agreement despite delivering several demandsand notice of default letters.

 

The settlement agreement would have, if consummated,resulted in a change of control of the Company and a distribution of thesignificant business assets of the Company to Patrick Matthews and his family (hereinafter referred to as “Matthews Family”). In effect, the terms and conditions of the settlement agreement wouldhave “unwound” the transactions entered into by the Company and a formermajority shareholder, Pine Services, Inc. consummated with the MatthewsFamily in November 2002.  Prior tothese transactions, the Company had no significant operations.

 

As a result of termination of the settlement agreement,there will be no change in control of the Company, Patrick Matthews will remainas Chairman and Chief Executive Officer of the Company, and the remainingofficers and directors of the Company will remain in their positions.  The Company will continue with its presentoperations as existing prior to the settlement agreement.

 

NOTE 7 – CONTINGENTLIABILITIES & LITIGATION

 

Onor about September 13, 2004, PBS LLC was served with a suit filed in theJudicial District Court of Webb County, Texas, by Laredo Cal-Tex, Inc.(Cause No. 2004 - CV F 001296 D3), alleging breach of contract.  Limited discovery has occurred in thecase.  On September 30, 2004, PBSLLC filed a motion to transfer venue and answer.  The Company intends to vigorously defenditself against the lawsuit and to pursue what remedies it may have against theplaintiffs.  Management believes thecontingent liability of this lawsuit is minimal, and therefore, it hasconcluded to accrue no contingency in the financial statements for them.

 

11

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**ITEM 2.****    ****MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

 

**ForwardLooking and Cautionary Statements**

 

The following discussioncontains forward-looking statements.  TheCompany’s actual results could differ materially from those discussed in suchforward-looking statements.  Factors thatcould cause or contribute to such differences include those discussed below andelsewhere in this Form 10-QSB.  See “CautionaryNote Regarding Forward-Looking Statements”.  The following discussion should be read inconjunction with the Company’s condensed consolidated financial statements andnotes thereto included elsewhere in this filing and in conjunction with Form 10-KSBincluding risk factors stated therein.  Historicalresults are not necessarily indicative of trends in operating results for anyfuture period.

 

**CriticalAccounting Policies and Estimates**

 

The Company believes itssignificant critical accounting policies have not changed since fiscal year endedDecember 31, 2004.  See Note 2 of theCompany’s annual report on Form 10-KSB as well as “Critical AccountingPolicies” contained therein for a detailed discussion on the application ofthese and other accounting policies.

 

**RevenueRecognition**

 

The gross billings of PBSLLC, Primary HR, and AHJR (sometimes hereinafter collectively referred to as the“Subsidiaries”) charges its clients under its Customer Services Agreementincluding each worksite employee’s gross wages, a service fee and, to theextent elected by the clients, health and welfare benefit plan costs.  The service fees, which are computed as apercentage of gross wages, are intended to yield a profit to the Subsidiariesand cover the cost of certain employment-related taxes, workers’ compensationinsurance coverage, and administrative and field services provided by theSubsidiaries to the client, including payroll administration, record keeping,safety, human resources, and regulatory compliance consultation.  The component of the service fee related toadministration varies according to the size of the client, the amount andfrequency of payroll payments and the method of delivery of such payments.  The component of the service fee related toworkers’ compensation and unemployment insurance is based, in part, on theclient’s historical claims experience.  Allcharges by the Subsidiaries are invoiced along with each periodic payrolldelivered to the client.

 

The Company reports revenuesfrom service fees in accordance with Emerging Issues Task Force (“EITF”) No. 99-19,reporting revenue gross as a principal versus net as an agent.  The Company reports as revenues, on a grossbasis, the total amount billed to clients for service fees, health and welfarebenefit plan fees, workers’ compensation and unemployment insurance fees.  The Company reports revenues on a gross basisfor these fees because PBS LLC and Primary HR are the primary obligors anddeemed to be the principal in these transactions under EITF No. 99-19.  The Company reports revenues on a net basisfor the amount billed to clients for worksite employee salaries, wages andcertain payroll-related taxes less amounts paid to worksite employees andtaxing authorities for these salaries, wages and taxes.  The Company accounts for its revenues usingthe accrual method of accounting.  Underthe accrual method of accounting, the Company recognizes its revenues in theperiod in which the worksite employee performs work.  The Company accrues revenues and unbilledreceivables for service fees relating to work performed by worksite employeesbut unpaid at the end of each period.  Inaddition, the related costs of services are accrued as a liability for the sameperiod.  Subsequent to the end of eachperiod, such costs are paid and the related Professional Employer Organizationservice fees are billed.

