**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-KSB**




(Mark
      One)




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




**For
      the fiscal year ended December 31, 2006**




**o**
            **TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**




**For
      the transition period from ___________ to ___________**




**Commission
      file number** **333-132429**




**AMERICAN
      BUSINESS HOLDINGS INC.**


Exact
      name of registrant as specified in its charter)




**Delaware**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)**1223
                Wilshire Boulevard, Suite 851**
              **Santa
                Monica CA**
            **90403**(Address
                of principal executive offices)
            (Zip
                Code)Registrant’s
                telephone number, including area code:
            **(310)
                395-7123**Securities
                registered under Section 12(b) of the Exchange Act:Title
                of each class
            Name
                of each exchange on which registered**None**
            **None**Securities
                registered under Section 12(g) of the Exchange Act:**Common
                Stock, par value $.001**(Title
                of class)




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




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes x No o





State
      issuer’s revenues for its most recent fiscal year. $4,807,684





Aggregate
      market value of the Common Stock held by non-affiliates of the Company as of
      December 31, 2006: 8,20 0,000




Number
      of
      shares of the registrant’s common stock outstanding as of March 28,
      2007: 82,000,000 shares of Common Stock










**TABLE
      OF CONTENTS**








**Part
                I**Item
                1.
            Description
                of Business.Item
                2.
            Description
                of Property.Item
                3.
            Legal
                Proceedings.Item
                4.
            Submission
                of Matters to a Vote of Security Holders.**Part
                II**Item
                5.
            Market
                for Common Equity and Related Stockholder Matters.Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operations.Item
                7.
            Financial
                Statements.Item
                8.
            Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure.Item
                8A.
            Controls
                and Procedures.Item
                8B.
            Other
                Information.**Part
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act.Item
                10.
            Executive
                Compensation.Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.Item
                12.
            Certain
                Relationships and Related Transactions.Item
                13.
            Exhibits.Item
                14.
            Principal
                Accountant Fees and Services.**Signatures**

















*Except
      as otherwise required by the context, all references in this prospectus to
      "we",
      "us”, "our", “BMSTA”, or "Company" refer to the consolidated operations of
      American Business Holdings, Inc.., a Delaware corporation, and its wholly owned
      subsidiaries.*




**Forward-Looking
      Statements and Associated Risks**






*The
      Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
      certain forward-looking statements. Some of the statements contained in this
      annual report of the Company discuss future expectations, contain
      projections of our operations or financial condition or state other
      forward-looking information. Some statements contained in this annual report
      on
      Form 10-KSB that are not historical facts (including without limitation
      statements to the effect that we "believe," "expect," "anticipate," "plan,"
      "intend," "foresee," or other similar expressions) and are forward-looking
      statements. These forward-looking statements are based on our current
      expectations and beliefs concerning future developments and their potential
      effects on us. There can be no assurance that future developments affecting
      us
      will be those anticipated by us. All comments concerning our expectations for
      future revenue and operating results are based on our forecasts of our plan
      of
      operation and do not include the potential impact of any future acquisitions
      or
      operations. These forward-looking statements involve significant risks and
      uncertainties (some of which are beyond our control) and assumptions. Should
      one
      or more of these risks or uncertainties materialize, or should any of our
      assumptions prove incorrect, actual results may vary in material respects from
      those projected in the forward-looking statements.*




**PART
      I**


**Item
      1.**    **Description
      of Business.**




**General**




We
      were
      incorporated as a Delaware Corporation on September 9, 2004 as a holding vehicle
      to own and control textile and plastic packaging companies in Central and East
      Africa. On September 12, 2004, we completed a Stock Purchase Agreement and
      Share
      Exchange in which we purchased all of the outstanding membership shares in
      Tissakin Ltd., a Democratic Republic of Congo Corporation, so that Tissakin
      Ltd.
      became our wholly owned subsidiary. Now, through our wholly owned subsidiary,
      Tissakin Ltd., (“Tissakin”) we are a manufacturer of bags for packaging
      agricultural products in the Democratic Republic of Congo.




Tissakin
      was established in 1952 as Tissaco by FICO (Financing and Commercialization
      of
      Fiber), a Belgian holding company that invested heavily in what was then the
      Belgian Congo. The company’s name was changed to Tissakin after 1960 when the
      Belgian Congo gained independence. Tissakin expanded its operations in 1997
      by
      purchasing plant, property and equipment, and establishing a factory for making
      packaging bags from natural jute fiber, polypropylene and polyethylene. In
      2000,
      Tissakin purchased a polypropylene/polyethylene recycling machine from Taiwan,
      and its installation has significantly reduced manufacturing costs.




**Products
      and Services**




In
      the
      DRC, Tissakin is the manufacturer of bags for packaging agricultural products.
      Tissakin’s bags are made of jute, and from polypropylene and polyethylene
      granules. Tissakin purchases 65% of its jute from local sources and 35% from
      Bangladesh. Most polypropylene and polyethylene is purchased from South Africa
      because of favorable freight charges. Some granules are purchased from Belgium,
      Spain, France, Malaysia, South Korea, Brazil, Indonesia and the United
      States.




**Competition**




International
      regulations require that coffee, cacao, and tobacco be packed and exported
      in
      jute bags. In this, Tissakin is the only jute factory in the DRC.





There
      is
      one other manufacturer of polypropylene bags in the DRC, however, Tissakin
      has a
      secured an advantageous market position because of brand recognition in the
      DRC.
      Competitive polypropylene bags are manufactured in China, India, Zambia, and
      Zimbabwe. However, such foreign-based manufacturers have been subject to
      interruptions in the supply-chain. Because Tissakin is a DRC company, it does
      not face the same uncertainties and risks associated with importing.
      Additionally, Tissakin’s pricing policy for its polypropylene bags is to match
      or better its competitors’ prices.




Tissakin
      established the polyethylene product line as a vertical integration to produce
      liners for use in its polypropylene bags. Over 70% of Tissakin’s polyethylene
      production becomes liners for Tissakin’s polypropylene bags; the remaining
      capacity is used to produce plastic bags for such established clients as the
      local hotels and other shopping marts.











**Significant
      Clients**





During
      the year ended December 31, 2006, the following were Tissakin’s significant
      clients:




1.
            Compagnie
                Sucriere de Kwilu Ngongo (CSKN), a Belgian owned local sugar producer
                with
                corporate offices in Brussels. CSKN buys nearly 15% of Tissakin’s annual
                production of bags.2.
            Midema
                is the largest flourmill in the DRC and is the second largest client
                of
                Tissakin. The Seaboard Corp., a US company with corporate offices
                in the
                vicinity of Washington, D.C, owns Midema. Midema accounts for 15%
                of our
                sales.3.
            CILU,
                a Belgian-owned cement factory is approximately 10% of our
                sales4.
            CDI
                BWAMANDA, a Vatican-financed company dealing in agricultural products,
                is
                approximately 10% of our sales.5.
            Other
                clients of Tissakin include the United Nations Development Program
                (UNDP),
                UNHCR, and the European Community. All are important clients for
                Tissakin
                as there are numerous United Nations and EEC-sponsored agricultural
                programs in the DRC. These combined account for about 25% of our
                sales.




The
      above-mentioned customers purchased over 60% of Tissakin’s production during the
      year ended December 31, 2006. The remaining production was sold to small local
      agricultural producers in various parts of the country as well as various
      agricultural projects sponsored by the Congolese Government under their National
      Service and Strategic Governmental Reserves programs such as the World Food
      Program and CTB, which is the Belgium Government aid organization.





