SMSA Humble Acquisition 10Q 2013 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark one)

x	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

		For the quarterly period ended September 30, 2013

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: 0-54095

SMSA Humble Acquisition Corp.

(Exact name of registrant as specified in its charter)

Nevada	27-2969191
(State of incorporation)	(IRS Employer ID Number)

1601 Elm Street, Suite 4600, Dallas, Texas 75201

(Address of principal executive offices)

(214) 954-4135

(Issuer's telephone number)

5521 Riviera Dr., Coral Gables, FL 33146

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer o	Accelerated filer o
	Non-accelerated filer o	Smaller reporting company x

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

YES x NO o

State the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: October 30, 2013: 10,030,612 shares of common stock, par value $0.001

SMSA Humble Acquisition Corp.

Form 10-Q for the Quarter ended September 30, 2013

Table of Contents

Page

Part I - Financial Information

Item 1 - Financial Statements	3

Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations	14

Item 3 - Quantitative and Qualitative Disclosures About Market Risk	16

Item 4 - Controls and Procedures	16

Part II - Other Information

Item 1 - Legal Proceedings	16

Item 1A- Risk Factors	16

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3 - Defaults Upon Senior Securities	16

Item 4 - Mine Safety Disclosures	16

Item 5 - Other Information	16

Item 6 - Exhibits	16

Signatures	17

Part I - Financial Information

Item 1 - Financial Statements

SMSA Humble Acquisition Corp.

(a development stage company)

Balance Sheets

September 30, 2013 and December 31, 2012

	(Unaudited)			(Audited)
	September 30,			December 31,
	2013			2012
ASSETS
Current Assets
Cash on hand and in bank	$	9,500		$	9,500

Total Assets	$	9,500		$	9,500



LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable - trade	$	-		$	-

Total Liabilities		-			-


Commitments and Contingencies


Stockholders' Equity (Deficit)
Preferred stock - $0.001 par value
10,000,000 shares authorized.
None issued and outstanding		-			-
Common stock - $0.001 par value.
100,000,000 shares authorized.
10,030,612 shares issued and outstanding, respectively		10,031			10,031
Additional paid-in capital		51,536			42,278
Deficit accumulated during the development stage		(52,067	)		(42,809	)

Total Stockholders' Equity (Deficit)		9,500			9,500

Total Liabilities and Stockholders’ Equity (Deficit)	$	9,500		$	9,500

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

SMSA Humble Acquisition Corp.

(a development stage company)

Statements of Operations and Comprehensive Loss

Nine and Three months ended September 30, 2013 and 2012 and

Period from August 1, 2007 (date of bankruptcy settlement) through September 30, 2013

(Unaudited)

													Period from
													August 1, 2007
													(date of bankruptcy
	Nine months			Nine months			Three months			Three months			settlement)
	ended			ended			ended			ended			through
	September 30,			September 30,			September 30,			September 30,			September 30,
	2013			2012			2013			2012			2013

Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses
Reorganization costs		-			-			-			-			2,874
Professional fees		7,305			5,911			2,875			2,026			33,152
Other general and
administrative expenses		1,953			6,176			270			4,680			16,041
Total operating expenses		9,258			12,087			3,145			6,706			39,918

Loss from operations		(9,258	)		(12,087	)		(3,145	)		(6,706	)		(52,067	)

Provision for income taxes		-			-			-			-			-

Net Loss		(9,258	)		(12,087	)		(3,145	)		(6,706	)		(52,067	)

Other
comprehensive income		-			-			-			-			-

Comprehensive Loss	$	(9,258	)	$	(12,087	)	$	(3,145	)	$	(6,706	)	$	(52,067	)

Loss per weighted-average
share of common stock
outstanding, computed
on net loss - basic and
fully diluted	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.00	)
Weighted-average number
of shares of common stock
outstanding - basic and
fully diluted		10,030,612			2,463,228			0,030,612			6,313,221

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

SMSA Humble Acquisition Corp.