 

**Overview**

 

Thebusiness of the Company is to operate in the Professional Employer Organizationindustry and the Temporary Staffing Services industry and operates through theSubsidiaries and as economies of scale can be realized, combine the individualentities in each sector.

 

PBS LLC and Primary HR areregional Professional Employer Organizations committed to providing humancapital management solutions.  PBS LLC andPrimary HR offers clients, which are typically small to medium-sized businesseswith between five and fifty employees, a broad range of products and servicesthat provide a complete solution for the clients’ human resources outsourcingneeds.  PBS LLC’s products and servicesinclude benefits administration, payroll administration, governmentalcompliance, risk-management, unemployment administration, health, and welfareand retirement benefits.

 

AHJR is a regional temporarystaffing services company helping business meet their staffing needs whileminimizing their employee acquirement cost. AHJR offers qualified screened employees to clients that meet theiremployment needs on temporary bases. AHJR provides all payroll administration, unemployment administrationand assignment administration of the temporary staff.

 

12

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**Revenues**

 

Revenuesconsist of service fees charged by the Subsidiaries to cover the costs ofcertain employment-related taxes, workers’ compensation insurance coverage andadministrative and field services provided to clients.  The service fee charged is invoiced along witheach periodic payroll delivered to the client.  The client’s portion of health plan costs ischarged separately and is not included in the service fee.  Service revenues are recognized in the periodin which the worksite employee works.  Underthis accrual method of accounting, service fees relating to worksite employeeswith earned but unpaid wages at the end of each period are recognized asunbilled revenues and the related payroll costs for such wages are accrued as aliability during the period in which the worksite employee earns wages.  Subsequent to the end of each period, suchwages are paid and the related service fees are billed.

 

**Cost of Services**

 

Costof services includes all direct costs associated with revenue generatingactivities as well as employee benefit costs, workers’ compensation insuranceand state unemployment taxes.

 

Employeebenefit costs are comprised primarily of medical benefit costs, but alsoinclude costs of other employee benefits such as dental, disability and grouplife insurance.  Benefit claims incurredby worksite employees under the benefit plans are expensed as incurredaccording to the terms of each contract.

 

Incertain instances, PBS LLC chooses to make a contribution toward the cost ofthe worksite employees’ medical benefit costs.  In most small group health markets, medicalbenefit plan rates vary based on the medical participants’ demographics.  In order to offer a competitively pricedbusiness solution, PBS LLC may offer reduced medical benefit plan rates toworksite employees with positive risk characteristics.  The additions of these selected worksiteemployees’ offsets potential adverse selection and helps to stabilize theoverall medical benefit plan risk to PBS LLC.

 

PBSLLC offers its medical benefit plans through partnerships with premier healthcare companies.  These companies haveextensive provider networks and strong reputations in the markets in which PBSLLC operates.

 

All of PBS LLC’s health care providers offer preferredprovider organization (PPO) coverage.

 

PBSLLC’s workers’ compensation program from January 1, 2002 through December 31,2003 was with Texas Mutual Insurance Company. In November 2003 PBS LLC renewed its workers’ compensation programwhich is a guaranteed cost program. Under this program PBS LLC has no liability beyond the premiums of thepolicy.  The current policy term expiresin November 2004.

 

PrimaryHR obtained workers’ compensation from the AMFED Companies LLC effective July,2004 through July 2005; the program is a guaranteed cost program where thecompany has no liability beyond the premiums of the policy.

 

Stateunemployment tax rates vary from state to state and are based upon the employer’sclaims history.  PBS LLC aggressivelymanages its state unemployment tax exposure by contesting unwarranted claims.