**Suppliers**




Tissakin
      maintains a strict policy of not having any contractual agreements with any
      raw
      material suppliers. This gives us flexibility in terms of negotiating the best
      price and quality for our raw material with any supplier we chose. We do not
      have any long term contracts, they are terminable at will, without any material
      termination clauses. We deal in the spot market with brokers or direct suppliers
      on a as needed basis.




**Employees**




Syed
      Irfan Husain, our President, Chief Executive Officer, and Chief Financial
      Officer is our sole employee. However, our wholly owned subsidiary, Tissakin,
      employs 235 workers. From time to time, Tissakin also engages daily hires to
      help out with non-production related chores such as offloading raw material
      or
      other menial labor.




**Governmental
      Regulations**




There
      are
      no governmental approvals necessary to conduct our current business and the
      consulting industry is not generally subject to any governmental regulation.
      Although this permits us to provide our services without the time and expense
      of
      governmental supervision it also allows competitors to more easily enter this
      business market.




**Subsequent
      Events**


On
        March
        9, 2007, the Company effectuated a 10-1 forward split of its issued and
        outstanding which increased the Company’s outstanding shares from 8,200,000
        shares to 82,000,000 shares.




**Item
      2.**   **Description
      of Property.**





We
      currently use the offices of management at 1223 Wilshire Boulevard, Suite 851,
      Santa Monica CA 90403. This office space is leased to us for $500 per month
      on a
      month to month basis. We believe that this space is sufficient and adequate
      to
      operate our current business.




We
      also
      own property, plant and equipment located in the Democratic Republic of Congo,
      in the City of Kinshasa. The company maintains an on premise repair, maintenance
      and machine shop managed by engineers, to keep all production equipment in
      working order. This shop also maintains the property, building and plant in
      working order and does repairs and upkeep as needed as well as plant expansion
      and upgrades. Overall the condition of the property, plant and equipment is
      maintained in working order and is kept in good condition.





**Item
      3.**   **Legal
      Proceedings.**




Neither
      the Company nor any of its subsidiaries is a party to any pending or threatened
      legal proceedings.







**Item
      4.**   **Submission
      of Matters to a Vote of Security Holders.**




None


**PART
      II**







**Item
      5. M** **arket
      for Common Equity and Related Stockholder Matters.**




**Market
      Information**





There
      is
      presently no public market for our common stock. We anticipate applying for
      trading of our common stock on the over the counter bulletin board upon the
      effectiveness of the registration statement of which this prospectus forms
      apart. However, we can provide no assurance that our shares will be traded
      on
      the bulletin board or, if traded, that a public market will
      materialize.





**Holders**




As
        of
        March 28, 2007, in accordance with our transfer agent records, we had 44
        record
        holders of our Common Stock, holding 82,000,000 shares. On
        March
        9, 2007, the Company effectuated a 10-1 forward split of its issued and
        outstanding which increased the Company’s outstanding shares from 8,200,000
        shares to 82,000,000 shares.





**Dividends**





Holders
      of our common stock are entitled to receive dividends if, as and when declared
      by the Board of Directors out of funds legally available therefore. We have
      never declared or paid any dividends on our common stock. We intend to retain
      any future earnings for use in the operation and expansion of our business.
      Consequently, we do not anticipate paying any cash dividends on our common
      stock
      to our stockholders for the foreseeable future.





**Recent
      Sales of Unregistered Securities**




On
      September 12, 2004, we issued a total of 8,000,000 shares of our common stock
      to
      the following individuals: (i) 6,448,000 shares of our common stock to Sayed
      Idris Husain; (ii) 776,000 shares of our common stock to Sayed Imran Husain;
      and, (iii) 776,000 shares of our common stock to Sayed Ifran Husain. Such shares
      were issued pursuant to the Stock Purchase Agreement and Share Exchange between
      us and Tissakin, Ltd. in which we acquired all of the issued and outstanding
      membership shares, consisting of 216,000 of such shares, of Tissakin, Ltd.
      and
      were issued in reliance on an exemption from registration under Section 4(2)
      of
      the Securities Act of 1933.




These
      shares of our common stock qualified for exemption under Section 4(2) of the
      Securities Act of 1933 since the issuance shares by us did not involve a public
      offering. The offering was not a “public offering” as defined in Section4(2) due
      to the insubstantial number of persons involved in the deal, size of the
      offering, manner of the offering and number of shares offered. We did not
      undertake an offering in which we sold a high number of shares to a high number
      of investors. In addition, each shareholder had the necessary investment intent
      as required by Section 4(2) since each agreed to and received a share
      certificate bearing a legend stating that such shares are restricted pursuant
      to
      Rule 144 of the 1933 Securities Act. This restriction ensures that these shares
      would not be immediately redistributed into the market and therefore not be
      part
      of a “public offering.” Based on an analysis of the above factors, we have met
      the requirements to qualify for exemption under Section 4(2) of the Securities
      Act of 1933 for this transaction.




In
      December 2004, we completed a Regulation D, Rule 506 Offering in which we issued
      a total of 245,000 shares of our common stock to a total of 41 investors at
      a
      price per share of $.20 for an aggregate offering price of $40,000.




The
      following sets forth the identity of the class of persons to whom we sold these
      shares and the amount of shares for each shareholder:










**Shareholder**
              **Number
                  of Shares Purchased**Allotta,
                  Nick
              5,500Anklesaria,
                  Neville A.
              6,000Carrigan,
                  Aileen
              2,500Carrigan,
                  Patrick E.
              5,000Carrigan,
                  Richard S.
              2,500Dadlani,
                  Trith
              8,000Day,
                  Trent
              2,750Ebeling,
                  Mit
              5,000Ervine,
                  Shireen
              7,000Ford,
                  James B.
              12,500Frey,
                  Richard
              2,000Geisbauer,
                  Anthony
              2,500Hunter,
                  Adrianna R.
              2,875Juarez,
                  Hector M.
              2,500Khan,
                  Samar
              3,000Kughn,
                  John C.
              5,000Kundson,
                  William
              2,750Marhefka,
                  David G.
              10,000Marquez,
                  Charles
              2,500Mehta,
                  Deepak R.
              8,500Miller,
                  Dennis L.
              2,500Moore,
                  Dale M.
              10,000Orslock,
                  Mark
              2,500Otto,
                  Amy D.
              7,500Schilcher,
                  Carol K.
              10,000Scoby,
                  Aaron
              7,500Seebeck,
                  Melody A.
              6,000Srichai,
                  Bussaya
              3,000Srichai,
                  Montri
              3,750Staehr,
                  Jirawan
              2,500Staehr,
                  Steven
              4,125Starut,
                  Jirasauk
              3,500Starut,
                  Tidd
              5,000Sterner,
                  Shane
              2,500Stidham,
                  Mark
              5,000Turner,
                  David
              2,500Vahosky,
                  John A.
              5,000Vargo,
                  Brian
              2,500Vidan-Peled,
                  Yaron
              8,500Whelton,
                  Gloria
              5,000Wright,
                  Diane L.
              2,750
  The
        Common Stock issued in our Regulation D, Rule 506 Offering was issued in
        a
        transaction not involving a public offering in reliance upon an exemption
        from
        registration provided by Rule 506 of Regulation D of the Securities Act of
        1933.In accordance with Section 230.506 (b)(1) of the Securities Act of 1933,
        these shares qualified for exemption under the Rule 506 exemption for this
        offerings since it met the following requirements set forth in Reg.
        ss.230.506:
  (A)
              No
                  general solicitation or advertising was conducted by us in connection
                  with
                  the offering of any of the Shares.(B)
              Each
                  investor received a copy of our private placement memorandum and
                  completed
                  a questionnaire to confirm that they were either “accredited” or
                  “sophisticated” investors as defined in Rule 501 of Regulation D. Of the
                  41 subscribers, 6 were “accredited investors” and 35 were “sophisticated
                  investors.” Each sophisticated investor completed a questionnaire
                  confirming that such investor has such knowledge and experience
                  in
                  financial and business matters that he/she is capable of evaluating
                  the
                  merits and risks of the prospective
                  investment.
  (C)
              Our
                  management was available to answer any questions by prospective
                  purchasers;
  (D)
              Shares
                  issued in connection with in this offering were restricted under
                  Rule 4(2)
                  and certificates indicating ownership of such shares bore the appropriate
                  legend.
  Please
        note that pursuant to Rule 506, all shares purchased in the Regulation D
        Rule
        506 offering completed in December 2004 were restricted in accordance with
        Rule
        144 of the Securities Act of 1933.