(a development stage company)

Statements of Cash Flows

Nine months ended September 30, 2013 and 2012 and

Period from August 1, 2007 (date of bankruptcy settlement) through September 30, 2013

(Unaudited)

							Period from
							August 1, 2007
							(date of bankruptcy
	Nine months			Nine months			settlement)
	ended			ended			through
	September 30,			September 30,			September 30,
	2013			2012			2013
Cash Flows from Operating Activities
Net loss for the period	$	(9,258	)	$	(12,087	)	$	(52,067	)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Increase (Decrease) in
Accounts payable and accrued expenses		-			180			-

Net cash used in operating activities		(9,258	)		(11,907	)		(52,067	)


Cash Flows from Investing Activities		-			-			-


Cash Flows from Financing Activities
Cash funded by bankruptcy trust		-			-			1,000
Sale of common stock		-			9,500			9,500
Capital contributed to support operations		9,258			11,907			51,067

Net cash provided by financing activities		9,258			21,407			61,567

Increase (Decrease) in Cash		-			9,500			9,500

Cash at beginning of period		9,500			-			-

Cash at end of period	$	9,500		$	9,500		$	9,500

Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid during the period	$	-		$	-		$	-
Income taxes paid during the period	$	-		$	-		$	-

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

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note A - Background and Description of Business

SMSA Humble Acquisition Corp. (Company) was organized on May 3, 2010 as a Nevada corporation to effect the reincorporation of Senior Management Services of Humble, Inc. (Predecessor Company), a Texas corporation, mandated by the plan of reorganization discussed below.

The Company’s emergence from Chapter 11 of Title 11 of the United States Code on August 1, 2007 created the combination of a change in majority ownership and voting control - that is, loss of control by the then-existing stockholders, a court-approved reorganization, and a reliable measure of the entity’s fair value - resulting in a fresh start, creating, in substance, a new reporting entity. Accordingly, the Company, post bankruptcy, has no significant assets, liabilities or operating activities. Therefore, the Company, as a new reporting entity, qualifies as a “development stage enterprise” as defined in Development Stage Entities topic of the FASB Accounting Standards Codification and as a shell company as defined in Rule 405 under the Securities Act of 1933, (Securities Act), and Rule 12b-2 under the Securities Exchange Act of 1934, (Exchange Act).

On August 6, 2012, the Company entered into a Share Purchase Agreement (Share Purchase Agreement) with Pierre Galoppi (Galoppi), a resident of Coral Gables, Florida, pursuant to which he acquired 9,500,000 shares of our common stock for approximately $9,500 cash or $0.001 per share. As a result of this transaction, 10,030,612 shares of our common stock are currently issued and outstanding.

Our current business plan is to operate a cattle breeding enterprise located in the State of Texas.

Note B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code

On January 17, 2007, Senior Management Services of Humble, Inc. and its affiliated companies (SMS Companies or Debtors) filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code. During the three years prior to filing the reorganization petition, SMS Companies operated a chain of skilled nursing homes, located principally in Texas, which prior to the bankruptcy proceedings consisted of a total of 14 separate nursing facilities, ranging in size from approximately 114 beds to 325 beds. In the aggregate, SMS Companies provided care to approximately 1,600 resident patients and employed over 1,400 employees. A significant portion of the SMS Companies cash flow was provided by patients covered by Medicare and Medicaid. The SMS Companies facilities provided round-the-clock care for the health, well-being, safety and medical needs of its patients. The administrative and operational oversight of the nursing facilities was provided by an affiliated management company located in Arlington, Texas. In 2005, SMS Companies obtained a secured credit facility from a financial institution. The credit facility eventually was comprised of an $8.3 million term loan and a revolving loan of up to $15 million which was utilized for working capital and to finance the purchase of the real property on which 2 of its nursing care facilities operated. By late 2006, SMS Companies were in an "overadvance" position, whereby the amount of funds extended by the lender exceeded the amount of collateral eligible to be borrowed under the credit facility. Beginning in September 2006, SMS Companies entered into the first of a series of forbearance agreements whereby the lender agreed to forebear from declaring the financing in default provided SMS Companies obtained a commitment from a new lender to refinance and restructure the credit facility. SMS Companies were unsuccessful in obtaining a commitment from a new lender and, on January 5, 2007, the lender declared SMS Companies in default and commenced foreclosure and collection proceedings. On January 9, 2007, the lender agreed to provide an additional $1.7 million to fund payroll and permit a controlled transaction to bankruptcy. Subsequently, on January 17, 2007, the SMS Companies filed a petition for reorganization under Chapter 11 of the Bankruptcy Code.