 

**Operating Expenses**

 

Operatingexpenses consist primarily of salaries, wages and commissions associated with theSubsidiaries’ internal employees, and general and administrative expenses.  Sales and marketing commissions and clientreferral fees are expensed as incurred. The Company expects that future revenue growth will result in increasedoperating leverage, as the Subsidiaries’ fixed operating expenses are leveragedover a larger revenue base.

 

**Income Taxes**

 

TheCompany records income tax expense using the asset and liability method ofaccounting for deferred income taxes.  The Company’s effective tax rate for 2003 was0%.

 

**Profitability**

 

Profitabilityis largely dependent upon the Subsidiaries’ success in generating revenues for theirservices and managing the costs that are within its control.  Revenues and costs of service primarily relateto workers’ compensation coverage, health benefit plans and state unemploymenttaxes.  The Subsidiaries seek to managethese costs through the use of (a) workers’ compensation arrangements withcarriers who efficiently manage claims administration, internal risk assessmentand client risk management programs, (b) appropriately designed healthbenefit plans that encourage worksite employee participation, and (c) aggressivemanagement of its state unemployment tax exposure.

 

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**Results of Operations**

 

The following discussion should be read in conjunction with the Company’sAnnual Report on Form 10-KSB for the year ended December 31, 2004,including all amendments thereto, as well as the consolidated financial statementsand notes thereto included in this Quarterly Report on Form 10-QSB.

 

Thefollowing table presents the Company’s results of operations for the three andnine months ending September 30, 2005 and 2004, expressed as a percentageof revenues:

 
| ** **                         | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** |
|------------------------------------|------------|------------------------|------------|-----------------------|------------|
| ** **                         | ** ** | **September 30**  | ** ** | **September 30** | ** ** |
| ** **                         | ** ** | **2005**               | ** ** | **2004**              | ** ** | **2005** | ** ** | **2004** | ** ** |
| Revenues                           |       | 100.0                  |       | 100.00                |       | 100.00 |   | 100.0 | % |
| Cost of  Services                  |       | 58.43                  |       | 61.12                 |       | 61.61 |   | 62.90 |   |
| Gross Profit                       |       | 41.57                  |       | 38.88                 |       | 38.39 |   | 37.10 |   |
| Operating  Expenses:               |       |                   |       |                  |       |   |   |   |   |
| General and  administrative        |       | 19.67                  |       | 14.34                 |       | 20.50 |   | 22.89 |   |
| Salaries,  wages and commissions   |       | 24.71                  |       | 17.31                 |       | 18.99 |   | 19.49 |   |
| Consulting  Services               |       | 0                      |       | 0                     |       | 0 |   | 0 |   |
| Total  operating costs             |       | 44.38                  |       | 31.64                 |       | 39.49 |   | 42.38 |   |
| Operating  (loss) income           |       | (2.45                  | )          | 7.23                  |       | (1.01 | ) | (5.27 | ) |
| Other income                       |       | 0.0                    |       | 0.0                   |       | 0.0 |   | 0.0 |   |
| Interest  expense                  |       | 0.0                    |       | 0.0                   |       | 0.0 |   | 0.0 |   |
| Other  non-operating expense       |       | 0.0                    |       | 0.0                   |       | 0.0 |   | 0.0 |   |
| (Loss)  income before income taxes |       | (2.45                  | )          | 7.23                  |       | (1.10 | ) | (5.27 | ) |
| Income tax  (benefit) provision    |       | 0.0                    |       | 0.0                   |       | 0.0 |   | 0.0 |   |
| Net income  (loss)                 |       | (2.45                  | )          | 7.23                  |       | (1.10 | ) | (5.27 | ) |

 

**Quarter ending September 30, 2005 compared to September 30,2004**

 

Forthe quarter ended September 30, 2005, revenues increased $409,387, or43.08% from 2004, totaling $1,359,633 in 2005 compared to $950,246, for2004.  The three-month increase reflectsour focus on sales and the addition of a number of new clients.  The change is reflective of the gains madeduring the period with our focus on new business and increased fees.

 

Costof services, which includes the cost of medical benefit plans, workers’compensation insurance, 401K administration cost, state unemployment taxes andother costs for the quarter ended September 30, 2005 totaled $794,490 or58.43% of revenues for 2005, compared to $580,811 or 61.12% for 2004.  The increase in cost is consistent with theaddition of new clients and leased employees that are affected by an increaseof our state unemployment rate which is realized through the first $7,000 of employeewages.  As revenues increase costmeasured as a percentage of revenues decreased 2.69%.