**Item
      6.**   **Management’s
      Discussion and Analysis or Plan of Operations.**





*The
      following discussion contains forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934 relating to future events or our future performance. Actual
      results may materially differ from those projected in the forward-looking
      statements as a result of certain risks and uncertainties set forth in this
      prospectus. Although management believes that the assumptions made and
      expectations reflected in the forward-looking statements are reasonable, there
      is no assurance that the underlying assumptions will, in fact, prove to be
      correct or that actual results will not be different from expectations expressed
      in this report.*





**Overview**





We
      were
      incorporated as a Delaware Corporation on September 9, 2004 as a holding vehicle
      to own and control a textile and plastic packaging company in Central and East
      Africa. On September 12, 2004, we completed a Stock Purchase Agreement and
      Share
      Exchange in which we purchased all of the outstanding membership shares in
      Tissakin Ltd., a Democratic Republic of Congo Corporation, so that Tissakin
      Ltd.
      became our wholly owned subsidiary.




Through
      its wholly owned subsidiary, Tissakin Ltd., we are a manufacturer of bags for
      packaging agricultural products in the Democratic Republic of Congo. The bags
      are made of jute and polypropylene and polyethylene granules. The comparative
      results of business activity discussed are that of American Business Holdings
      Inc. and its subsidiary, Tissakin for the years ended December 31, 2005 and
      2004
      and the quarters ended June 30, 2006 and June 30, 2005.




The
      demand for our products has been growing every year for the last several years.
      There is substantial amount of aid that is being donated to the D.R. Congo
      from
      institutions such as the World Bank, International Monetary Fund as well as
      direct aid from USA and the European Community. A large percent of this aid
      is
      for agricultural and infrastructure projects. Tissakin, being an agricultural
      packaging company in the D. R. Congo, is in an position to benefit directly
      from
      the increased agricultural production that will derive from this aid. We feel
      there’s an need to initially double our capacity from a production of 15 million
      bags per year to 30 million.. Therefore, our ability to achieve our business
      objectives is contingent upon our success in raising additional capital to
      enter
      new markets and then rely on cash flows from operations for future
      growth








**Plan
      of Operations**





During
      the next twelve months, we expect to take the following steps in connection
      with
      the further development of our business and the implementation of our plan
      of
      operations:




We
      will
      focus on striking more sales agreements. Based on the increase in our market,
      we
      believe we should expand our operations in related plastic fields as well as
      continue to reinvest in our core business of sack production. We have identified
      two areas for investment/expansion.





The
      first
      area we have identified is our core business of sack production. Based on the
      fact that we have to import bags to meet the demands of our customer, we feel
      that we have room to grow our core business to meet demand. The past years
      of
      neglect and civil wars have taken their toll on the agricultural sector. But
      with the infusion of direct monetary and material aid, the prospects for the
      agricultural sector look more promising than at any time in this nation’s
      history.




We
      need
      to keep pace with the increasing demand for bags as the agricultural output
      increases in the D.R. Congo. If we allow demand to surpass our ability to
      supply, we risk competition from imports from India and China. In order to
      meet
      increasing demand, we believe that we need to double our existing capacity
      to at
      least 30 million bags per year.




In
      order
      to achieve this objective, we will need to purchase 6-8 looms at an approximate
      cost of $150,000. We will also need to hire an additional 100 workers. Our
      raw
      material consumption and cost will also rise but these costs will be offset
      by
      the increase in sales.




Another
      area we’ve identified for diversification is in blow-molding. There’s a large
      demand for 1-4 liter, 4-liter, 5-liter, 20-liter, and 30-liter plastic jerry
      cans. In Oct 2005, Tissakin already set up a small scale project to test the
      market with Taiwanese machines. In its first few months of operation, we’ve
      managed to procure a contract to supply the European oil company, TOTAL, with
      1-liter and 4-liter jerry cans and the local market with our own model of
      5-liter jerry cans. With the order from TOTAL, Tissakin is already over its
      capacity. Towards, the middle of 2006, we’ll have to double the capacity of our
      blow molding section.




The
      second area for investment/expansion is plastic containers. We are forecasting
      an increase in the production of palm oil in the DRC. Palm oil is the main
      ingredient in all Congolese cooking and is packaged in 5-liter plastic “jerry
      cans.”  There is also an increasing need for potable drinking water for the
      population. Many companies are now in the business of providing clean drinking
      water locally. Both of these products need to be packed in 5-liter containers
      for easy handling. The management at Tissakin has already set up a primary
      production unit for the 5-liter jerry cans and besides supplying to the local
      companies producing oil and water, we provide 1 liter and 4 liter jerry cans
      to
      a European oil company, Total/Fina. We feel that the existing capacity is not
      enough to supply the local oil and water producers as well as Total/Fina and
      will have to increase the capacity in 2006.




Our
      machines can make up to 5-liter jerry cans which are what the local market
      absorbs the most. A blow molding machine of 5-liter jerry cans can produce
      bottles of 500ml to jerry cans of 5-liter. There are no changes required to
      the
      machine. The changes are only in the mold in that a 1-liter mold is smaller
      than
      a 5-liter mold and thus the changes are mostly in cycle time and the adaptations
      that come incorporated in the mold to allow a machine of 5-liter to produce
      a
      smaller item. The cycle time refers to the time required to produce one unit.
      The cycle time for a 5-liter jerry can may be around 45 seconds whereas for
      a
      1-liter, it may be around 15 seconds. Our machines also have a built in quality
      control device which allows us to not only adjust the cycle time but also to
      pick the areas of the mold where we want to inject more material or
      less.




Tissakin
      needs to double its existing capacity of sack production. The cost per loom,
      is
      approximately Usd 20.000 and we estimate that we will need to add 6-8
      looms.




Tissakin
      will need to add to its capacity of blow-molding. The existing capacity of
      only
      one blow-molding extruder is insufficient as almost 60% of this capacity is
      already used up by one client alone, namely Total/Fina Oil Company. The
      remaining 40% capacity is insufficient to satisfy the demand for 5-liter jerry
      cans. We feel the need to add another blow-molding machine of 1-liter to 5-liter
      capacity and another machine that will produce jerry cans of 10-liter, 20-liter,
      and 30-liters. The cost of the 5-liter machine is approximately Usd 250.000
      and
      the larger capacity machine will be approximately Usd 400.000. The 5-liter
      mold
      will cost approximately Usd 15.000 and the 10, 20, and 30-liter molds cost
      approximately Usd 25,000, Usd




In
      order
      to increase our capacity, we will attempt to raise capital from sale of our
      common stock, business lines of credit, and loans from investors, shareholders
      or management, and/or joint venture partners. At present, we have no financing
      agreements with any institutions. Management will use its best efforts to raise
      the additional funds carry out the planned program but there is significant
      risk
      that we may not secure the necessary funding.