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code – Continued

Under Chapter 11, certain claims against the Debtors in existence prior to the filing of the petitions for relief under Federal Bankruptcy Laws are stayed while the Debtors continue to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. These claims were reflected in the Predecessor Company’s balance sheets as “Liabilities Subject to Compromise” through the settlement date. Additional claims (liabilities subject to compromise) may arise subsequent to the petition date resulting from the rejection of executory contracts, including leases, and from the determination of the court (or agreed to by parties in interest) of allowed claims for contingencies and other disputed amounts.

The First Amended, Modified Chapter 11 Plan, (the Plan) as presented by SMS Companies and their creditors was approved by the United States Bankruptcy Court, Northern District of Texas - Dallas Division on August 1, 2007. The Plan, which contemplates the Company entering into a reverse merger transaction, provided that certain identified claimants as well as unsecured creditors, in accordance with the allocation provisions of the Plan of Reorganization, and the Company’s new controlling stockholder would receive “new” shares of the Company’s post-reorganization common stock, pursuant to Section 1145(a) of the Bankruptcy Code (Plan Shares). As a result of the Plan’s approval, all liens, security interests, encumbrances and other interests, as defined in the Plan of Reorganization, attach to the creditor’s trust. Specific injunctions prohibit any of these claims from being asserted against the Company prior to the contemplated reverse merger.

All assets, liabilities and other claims, including “Allowed Administrative Claims” which arise in the processing of the bankruptcy proceedings, against the Company and it’s affiliated entities were combined into a single creditor’s trust for the purpose of distribution of funds to creditors. Each of the individual SMS Companies entities otherwise remained separate corporate entities. From the commencement of the bankruptcy proceedings through August 1, 2007 (the confirmation date of the plan of reorganization), all secured claims and/or administrative claims during this period were satisfied through either direct payment or negotiation.

Pursuant to the Plan, the pre-confirmation unsecured creditors of Senior Management Services of Humble, Inc. (our predecessor company) agreed to accept Plan Shares in SMSA Humble Acquisition Corp., as reorganized, in lieu of asserting recovery of their claims against the Plan’s liquidating trust.

It was determined that SMSA Humble Acquisition Corp’s reorganization value computed immediately before the confirmation date of the Plan as approximately $1,000, which consisted of the following:

Current assets to be transferred to the post-confirmation entity	$	1,000
Fair market value of property and equipment		-
Deposits with vendors and other assets transferred
to the post-confirmation entity		-

Reorganization value	$	1,000

Pursuant to the Plan, all of the operations of the Company were transferred to a combined creditor’s trust and, as approved by the Bankruptcy Court, a completely new entity was formed for purposes of completing the aforementioned reverse merger transaction. The Company adopted fresh-start reporting because the holders of existing voting shares immediately before filing and confirmation of the Plan received less than 50.0% of the voting shares of the emerging entity and its reorganization value was not greater than its postpetition liabilities and allowed claims, as shown below:

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code – Continued

Postpetition current liabilities	$	-
Liabilities deferred pursuant to Chapter 11 proceeding		-
“New” common stock issued upon reorganization		1,000

Total postpetition liabilities and allowed claims		1,000
Reorganization value		(1,000	)

Excess of liabilities over reorganization value	$	-

The reorganization value of SMSA Humble Acquisition Corp. was determined in consideration of several factors and by reliance on various valuation methods, including discounting cash flow and price/earnings and other applicable ratios. The factors considered by SMSA Humble Acquisition Corp. included the following:

•

Forecasted operating and cash flows results which gave effect to the estimated impact of

-Corporate restructuring and other operating program changes

-Limitations on the use of available net operating loss carryforwards and other tax attributes resulting from the Plan of Reorganization and other events

•

The discounted residual value at the end of the forecast period based on capitalized cash flows for the last year of that period.