 

Grossprofit for the quarter ended September 30, 2005 was $565,144 or 41.57% ofrevenue compared to $369,435 or 38.88% for 2004.  Gross profit dollars increased for thequarter $195,691 or 52.97% over the same quarter 2004.

 

Operatingexpenses for the quarter ended September 30, 2005 was $603,402 for 2005,or 44.38 % of revenues compared to $300.708, or 31.64% of revenues for 2004.

 

Salaries,wages and commissions for the quarter ended September 30, 2005, were$335,972 for 2005, or 24.71% of revenues compared to $164,469 or 17.31% for2004.  Payroll costs increased as PBS LLCexpanded staff to facilitate best services to customers, increased sales staff,and increased commission expense and the addition of staff for Primary HR.  At the end of September 2004 theSubsidiaries employed eleven individuals, for the same period ending September 2005the Subsidiaries employed fifteen individuals.

 

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Othergeneral and administrative expenses for the quarter ended June 30, 2005was $267,429, or 19.67% of revenue for 2005 compared to $136,239, or 14.34 % ofrevenue in 2004, representing an increase of $131,190 in general andadministrative expenses.  This increase resultsfrom increased legal fees incurred by the company in bringing two cases toconclusion.

 

Weexperienced a net loss for the quarter ended September 30, 2005 of($39,999), or 2.45% of revenue as compared to a net income of 68,727 or 7.23%of revenue for 2004.  The operatinglosses are attributed to increased legal fees and settlement expenses incurred inconnection with the settlement described in the Form 8-K dated January 31,2005 as filed with the Securities and Exchange Commission.

 

**Nine Months ending September 30, 2005 compared to September 30,2004**

 

Forthe nine months ended September 30, 2005, revenues increased $1,342,558,or 37.03% from 2004, totaling $3,625,634 in 2005 compared to $2,283,076, forthe same period in 2004.  The nine-monthincrease reflects our focus on sales and the addition of a number of newclients.  The change is reflective of thegains made during the period with our focus on new business and increased fees.

 

Costof services, which include the cost of medical benefit plans, workers’compensation insurance, 401K administration cost, state unemployment taxes andother costs for the six months ended June 30, 2005 totaled $2,233,827 or61.61% of revenues for 2005, compared to $1,436,098 or 62.90% for 2004.  The increase in cost is consistent with theaddition of new clients and leased employees that are affected by an increaseof our state unemployment rate which is realized through the first $7,000 ofemployee wages.

 

Grossprofit for the nine months ended September 30, 2005 was $1,391.80 or38.39% of revenue compared to $846,978 or 37.10% for 2004.  Gross profit dollars increased for the ninemonths $464,306 or 54.82% over the same quarter 2004.

 

Operatingexpenses for nine months ended September 30, 2005 was $1,431,807 for 2005,or 39.49 % of revenues compared to $967,500, or 42.38% of revenues for 2004.

 

Salaries,wages and commissions for nine months ended September 30, 2005 were$688,492 for 2005, or 18.99% of revenues compared to $444,988 or 19.49% for 2004.  Payroll costs increased as PBS LLC expandedstaff to facilitate best services to customers, increased its sales staff, andincreased its commission expense and the addition of staff for Primary HR.  At the end of September 2004 theSubsidiaries employed eleven individuals, for the same period ending September 2005the combined subsidiaries employed fifteen individuals.

 

Othergeneral and administrative expenses for the nine months ended September 30,2005 was $743,315 or 20.50% of revenue for 2005, compared to $522.512, or 22.89% of revenue in 2004.  Although generaland administrative expenses increased $220,803 or 42.23% from the previous yearcomparing the impact on sales general and administrative expenses decreased2.39% as a percentage of revenue.

 

Weexperienced a net loss for the nine months ended September 30, 2005 of($39,999), or 1.10% of revenue as compared to a net loss of (120,522) or 5.27%of revenue for 2004.  The decrease inoperating losses is attributed to our increase in sales, focus on limitingexpenses and a reduction in legal fees for the Company.