Revenues





For
      the
      year ended December 31, 2006 our revenue increased by   $1,010,346 to
      $4,807,6804  as compared to $3,797,338 for the year   ended December
      31, 2005. The
      increase is due to an increase in overall sales of our main product line, ie.
      polypropylene bags, as well as plastic sachets and an increase in sales of
      our
      new Product lines like Water/Oil jerry cans. . One of our major existing
      customers to whom the sales have increased during the year is B.T.C.(Belgian
      Technical Co-operation). This is due to increase in agricultural aid from
      Belgian Govt. to Congo.




We
      were
      able to take advantage of increase in demand by increasing the selling price
      of
      our products to new customers. Ministry of Agriculture, Govt. of Republic of
      Congo is our new client, which started buying our products in year 2006.




Total
      Expenses





Cost
      of
      Sales increased from $3,498,253 for the year ending   December 31, 2005 to
      $4,126,520 for the year ending December 31,  2006, an increase of $628,267.





General
      and administrative expense which includes office expenses, travel and
      entertainment, and professional fees increase from $251, 483 for the year ended
      December 31, 2005 to $555,135 for the year ended December 31, 2006.   Non
      depreciation General and Administrative expenses increased from $41,885 for
      the
      year ended   December 31, 2005 to $343,672 for the year ended December 31,
      2006. The increase in our general and administrative expenses was due to
      additional expenses required in order to become a publicly traded company,
      and
      remain in compliance with all reporting requirements. These additional expenses
      include traveling cost, legal and accounting fees, auditing fees and
      professional fees associated  with
      obtaining public listing. The general and administrative overheads also include
      travel and entertainment cost regarding other overseas business trips which
      were
      incurred in the process of our company’s public listing.





Net
      Income





Our
      net
      income from operations increased from $25,761 for the   fiscal year ending
      December 31, 2005 to $68,984 for the year ended  December31, 2006.
 The increase in Net Income was due to an   increase in revenues and
      gross margins.





**Liquidity
      and Capital Resources**




We
      raised
      $40,000 in a private placement in December 2004 and have a cash balance at
      December 31, 2006 of $ 1,055,497 .
      These
      funds, as well as our business activity, will allow us to have positive cash
      flows for the current year.




We
      have
      historically satisfied our cash requirements through revenues, short term
      financings, and issuance of common stock for cash. We anticipate that cash
      requirements will continue to increase as we continue to expend resources to
      build infrastructure, pursue additional markets, and establish support and
      administrative organizations. At present, we have no lines of credit or any
      financing agreements in place. The company believes that any long term or short
      term liquidity needs are sufficiently met by our cash balance in the company.
      We
      intend to fund any material expenses for capital expenditures with our cash
      balance.




In
      March,
      2006 the Company filed a registration statement with the SEC which was declared
      effective in February 2007 registering shares of Common Stock issued to
      investors in connection with the private placement in December
      2004.




**Recent
      Accounting Pronouncements**




In
      May
      2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections. This
      Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
      No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
      the requirements for the accounting for and reporting of a change in accounting
      principle. This Statement applies to all voluntary changes in accounting
      principle. It also applies to changes required by an accounting pronouncement
      in
      the unusual instance that the pronouncement does not include specific transition
      provisions. SFAS 154 also requires that a change in depreciation, amortization
      or depletion method for long-lived, nonfinancial assets be accounted for as
      a
      change in accounting estimate affected by a change in accounting principle.
      This
      Statement is effective in fiscal years beginning after December 15, 2005. The
      Company has not yet determined the effect of implementing this
      standard.




SFAS
      155,
      Accounting for Certain Hybrid Financial Instruments and SFAS 156, Accounting
      for
      Servicing of Financial Assets were recently issued. SFAS 155 and 156 have no
      current applicability to the Company and have no effect on the financial
      statements.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements, financings, or other relationships
      with
      unconsolidated entities or other persons, also known as “special purpose
      entities” (SPEs).











**Item
      7.**    **Financial
      Statements.**




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 
 **CONSOLIDATED
        FINANCIAL STATEMENTS**
 
 
 **AS
        OF DECEMBER 31, 2006 AND 2005**
  
 
 
 
 
 
 
 
 
 
 
 **AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 **Financial
        Statements Table of Contents**
 
 
 **FINANCIAL
                  STATEMENTS**
              **Page**Independent
                  Auditor’s Report
              F-1Balance
                  Sheets
              F-2Statements
                  of Operations
              F-3Statements
                  of Stockholders’ Equity
              F-4Statements
                  of Cash Flows
              F-5Notes
                  to the Financial Statements
              F-6
 
 
  
 
 
 
  
 **Report
        of Independent Registered Public Accounting Firm**
 
 
 
 
 We
        have
        audited the accompanying balance sheets of American Business Holding Corporation
        as of December 31, 2006 and December 31, 2005 and the related statements
        of
        operations, stockholders’ equity, and cash flows for the twelve months then
        ended. These financial statements are the responsibility of company’s
        management. Our responsibility is to express an opinion on these financial
        statements based on our audit.
 
 We
        conducted our audit in accordance with standards of The Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statements presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of American Business Holding
        Incorporated at December 31, 2006 and December 31, 2005 and the results of
        its
        operations and its cash flows for the twelve months then ended in conformity
        with U.S. Generally Accepted Accounting Principles.
 
 
 
 Gately
        & Associates, L.L.C.
 Altamonte
        Springs, FL
 March
        27,
        2007






F-1




**AMERICAN
                  BUSINESS HOLDING CORPORATION****AND
                  SUBSIDIARY****CONSOLIDATED
                  BALANCE SHEETS****As
                  of December 31, 2006 and December 31, 2005****ASSETS****CURRENT
                  ASSETS**
              
              **12/31/06**
              
              **12/31/05**Cash
              
              $
              1,055,497
              
              $
              879,925Accounts
                  Receivable
              
              
              1,659,191
              
              
              1,263,328Inventory
              
              
              1,446,751
              
              
              1,218,754Total
                  Current Assets
              
              
              4,161,439
              
              
              3,362,007**PROPERTY,
                  PLANT & EQUIPMENT**Property,
                  Plant
                  & Equipment
              
              
              32,650,535
              
              
              32,524,412Less:
                  Accumulated Depreciation
              
              
              (11,262,957
              )
              
              (10,171,491
              )Total
                  Property & Equipment
              
              
              21,387,578
              
              
              22,352,921**TOTAL
                  ASSETS**
              
              **$**
              **25,549,017**
              
              **$**
              **25,714,928****LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES**Accounts
                  Payable
              
              $
              104,532
              
              $
              339,077Accrued
                  expenses
              
              
              4,682
              
              
              5,032Total
                  Current Liabilities
              
              $
              109,214
              
              $
              344,109**OTHER
                  LIABILITIES**Customer
                  Deposits
              
              
              1,639
              
              
              1,639Total
                  Other Liabilities
              
              $
              1,639
              
              $
              1,639**TOTAL
                  LIABILITIES**
              
              $
              110,853
              
              $
              345,748**STOCKHOLDERS'
                  EQUITY**Common
                  Stock, $.001 par value;Authorized:
                  25,000,000 sharesIssued
                  & Outstanding: 8,200,000 shares
              