•

Market share and position

•

Competition and general economic conditions

•

Projected sales growth

•

Potential profitability

•

Seasonality and working capital requirements

After consideration of SMSA Humble Acquisition Corp.’s debt capacity and other capital structure considerations, such as industry norms, projected earnings to fixed charges, projected earnings before interest and projected free cash flow to debt service and other applicable ratios, management determined that SMSA Humble Acquisition Corp.’s reorganization capital structure should be as follows:

Common Stock (500,005 “new” shares to be issued at $0.001 par value)	$	500
Additional paid-in capital		500

Total reorganized capital structure	$	1,000

As previously described, the cancellation of all existing shares outstanding at the date of the bankruptcy filing and the issuance of all “new” shares of the reorganized entity caused an issuance of shares of common stock and a related change of control of the Company with more than 50.0% of the “new” shares being held by persons and/or entities which were not pre-bankruptcy stockholders. Accordingly, per the Reorganization topic of the FASB Accounting Standards Codification (Reorganization topic), the Company adopted fresh-start accounting as of the bankruptcy discharge date whereby all continuing assets and liabilities of the Company were restated to the fair market value. The Reorganization topic further states that fresh start financial statements prepared by entities emerging from bankruptcy will not be comparable with those prepared before their plans were confirmed because they are, in fact, those of a new entity. For accounting purposes, the Company adopted fresh start accounting in accordance with the Reorganization topic as of August 1, 2007, the confirmation date of the Plan.

As of August 1, 2007, in accordance with the Plan of Reorganization, the only asset of the Company was approximately $1,000 in cash transferred from the bankruptcy creditor’s trust.

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note C - Basis of Presentation

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles and has established a year-end for accounting purposes of December 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported 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.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K containing the Company’s financial statements for the year ended December 31, 2012. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2013.

Note D - Going Concern Uncertainty

The Company has no post-bankruptcy operating history, limited cash on hand, no operating assets and has a business plan with inherent risk. Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s annual financial statements which includes a statement describing our going concern status. This means, in our auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

Our current business plan is to operate a cattle breeding enterprise located in the State of Texas. However, there is no assurance that the Company will be able to successfully implement its business plan, which may include a future acquisition or merger with a private operating company. There is no assurance that the implementation of our business plan or any future business combination transaction will result in the appreciation of our stockholders’ investment in the then outstanding common stock.

The Company's ultimate continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. The Company faces considerable risk in it’s business plan and a potential shortfall of funding due the potential inability to raise capital in the equity securities market. If adequate operating capital and/or cash flows are not received during the next twelve months, the Company could become dormant until such time as necessary funds could be raised.

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note D – Going Concern Uncertainty – Continued

The Company anticipates future sales or issuances of equity securities to fulfill its business plan. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

The Company’s Articles of Incorporation authorize the issuance of up to 10,000,000 shares of preferred stock and 100,000,000 shares of common stock. The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede potential takeover of the Company, which may be in the best interest of stockholders. The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

Note E - Summary of Significant Accounting Policies

1.	Cash and cash equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2.	Reorganization costs

The Company has adopted the provisions required by the Start-Up Activities topic of the FASB Accounting Standards Codification whereby all costs incurred with the incorporation and reorganization of the Company were charged to operations as incurred.

3.	Income taxes

The Company files income tax returns in the United States of America and various states, as appropriate and applicable. As a result of the Company’s bankruptcy action, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to January 1, 2010. The Company does not anticipate any examinations of returns filed for periods ending on or after December 31, 2009.

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2013 and December 31, 2012, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals, as well as the potential impact of any net operating loss carryforwards (s) and their potential utilization.

The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification. The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority. As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.

4.	Income (Loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note E - Summary of Significant Accounting Policies – Continued

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

As of September 30, 2013 and 2012, respectively, the Company had no outstanding stock warrants, options or convertible securities which could be considered as dilutive for purposes of the loss per share calculation.

5.	Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

Note F - Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to financial risk, if any.

Note G - Related Party Transactions

Halter Financial Group, Inc. (HFG), the previous majority shareholder, pursuant to the Plan, managed the $1,000 in cash transferred from the bankruptcy creditor’s trust on our behalf until exhausted and has contributed approximately $9,258 and $14,978 during the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively, to support our operations. The contributed capital has been reflected as a component of additional paid-in capital in the accompanying balance sheet.