 

**Liquidity and Capital Resources**

 

TheCompany had $55,671 in cash and cash equivalents and restricted certificates ofdeposit at September 30, 2005.  TheCompany is required to collateralize its obligations under its workers’compensation coverage.  The Company usesits cash as well as certificates of deposits to collateralize these obligationsas more fully described below.

 

AtNovember 18, 2003, PBS LLC had deposited $96,097, as collateral with PBSLLC’s workers’ compensation plans upon renewal of its plan for 2003/2004, whichwas then carried forward for the 2004/2005-policy year. PBS LLC’s workers’compensation programs for the 2001 through November 2004 program years aresubject to no further collateral adjustments.

 

TheCompany had no long-term debt as of September 30, 2005 other than to itsmajor shareholder, who is an officer and director.  The principal amount of this outstanding debtat June 30, 2005 is $622,451.  Thereis no interest accrual with this debt.

 

Thecharges to clients by PBS LLC, Primary HR and AHJR derived from salaries, wagesand payroll taxes is managed from a cash flow perspective so that a matchingexists between the time that the funds are received from a client to the timethat the

 

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fundsare paid to the worksite employees and to the appropriate tax jurisdictions.  As co-employers, and under the terms of theClient Services Agreement, PBS LLC, Primary HR and AHJR are obligated to makecertain wage, tax and regulatory payments.  Because of this, the objective of PBS LLC isto minimize the credit risk associated with remitting the payroll andassociated taxes before receiving from the client the service fees charged by PBSLLC.

 

PBSLLC’s primary short-term capital requirements relate to the payment of accruedpayroll and payroll taxes of its internal and worksite employees, accountspayable for capital expenditures and the payment of accrued workers’compensation expense and health benefit plan premiums.

 

**Going Concern Issues**

 

We expect to spend significant amounts to expanddomestic sales and operations through mergers and acquisitions.  As a result, we will need to generatesignificant additional revenue to achieve profitability based on such plannedexpenditures and expansion.  Even if wedo achieve profitability, we may not be able to sustain or increaseprofitability on a quarterly or annual basis.  If we do not achieve and maintain profitability,the market price for our common stock may decline.

 

If we do not receive additional capital when andin the amounts needed in the near future, our ability to continue as a goingconcern is in substantial doubt. We have limited revenue and limited cashassets, and will require additional equity or capital investments.

 

Obtaining future financing may be costly andwill likely be dilutive to existing stockholders.  If we are not able to obtain financing whenand in the amounts needed, and on terms that are acceptable, our operations,financial condition and prospects could be materially and adversely affected,and we could be forced to curtail our operations or sell part or all of ourassets.  Management continually isseeking additional sources of capital to maintain the ongoing operations of thecompany.

 

**Material Commitments for Capital Expenditures**

 

Neitherthe Board nor Management have made any commitments for capital expenditures.

 

**Inflation**

 

TheCompany believes that inflation in salaries and wages of worksite employees havea positive impact on its results of operations, as its service fee isproportional to such changes in salaries and wages.

 

**Off-balance Sheet Arrangements**

 

TheCompany does not currently have any off-balance sheet arrangements.

 

**Purchase of Registrant’s Securities**

 

TheCompany did not purchase any of its securities during the quarter ended September 30,2005.

 

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**ITEM 3.****    ****CONTROLS AND PROCEDURES**

 

Ourmanagement, under the supervision and with the participation of our ChiefExecutive Officer and Controller, conducted an evaluation of our “disclosurecontrols and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c))as of the end of the period covered by this Report on Form 10-QSB.  Based on their evaluation, our Chief ExecutiveOfficer and Chief Financial Officer (who is also our controller and principalaccounting officer) have concluded that as of the date of the end of the periodcovered by this Report on Form 10-QSB, our disclosure controls andprocedures are effective to ensure that all information required to be filed inthis Report on Form 10-QSB is recorded, processed, summarized andreported, within the time periods specified in the Securities and ExchangeCommission’s rules and forms.

 

**Changes in Internal Controls**

 

Therehave been no changes (including corrective actions with regard to significantdeficiencies or material weaknesses) in our internal controls or in otherfactors that could significantly or materially, or have materially or arereasonably likely to materially affect these controls over financial reporting.