              
              8,200
              
              
              8,200Additional
                  paid
                  in capital
              
              
              23,031,800
              
              
              23,031,800Retained
                  earnings
              
              
              2,398,164
              
              
              2,329,180Total
                  Stockholder's Equity
              
              
              25,438,164
              
              
              25,369,180**TOTAL
                  LIABILITIES & STOCKHOLDER'S EQUITY**
              
              **$**
              **25,549,017**
              
              **$**
              **25,714,928**




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








F-2




**AMERICAN
                  BUSINESS HOLDING CORPORATION****AND
                  SUBSIDIARY****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****For
                  the twelve months ending December 31, 2006 and
                  2005****12/31/06**
              
              **12/31/05****REVENUE**
              
              $
              4,807,684
              
              $
              3,797,338**COST
                  OF REVENUE**
              
              
              4,126,520
              
              
              3,498,253**GROSS
                  PROFIT OR (LOSS)**
              
              
              681,164
              
              
              299,085**GENERAL
                  AND ADMINISTRATIVE EXPENSES**
              
              
              555,135
              
              
              251,483**OPERATING
                  INCOME**
              
              
              126,029
              
              
              47,602**INCOME
                  TAX EXPENSE**
              
              
              57,045
              
              
              21,841**NET
                  INCOME OR (LOSS)**
              
              $
              68,984
              
              $
              25,761**Earnings
                  (loss) per share, basic and diluted**
              
              $
              0.01
              
              $
              0.00**Weighted
                  average number of common shares**
              
              
              8,200,000
              
              
              8,200,000




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




F-3




**AMERICAN
                  BUSINESS HOLDING CORPORATION****AND
                  SUBSIDIARY****STATEMENT
                  OF STOCKHOLDERS' EQUITY****As
                  of December 31, 2006****ADDITIONAL****COMMON**
              
              **PAR**
              
              **PAID
                  IN**
              
              **ACCUM.**
              
              **TOTAL****STOCK**
              
              **VALUE**
              
              **CAPITAL**
              
              **DEFICIT**
              
              **EQUITY**Balance,
                  December 31, 2003
              
              
              8,000,000
              
              $
              8,000
              
              $
              22,992,000
              
              $
              2,337,801
              
              $
              25,337,801Distributions
              
              
              
              
              
              
              
              
              
              
              
              (54,847
              )
              
              (54,847
              )Stock
                  issued for cash duringDecember
                  2004 for $0.20 pershare
              
              
              200,000
              
              
              200
              
              
              39,800
              
              
              
              
              
              40,000Net
                  income (loss)
              
              
              -
              
              
              -
              
              
              -
              
              
              20,465
              
              
              20,465Balance,
                  December 31, 2004
              
              
              8,200,000
              
              
              8,200
              
              
              23,031,800
              
              
              2,303,419
              
              
              25,343,419Net
                  income (loss)
              
              
              -
              
              
              -
              
              
              -
              
              
              25,761
              
              
              25,761Balance,
                  December 31, 2005
              
              
              8,200,000
              
              
              8,200
              
              
              23,031,800
              
              
              2,329,180
              
              
              25,369,180Net
                  Income (loss)
              
              
              -
              
              
              -
              
              
              -
              
              
              68,984
              
              
              68,984Balance,
                  December 31, 2006
              
              
              8,200,000
              
              
              8,200
              
              
              23,031,800
              
              
              2,398,164
              
              
              25,438,164




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








F-4




**AMERICAN
                  BUSINESS HOLDING CORPORATION****AND
                  SUBSIDIARY****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****For
                  the twelve months ending December 31, 2006 and
                  2005****CASH
                  FLOWS FROM OPERATING ACTIVITIES**
              
              **12/31/06**
              
              **12/31/05**Net
                  income (loss)
              
              $
              68,984
              
              $
              25,761Adjustments
                  to reconcile net income to net cashprovided
                  by
                  (used in) operating activities:Depreciation
              
              
              1,091,465
              
              
              1,073,718Increase
                  (Decrease) in Accounts Receivable
              
              
              (395,863
              )
              
              (341,896
              )Increase
                  (Decrease) in Inventory
              
              
              (227,997
              )
              
              (601,453
              )(Increase)
                  Decrease in Accounts Payable
              
              
              (234,545
              )
              
              (15,691
              )(Increase)
                  Decrease in Accrued Expenses
              
              
              (350
              )
              
              1,948Increase
                  (Decrease) in Customer Advances
              
              
              -
              
              
              1,505Total
                  adjustments to net income
              
              
              232,710
              
              
              118,131Net
                  cash provided by (used in) operating activities
              
              
              301,694
              
              
              143,892**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Cash
                  paid for Property, Plant & Equipment
              
              
              (126,123
              )
              
              (237,227
              )Net
                  cash flows provided by (used in) investing activities
              
              
              (126,123
              )
              
              (237,227
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**None
              
              
              -
              
              
              -Net
                  cash provided by (used in) financing activities
              
              
              -
              
              
              -**CASH
                  RECONCILIATION**Net
                  increase (decrease) in cash
              
              
              175,572
              
              
              (93,335
              )Cash
                  - beginning balance
              
              
              879,925
              
              
              973,260**CASH
                  BALANCE END OF PERIOD**
              
              $
              1,055,497
              
              $
              879,925






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








F-5




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 NOTES
        TO
        THE FINANCIAL STATEMENTS








1. Summary
      of Significant Accounting Policies:





Industry:


American
      Business Holding Corporation (the Company) was incorporated on September 9,
      2004
      in the State of Delaware with its resident agent located in Delaware. The
      Company’s fiscal year end is December 31, a calendar year. During September of
      2004 the Company commenced operations with the acquisition of Tissakin Ltd.
      (the
      Subsidiary). The Parent Company issued 8,000,000 shares of its common stock
      in
      exchange for all of the 216,000 outstanding shares of the
      Subsidiary.





The
      Subsidiary was incorporated in 1947 at Kinshasa, the then Belgian Congo under
      the name Tissaco Ltd. During the year 1960 the name was changed to Tissakin
      Ltd.
      The Subsidiary is engaged in the manufacturing and sale of bags for mainly
      agricultural packaging in the Democratic Republic of Congo since 1998. The
      Subsidiary is the principal manufacturer of bags for agricultural packaging in a
      country that produces coffee, cacao, manioc, rice, sugar, maize, corn flour
      as
      well as tea and tobacco. The country’s climate is tropical, yet mild, which
      allows for continuous agricultural production throughout the year.





Cash
      and Cash Equivalents :


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





Functional
      Currency:


All
      amounts in the Company’s financial statements and related footnotes are stated
      in U.S. Dollars. The Company had no significant gains or losses from foreign
      currency transactions and no material adjustments to the financial statements
      for translation adjustments. The functional currency of the Company is U.S.
      Dollars, but the Company does keep minimal amounts in the local currency for
      transactions on a day to day basis in a country that uses U.S. Dollars as well
      as its currency. The Company reviews its compliance with Statement of Financial
      Accounting Standards (SFAS) n° 52 on a quarterly basis.





Basis
      of Accounting :


The
      Company’s financial statements are prepared in accordance with U.S. Generally
      Accepted Accounting Principles (GAAP). Revenues and expenses associated with
      the
      manufacture of packaging and sale are accounted for as revenue and expense
      when
      sold. No extended warranties exist.




Estimates
      and adjustment -The
      Company’s management is of the opinion that all estimates and adjustment have
      been made in accordance with Generally Accepted Accounting Principles in order
      for the financial statements to not be misleading.