 

**Cautionary Note Regarding Forward Looking Statements**

 

Thestatements contained in this filing, including under the section titled “Management’sDiscussion and Analysis or Plan or Operations,” and other sections of thefiling that are not purely historical are forward-looking statements within themeaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934, including without limitation,statements regarding the Company’s expectations, hopes, beliefs, intentions orstrategies regarding the future. Words such as “may”, “will”, “should”, “could”,“would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”,“intends”, “plans”, “believes”, “estimates”, and similar expressions, as wellas statements in future tense, identify forward-looking statements.  These forward-looking statements are based on theCompany’s current expectations and beliefs concerning future developments andtheir potential effects on the Company.  Therecan be no assurance that future developments affecting the Company will bethose that the Company has anticipated.  Theseforward-looking statements involve a number of risks, uncertainties (some ofwhich are beyond the Company’s control) or other assumptions that may causeactual results or performance to be materially different from those expressedor implied by such forward-looking statements.  These risks and uncertainties include, but arenot limited to, those factors listed below:

 

•                  Potentialliability as a co-employer as a result of acts or omissions by the Company’sclients or client employees;

•                  Exposureto client credit risk as a result of the Company’s obligation to make certainpayments in respect of client employees;

•                  Unfavorabledeterminations under certain laws and regulations regarding the Company’sstatus as an “employer” of client employees;

•                  Inadequacyof the Company’s insurance-related loss reserves to cover its ultimateliability for losses;

•                  Unavailabilityof insurance coverage for workers’ compensation, medical benefits and generalliability on financial terms and premium rates acceptable to the Company;

•                  Significantcollateral requirements in respect to the Company’s obligations to itsinsurance carriers and the potential for those requirements to increase in thefuture;

•                  TheCompany’s failure to comply with applicable laws and regulations in a complexregulatory environment;

•                  Inexperienceof a large portion of the Company’s sales staff;

•                  TheCompany’s failure to properly manage its growth and to successfully integrateacquired companies, including risks of client attrition and the risksassociated with assumed employee benefit plans;

•                  Risksassociated with geographic market concentration;

•                  Risksassociated with expansion into additional states with varying state regulatoryrequirements;

•                  Theimpact of competition from existing and new businesses offering human resourceoutsourcing services;

•                  Theability of the Company’s clients to terminate their relationship with theCompany upon 30 days notice;

•                  Errorsor omissions by the Company in performing its services;

•                  TheCompany’s dependency on key personnel and potential difficulties and expensesin the recruitment and retention of key employees;

•                  TheCompany’s inability to attract and retain qualified human resource consultants;

•                  Risksassociated with the Company’s dependency on technology services and third partylicenses of technology;

•                  TheCompany’s inability to use the Internet as a means of delivering human resourceservices;

•                  Fluctuationin interest rates and the associated effect on the Company’s investments;

•                  TheCompany’s failure to adequately protect its proprietary rights;

 

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•                  TheCompany’s reliance on one financial institution to transfer its payroll funds;

•                  Otherfactors which are described in further detail in the Company’s Form 10-KSB,and in other filings with the Securities and Exchange Commission; and

•                  TheCompany’s need for Capital.

 

TheCompany undertakes no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise except as may be required under applicable securities laws.  The Company cautions that the factorsdescribed above could cause actual results or outcomes to differ materiallyfrom those expressed in any forward-looking statements made by or on behalf of theCompany.  Any forward-looking statementspeaks only as of the date on which such statement is made, and the Companyundertakes no obligation to update any forward-looking statement or statementsto reflect events or circumstances after the date on which such statement ismade or to reflect the occurrence of unanticipated events.  New factors emerge from time to time, and itis not possible for management to predict all of such factors.  Further, management cannot assess the impactof each such factor on the business or the extent to which any factor, orcombination of factors, may cause actual results to differ materially fromthose contained in any forward-looking statements.