The
      preparation of financial statements in conformity with U.S. Generally Accepted
      Accounting Principles (GAAP) requires management to make estimates and
      assumptions that effect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.





The
      Accounting Acquirer - Prior
      to the acquisition of the Subsidiary, the Company was a non-operating
      corporation with nominal assets in the form of cash. The owners and management
      of the Subsidiary, a private operating company, have operating control of the
      Company as a result of the transaction. Therefore, this transaction is a capital
      transaction in substance, rather than a business combination, in the form of
      a
      share exchange.





F-6




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 NOTES
        TO
        THE FINANCIAL STATEMENTS





That
      is,
      the transaction is equivalent to the issuance of stock by a private company,
      the
      Parent, for the stock of the subsidiary which resulted in a re-capitalization
      of
      the Parent Company. The accounting is identical to that resulting from a reverse
      acquisition, except no goodwill or other intangible assets are recorded. Because
      the Subsidiary Company is essentially then treated as the acquirer for
      accounting purposes, the equity accounts are adjusted for the share exchange
      and
      carried forward. Prior accumulated deficits of the Parent Company are adjusted
      to additional paid in capital therefore carrying forward the accumulated deficit
      or earnings of the Subsidiary Company.





Revenue
      Recognition :


Revenues
      resulting from the manufacture of packaging are recognized when sold. A deferred
      revenue account has been established in the financial statements for deposits
      given in advance of sale.





Inventory:


Inventory
      is accounted for at lower of standard cost or market. The Company starts with
      standard cost approximating the weighted average cost basis with direct labor,
      direct materials and production overhead applied. Overhead applied is that
      of
      the production facility and does not include general and administrative costs
      of
      its administration office. There are no unusual or significant purchase
      commitments nor are there liens against and pledges of inventories. The Company
      does not hold an allowance for a decline in value to market value as the Company
      has never had to reduce its inventory value below its cost. There also has
      been
      no significant market declines subsequent to the date of these financial
      statements.





Long-lived
      Assets:


Long
      lived assets, including property and equipment and certain intangible assets
      to
      be held and used by the Company are reviewed for impairment whenever events
      or
      changes in circumstances indicate that the carrying value of the assets may
      not
      be recoverable. Impairment losses are recognized if expected future cash flows
      of the related assets are less than their carrying values. Measurement of an
      impairment loss is based on the fair value of the asset. Long-lived assets
      and
      certain identifiable intangibles to be disposed of are reported at the lower
      of
      carrying amount or fair value less cost to sell.





Property
      and Equipment are first recorded at cost. Depreciation is computed using the
      straight-line method over the estimated useful lives of the various classes
      of
      assets as follows:





Computer
                equipment
            3
                yearsVehicles
            5
                yearsFurniture
                and fixtures
            7
                yearsPlant
                and plant machinery
            15
                yearsOffice
                and industrial buildings
            25
                years





Maintenance
      and repairs, as incurred, are charged to expense. Betterments and renewals
      are
      capitalized in plant and equipment accounts. Cost and accumulated depreciation
      applicable to items replaced or retired are eliminated from the related
      accounts; gain or loss on the disposition thereof is included as
      income.





Income
      Taxes:


The
      Parent Company utilizes the asset and liability method to measure and record
      deferred income tax assets and liabilities. Deferred tax assets and liabilities
      reflect the future income tax effects of temporary differences between the
      financial statement carrying amounts of existing assets and liabilities and
      their respective tax bases and are measured using enacted tax rates that apply
      to taxable income in the years in which those temporary differences are expected
      to be recovered or settled.





F-7




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 NOTES
        TO
        THE FINANCIAL STATEMENTS





Deferred
      tax assets are reduced by a valuation allowance when, in the opinion of
      management, it is more likely than not that some portion or all of the deferred
      tax assets will not be realized. Currently, the Company has no U.S. tax
      responsibility to account for in the financial statements. To this date the
      Parent Company has had no operating activity and therefore has no tax
      liabilities or assets.





The
      Subsidiary Company records tax expense in accordance with the tax laws of the
      Democratic Republic of the Congo and has no other tax liabilities.





Fair
      Value of Financial Instruments:


The
      Company’s financial instruments include cash and cash equivalents, short-term
      investments, accounts receivable, accounts payable and other liabilities. The
      carrying amount of long-term debt, if used, to banks approximates fair value
      based on interest rates that are currently available to the Company for issuance
      of debt with similar terms and remaining maturities. The carrying amounts of
      other financial instruments approximate their fair value because of short-term
      maturities, currently, the Company has no long-term obligations.





Earning
      Per Share:


Basic
      earnings per share (EPS) is computed by dividing earnings available to common
      shareholders by the weighted-average number of common shares outstanding for
      the
      period as required by the Financial Accounting Standards Board (FASB) under
      Statement of Financial Accounting Standards (SFAS) n° 128, Earnings per Shares.
      Diluted EPS reflects the potential dilution of securities that could share
      in
      the earnings.





Concentrations
      of Risk:


Financial
      instruments, which potentially expose the Company to concentrations of credit
      risk, consist principally of operating demand deposit accounts. The Company’s
      policy is to place its operating demand deposit accounts with high credit
      quality financial institutions. These financial institutions are not insured
      by
      the FDIC.





Only
      one
      customer represents more than 10% of the Company’s total sales.





2. Accounts
      Receivable:





Accounts
      receivable historically have been immaterial for bad debts to be accounted
      for
      by the Company. The Company’s management has decided that an allowance is not
      necessary.





3. Inventories :





Major
      categories of inventories are as follows:





Year
            
            December
                2006
            
            December
                2005Raw
                materials
            
            $
            1,076,009
            
            $
            900,754Work
                in process
            
            
            153,335
            
            
            127,200Finished
                goods
            
            
            217,407
            
            
            190,800Total
            
            $
            1,446,751
            
            $
            1,218,754





4. Property,
      Plant and Equipment :





As
      of
      December 31, 2006, Property, plant and equipment are accounted for as
      follows:






F-8




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 NOTES
        TO
        THE FINANCIAL STATEMENTS








Cost
              
              Accumulated
                Depreciation
              
              Net
                  valueLand
              
              $
              8,467,920
              
              $
              0
              
              $
              8,467,920Industrial
                  buildings
              
              
              5,818,343
              
              
              1,994,921
              
              
              3,823,422Office
                  building
              
              
              719,712
              
              
              261,156
              
              
              458,556Residential
                  buildings
              
              
              5,171,160
              
              
              1,785,454
              
              
              3,385,706Vehicles
              
              
              339,740
              
              
              302,740
              
              
              0Plant
                  and machinery
              
              
              11,856,434
              
              
              6,175,540
              
              
              5,596,391Computer
                  and software
              
              
              57,595
              
              
              57,595
              
              
              0Office
                  furniture and fixtures
              
              
              34,272
              
              
              34,272
              
              
              0Residential
                  furniture & fixtures
              
              
              185,359
              
              
              185,359
              
              
              0Total
              
              $
              32,529,032
              
              $
              10,543,234
              
              $
              21,731,995




Included
      in cost of sales is depreciation expense of $880,002 and included in general
      and
      administrative expense is depreciation expense of $211,463.





As
      of
      December 31, 2005, Property, plant and equipment are accounted for as
      follows:


Cost
              
              Accumulated
                Depreciation
              
              Net
                  valueLand
              
              $
              8,467,920
              
              $
              0
              
              $
              8,467,920Industrial
                  buildings
              
              
              5,818,343
              
              
              1,811,290
              
              
              4,007,053Office
                  building
              
              
              719,712
              
              
              225,510
              
              
              494,202Residential
                  buildings
              
              
              5,171,160
              
              
              1,620,297
              
              
              3,550,863Vehicles
              
              
              302,740
              
              
              267,448
              
              
              35,292Plant
                  and machinery
              
              
              11,767,311
              
              
              5,941,138
              
              
              5,826,173Computer
                  and software
              
              
              57,595
              
              
              57,595
              
              
              0Office
                  furniture and fixtures
              
              
              34,272
              
              
              34,272
              
              
              0Residential
                  furniture & fixtures
              
              
              185,359
              
              
              185,359
              
              
              0Total
              
              $
              32,524,412
              
              $
              10,142,909
              
              $
              22,381,503





Included
      in cost of sales is depreciation expense of $864,119 and included in general
      and
      administrative expense is depreciation expense of $209,598.





5. Accounts
      Payable and Accrued Expenses:





Accounts
      payable and accrued expenses consist of trade payables, accrued payroll and
      payroll taxes created from normal operations of the business.





6. Long-term
      Debt:





Long-term
      debt is not used by the Company. The Company has no leases that would be
      accounted for as long-term leases or capital leases.





7. Stockholders’
      Equity:





The
      Company has authorised 25,000,000 common shares of stock with a par value of
      $.001. No preferred shares of stock have been authorised.






F-9




**AMERICAN
        BUSINESS HOLDING CORPORATION**
 **AND
        SUBSIDIARY**
 
 NOTES
        TO
        THE FINANCIAL STATEMENTS


During
      December of the year 2004 the Company issued 200,000 shares of common stock
      for
      $40,000, or $0.20 per share. The stock issuance was a private placement of
      shares of which the Company considers exempt from registration with the U.S.
      Securities and Exchange Commission.





During
      September of 2004 the Company commenced operations with the acquisition of
      Tissakin Ltd. (the Subsidiary) with the issuance of 8,000,000 shares of its
      common stock for all of the 216,000 outstanding shares of the Subsidiary. The
      transaction was accounted for as a reverse merger for consolidations as guided
      by Generally Accepted Accounting Principals. The transaction did not culminate
      with the recording of Goodwill.





The
      Subsidiary issues stock without legal or par value. There is no requirement
      for
      authorization of shares for the Subsidiary under the jurisdiction of
      incorporation. There are 216,000 shares issued and outstanding, held by the
      Company, that have all been accounted for as capital stock.





8. Employment
      Contract and Incentive Commitments:





The
      Company has no employment contracts and incentive commitments at this
      time.





9. Deferred
      Tax Assets and Liabilities:





The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards (SFAS) n° 109. As of September 30, 2006 and December 31,
      2005 the Company had no deferred tax asset or liabilities as the Company had
      no
      US activities to account for deferred tax assets and liabilities. The Subsidiary
      Company pays income tax in accordance with the laws of the Democratic Republic
      of the Congo whereby there are no deferred tax assets and liabilities to account
      for. If the parent company accounted for the subsidiary’s income tax liability
      under the U.S. tax code the Company would accrue a tax liability at an effective
      rate of 20% whereby the tax liability for December 31, 2006 and December 31,
      2005 would be $13,796 and $5,150, respectively. There would be no deferrals
      of
      tax assets or liabilities that would be derived from applying U.S. accounting
      standards.





10. Litigation,
      Claims and Assessments:





There
      is
      no litigation, claims and assessments asserted or known by the Company’s
      management.





11. Subsequent
      Events:





There
      are
      no material subsequent events known by the Company’s management.





F-10





**Item
      8.**   **Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure.**





None.




**Item
      8A.**  **Controls
      and Procedures.**





**Evaluation
      of Disclosure Controls and Procedures**





Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2006. Based
      on this evaluation, our principal executive officer and principal financial
      officer have concluded that our disclosure controls and procedures are effective
      to ensure that information required to be disclosed by us in the reports we
      file
      or submit under the Exchange Act is recorded, processed, summarized, and
      reported within the time periods specified in the Securities and Exchange
      Commission's rules and forms and that our disclosure and controls are designed
      to ensure that information required to be disclosed by us in the reports that
      we
      file or submit under the Exchange Act is accumulated and communicated to our
      management, including our principal executive officer and principal financial
      officer, or persons performing similar functions, as appropriate to allow timely
      decisions regarding required disclosure.





**Changes
      in Internal Controls**




There
        were no changes (including corrective actions with regard to significant
        deficiencies or material weaknesses) in our internal controls over financial
        reporting that occurred during the fourth quarter of fiscal 2006 that has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.




**Item
      8B.**  **Other
      Information.**




None.





**PART
      III**




**Item
      9.**   **Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a)
      of the Exchange Act.**





Our
      executive officers and directors and their respective ages as of March 28,
      2007
      are as follows:




**Name**
            **Age**
            **Position**Syed
                Irfan Husain
            42
            President,
              Chief
                Executive Officer,
              Chief
                Financial Officer, and
              Chairman
                of the Board of DirectorsSyed
                Idris Husain
            73
            Director




Set
      forth
      below is a brief description of the background and business experience of our
      executive officers and directors for the past five years.




**Syed
      Irfan Husain** serves
      as our President, Chief Executive Officer, Chief Financial Officer, and Chairman
      of the Board of Directors. Mr. Husain was educated in the US beginning in
      first grade. He holds a B.S. in Business Administration and MBA in International
      Business and Finance, both of which he earned at the University of Rhode Island.
      Mr. Husain is an American citizen. For the last five years he has worked as
      Managing Director of our wholly owned subsidiary, Tissakin, Ltd. At Tissakin,
      Ltd., he has doubled the capacity in both polypropylene bags as well as
      polyethylene shopping bags. In 2005, he added a fourth product line, namely
      blow
      molding. He has formed a key group of qualified staff in both the production
      side as well as the administration side. He has streamlined the operations
      by
      retiring redundant staff and workers and this move has served to reduce some
      fixed labor costs. One of his main job responsibilities is to interact closely
      with the clients and key government ministers such as finance, industry, and
      economy.







**Syed
      Idris Husain** serves
      on our Board of Directors. Mr. Husain was educated in India and after
      earning a Bachelor of Science degree, he migrated to East Pakistan (now
      Bangladesh). In 1957, he started work as an apprentice in a jute factory and
      worked his way up to general manager. After the India-Pakistan War of 1971,
      Mr. Husain was offered the job of general manager at our wholly owned
      subsidiary, Tissakin, Ltd.. In 1983, he became one of the shareholders in
      Tissakin, Ltd. and held the position of Managing Director until 2001. He
      currently serves as the President and Chief Executive Officer of Tissakin,
      Ltd.
      He is a permanent resident of the United States and a citizen of
      Belgium.




**Term
      of Office**




Our
      directors are appointed for a one-year term to hold office until the next annual
      general meeting of our shareholders or until removed from office in accordance
      with our bylaws. Our officers are appointed by our board of directors and hold
      office until removed by the board.




**Family
      Relationships**




Syed
      Irfan Husain, our President, Chief Executive Officer, Chief Financial Officer,
      and Chairman of the Board of Directors is the son of Syed Idris Husain, our
      Director and , Managing Director.