 

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**PART II – OTHER INFORMATION**

 

**ITEM 1.****    ****LEGAL PROCEEDINGS**

 

**Termination of a Material Definitive Agreement**

 

TheCompany had previously announced, on Form 8-K dated January 31, 2005,that it had entered into a settlement agreement dated as of January 31,2005 with several parties to resolve outstanding claims, judgments and existinglitigation.  The Company also previouslyfiled with the Securities and Exchange Commission and distributed to its shareholdersof record as of April 22, 2005 an Information Statement regarding theproposed transaction.

 

Asa result of the failure by the other parties to the settlement agreement toadhere to the terms thereof and to perform their obligations there under, theCompany has declared a default and terminated the settlement agreement.  The Company has been unable to reach any ofthe other parties to the settlement agreement despite delivering several demandand notice of default letters.

 

Thesettlement agreement would have, if consummated, result in a change of controlof the Company and a distribution of the significant business assets of theCompany to Patrick Matthews and the Matthews Family.  In effect, the terms and conditions of the settlementagreement would have “unwound” the transactions entered into by the Company anda former majority shareholder, Pine Services, Inc. consummated with theMatthews Family in November 2002. Prior to these transactions, the Company had no significant operations.

 

Asa result of termination of the settlement agreement, there will be no change incontrol of the Company.  Patrick Matthewswill remain as Chairman and Chief Executive Officer of the Company, and theremaining officers and directors of the Company will remain in their positions. The Company will continue with itspresent operations as existing prior to the settlement agreement.

 

Asa commercial enterprise and employer and with respect to its employment-relatedbusinesses in particular, we are engaged in litigation from time to time duringthe ordinary course of business in connection with employment-relations issues,workers’ compensation and other matters. Generally, we are entitled to indemnification or repayment from our ProfessionalEmployer Organization clients for claims brought by worksite employees relatedto their employment.  However, there canbe no assurance that the client employer will have funds or insurance inamounts to cover any damages or awards, and as co-employer, we may be subjectto liability.  No allowance for thiscontingency is recognized on the financial statements of the Company.  We are engaged in no other litigation, theeffect of which would be anticipated to have a material adverse impact on ourfinancial conditions or results of operations.

 

**Changes in Securities and Purchases of Securities**

 

TheCompany has not undertaken any stock purchases of its securities in the lastfiscal quarter or the current fiscal quarter as of the date of this Report.  Additionally, the Company has not issued anysecurities in the most recent fiscal quarter or in the current fiscal quarter.  Our transfer agent is Registrar and TransferCorporation located at 10 Commerce Drive, Cranford, New Jersey 07016.  The telephone number of Registrar andTransfer is 800-866-1340.

 

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

 

None

 

**ITEM 3.****    ****DEFAULTS UPON SENIOR SECURITIES**

 

None

 

**ITEM 4.****    ****SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

None

 

**ITEM 5.****    ****OTHER INFORMATION**

 

None

 

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**ITEM 6.****    ****EXHIBITS AND REPORTS ON FORM 8-K**

 
| a)     | Exhibits                                     |
|--------|----------------------------------------------|
|   | i.                                           | Exhibit 31, Certification pursuant to  Rule 13a-14(a)/15d-14(a) |
|   | ii.                                          | Exhibit 32.1, Certification pursuant to 18 U.S.C.  Section 1350 |
| b)     | Reports on Form 8-K during the quarter: |
|   | i.                                           | Form 8-K filed July 26, 2005, announcing the termination by  the Company of the settlement agreement dated January 31, 2005. |
|   | ii.                                          | Form 8-K filed September 6, 2005, announcing and accepting  the resignation of Connie Matthews. |
|   | iii.                                         | Form 8-K filed September 6, 2005, announcing a reverse  split and name change of the Company to the current name, PBS Holding, Inc. |

 

 

SIGNATURES

 

Inaccordance with the requirements of the Exchange Act, the registrant causedthis report to be singed on its behalf by the undersigned, there unto dullyauthorized, this 11th day of November, 2005.

 

 
| /s/ Patrick Matthews                                     |   |
|----------------------------------------------------------|--------|
| Patrick Matthews                                         |
| President, Chief Executive Officer and                   |
| Chief Financial Officer and Principal Accounting Officer |
| PBS Holding, Inc.                                   |

 

 

(THIS SPACE HAS BEEN LEFT BLANKINTENTIONALLY)

 

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