**Involvement
      in Certain Legal Proceedings**




To
      our
      knowledge, during the past five years, none of our directors, executive
      officers, promoters, control persons, or nominees has been:




•
            the
                subject of any bankruptcy petition filed by or against any business
                of
                which such person was a general partner or executive officer either
                at the
                time of the bankruptcy or within two years prior to that time;•
            convicted
                in a criminal proceeding or is subject to a pending criminal proceeding
                (excluding traffic violations and other minor offenses);•
            subject
                to any order, judgment, or decree, not subsequently reversed, suspended
                or
                vacated, of any court of competent jurisdiction, permanently or
                temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                or•
            found
                by a court of competent jurisdiction (in a civil action), the Commission
                or the Commodity Futures Trading Commission to have violated a federal
                or
                state securities or commodities law.





**Code
      of Ethics**





We
      have
      not yet adopted a Code of Ethics.





**Compliance
      with Section 16(a) of the Exchange Act**




Section
      16(a) of the Securities Exchange Act of 1934 requires the Company's officers
      and
      directors, and persons who own more than 10 percent of a registered class of
      the
      Company's equity securities, to file reports of ownership and changes in
      ownership with the Securities and Exchange Commission (SEC). Officers,
      directors, and greater than 10 percent stockholders are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms they
      file. To the Company's knowledge, based solely on a review of the copies of
      such
      reports furnished to the Company, all reports under Section 16(a) required
      to be
      filed by its officers and directors and greater than ten percent beneficial
      owners were timely filed as of the date of this filing.




**Item
      10.**   **Executive
      Compensation.**




**Compensation
      of Executive Officers**




**SUMMARY
      COMPENSATION TABLE**





The
      table
      below summarizes all compensation awarded to, earned by, or paid to our
      executive officers by any person for all services rendered in all capacities
      to
      us from the date of our inception until December 31, 2006.










**Name
                and Principal Position**
            
            
            **Year**
            
            
            **Salary**
              **($)**
            
            
            **Bonus**
              **($)**
            
            
            **Stock
                Awards**
              **($)**(5)
            
            
            **Option
                Awards**
              **($)**
            
            
            **Non-Equity
                Incentive Plan Compensation ($)**
            
            
            **Non-Qualified
                Deferred Compensation Earnings**
              **($)**
            
            
            **All
                Other Compensation**
              **($)**
            
            **Totals**
              **($)**Syed
                Irfan
              President,
                Chief Executive Officer, Chief Financial Officer
            
            
            2006
            
            $
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            02005
            
            $
            75,000
                (1)
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            02004
            
            $
            29,700
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            0




**Outstanding
      Equity Awards at Fiscal Year-End Table.** There
      were no individual grants of stock options to purchase our common stock made
      to
      the named executive officers named in the Summary Compensation Table during
      the
      fiscal year ended December 31, 2006, 2005 and 2004 and the subsequent period
      up
      to the date of the filing of this prospectus.




(1)
      Such
      compensation was paid directly by our subsidiary, Tissakin, Ltd.




None
      of
      our directors have received monetary compensation since our incorporation to
      the
      date of this registration statement. We currently do not pay any compensation
      to
      our sole director serving on our Board of Directors.




**Outstanding
      Equity Awards at Fiscal Year-End Table.** There
      were no individual grants of stock options to purchase our common stock made
      to
      the named executive officers named in the Summary Compensation Table during
      the
      fiscal year ended December 31, 2006, 2005 or 2004 and the subsequent period
      up
      to the date of the filing of this prospectus.




**Outstanding
      Equity Awards at Fiscal Year-End Table.** There
      were no individual grants of stock options to purchase our common stock made
      to
      the named executive officers in the Summary Compensation Table during the fiscal
      year ended December 31, 2006, and the subsequent period up to the date of the
      filing of this prospectus.




**Employment
      Agreements**




We
      do not
      have any employment agreements in place with our sole officer and
      director.




**Item
      11.**   **Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters.**





The
      following table provides the names and addresses of each person known to us
      to
      own more than 5% of our outstanding common stock as of March
      28, 2007 and by the officers and directors, individually and as a
      group. Except as otherwise indicated, all shares are owned
      directly.




**Title
                of Class**
            **Name
                and Address of Beneficial Owner (1)**
            **Amount
                and Nature of Beneficial Owner**
            **Percent
                of Class**Common
                Stock
            Syed
                Idris Husain
            64,480,000
            78.64%Common
                Stock
            Syed
                Imran Husain
            7,760,000
            9.46%Common
                Stock
            Syed
                Irfan Husain
            7,760,000
            9.46%Officers
                and Directors
              As
                a Group
            
            72,240,000
            88.10%




(1)
      The
      address for each of the beneficial owners listed in this table is 1223 Wilshire
      Boulevard, Suite 851, Santa Monica CA 90403











The
      percent of class is based on 820,000,000 shares of common stock issued and
      outstanding as of March 28, 2007.




**Item
      12.**   **Certain
      Relationships and Related Transactions.**





On
      September 12, 2004, we completed a Stock Purchase Agreement and Share Exchange
      in which we purchased all 216,000 outstanding membership shares in Tissakin
      Ltd., a Democratic Republic of Congo Corporation, so that Tissakin Ltd. became
      our wholly owned subsidiary. In exchange for the 216,000 shares, we issued
      a
      total of 8,000,000 shares to the Tissakin shareholders. Of this amount,
      6,448,000 shares were issued to Syed Idris Husain, 776,000 shares were issued
      to
      Syed Irfan Husain, and 776,000 shares were issued to Syed Imran Husain. Based
      on
      the foregoing, Syed Idris Husain, Syed Irfan Husain, and Syed Imran Husain
      are
      deemed to be our promoters.




The
      Company valued shares in the share exchange agreement based on the value of
      the
      subsidiary prior to a capital raise for the Company which was a book value
      of
      approximately $25,250,000. Both parties in the Share Exchange Agreement are
      the
      same shareholders and exchanged shares.




Syed
      Idris Husain is the father of Syed Irfan Husain and Syed Imran
      Husain.





**Item
      13.**   **Exhibits.**





**Exhibit No.**
            
            **Title
                of Document**
            
            **Location**3.1.1
            
            Certificate
                of Incorporation
            
            Incorporated
                by reference to Amendment No. 1 to Form SB-2 filed on March 15,
                20063.2
            
            Bylaws
            
            Incorporated
                by reference to Amendment No. 1 to Form SB-2 filed on March 15,
                200631.1
            
            Certification
                of Chief Executive Officer Pursuant to Rule 13a-14(a) of the
                Securities Exchange Act of 1934
            
            Filed
                herewith32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
            
            Filed
                herewith




**Item
      14.**   **Principal
      Accounting Fees and Services.**




**Audit
      Fees**




For
        our
        fiscal year ended December 31, 2006, we were billed approximately $5,000
        for
        professional services rendered for the audit and reviews of our financial
        statements. For our fiscal year ended December 31, 2005, we were billed
        approximately $5,000 for professional services rendered for the audit and
        reviews of our financial statements.




**Tax
      Fees**




For
      our
      fiscal years ended December 31, 2006 and 2005, we were not billed for
      professional services rendered for tax compliance, tax advice, and tax
      planning.




**All
      Other Fees**




The
      Company did not incur any other fees related to services rendered by our
      principal accountant for the fiscal years ended December 31, 2006 and
      2005.








**SIGNATURES**




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




**AMERICAN
                BUSINESS HOLDINGS, INC.**By:
            */**s/**Sayed
                Irfan Husain*Sayed
                Irfan HusainPresident,
                Chief Executive Officer,
              Chief
                Financial OfficerDate:
            March
                28, 2007





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





**Name**
            
            **Title**
            
            **Date***/**s/**Sayed
                Irfan Husain*
            
            President,
                Chief Executive Officer,
            
            March
                28, 2007Sayed
                Irfan Husain
            
            Chief
                Financial Officer