Note H - Income Taxes

The components of income tax (benefit) expense for each of the nine month periods ended September 30, 2013 and 2012 and for the period from August 1, 2007 (date of bankruptcy settlement) through September 30, 2013 are as follows:

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note H - Income Taxes – Continued

					Period from
					August 1, 2007
					(date of
					bankruptcy
	Nine months		Nine months		settlement)
	ended		ended		through
	September 30,		September 30,		September 30,
	2013		2012		2013

Federal:
Current	$	-	$	-	$	-
Deferred		-		-		-
		-		-		-
State:
Current		-		-		-
Deferred		-		-		-
		-		-		-

Total	$	-	$	-	$	-

As of September 30, 2013, the Company has a net operating loss carryforward of approximately $52,000 to offset future taxable income. The amount and availability of any net operating loss carryforwards will be subject to the limitations set forth in the Internal Revenue Code. Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).

The Company's income tax expense (benefit) for each of the nine month periods ended September 30, 2013 and 2012 and for the period from August 1, 2007 (date of bankruptcy settlement) through September 30, 2013 varied from the statutory rate of 34% as follows:

							Period from
							August 1, 2007
							(date of
							bankruptcy
	Nine months			Nine months			settlement)
	ended			ended			through
	September 30,			September 30,			September 30,
	2013			2012			2013

Statutory rate applied to
income before income taxes	$	(3,100	)	$	(4,100	)	$	(17,700	)
Increase (decrease) in income
taxes resulting from:
State income taxes		-			-			-
Other, including reserve for
deferred tax asset and application
of net operating loss carryforward		3,100			4,100			17,700

Income tax expense	$	-		$	-		$	-

The Company’s only temporary difference as of September 30, 2013 and 2012, respectively, relates to the Company’s net operating loss pursuant to the applicable Federal Tax Law. As of September 30, 2013 and December 31, 2012, respectively, the deferred tax asset is as follows:

SMSA Humble Acquisition Corp.

(a development stage company)

Notes to Financial Statements

September 30, 2013 and December 31, 2012

Note H - Income Taxes – Continued

	September 30,			December 31,
	2013			2012
Deferred tax assets
Net operating loss carryforwards	$	17,700		$	14,600
Less valuation allowance		(17,700	)		(14,600	)

Net Deferred Tax Asset	$	-		$	-

During the nine month period ended September 30, 2013 and the year ended December 31, 2012, respectively, the valuation allowance against the deferred tax asset increased by approximately $3,100 and $5,100.

Note I - Capital Stock Transactions

Pursuant to the Plan affirmed by the U. S. Bankruptcy Court - Northern District of Texas - Dallas Division, the Company issued 530,612 plan shares to meet the requirements of the Plan. The 530,612 shares of the Company’s “new” common stock were issued to holders of various claims, as defined in the Plan, in settlement of all unpaid pre-confirmation obligations of the Company and/or the bankruptcy trust.

On August 6, 2012, the Company entered into the Share Purchase Agreement with Galoppi pursuant to which he acquired 9,500,000 shares of our common stock for approximately $9,500 cash or $0.001 per share. As a result of this transaction, 10,030,612 shares of our common stock are currently issued and outstanding. The Company relied upon Section 4(2) of the Securities Act of 1933, as amended, for an exemption from registration on these shares and no underwriter was used in this transaction.

On December 10, 2012, Galoppi sold 9,490,000 of the aforementioned shares to Patrick D. Souter (Souter) for approximately $9,490.00 or $0.001 per share. There was no change in our total issued and outstanding shares as a result of this transaction. The sellers and the Company relied upon Section 4(2) of the Securities Act of 1933, as amended, for an exemption from registration on these shares and no underwriter was used in this transaction.

Note J - Subsequent Events

Management has evaluated all activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to financial statements.

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

(1)	Caution Regarding Forward-Looking Information

Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

(2)

General

The Company was organized on May 3, 2010 as a Nevada corporation to effect the reincorporation of Senior Management Services of Humble, Inc. (Predecessor Company), a Texas corporation, mandated by the plan of reorganization under Chapter 11 of the U. S. Bankruptcy Code. On August 6, 2012, the Company entered into the Share Purchase Agreement with Galoppi pursuant to which he acquired 9,500,000 shares of our common stock for approximately $9,500 cash or $0.001 per share. On December 10, 2012, Galoppi sold 9,490,000 of the aforementioned shares to Souter for approximately $9,490.00 or $0.001 per share.

There is no assurance that the implementation of our business plan or any future business combination transaction will result in the appreciation of our stockholders’ investment in the then outstanding common stock.

(3)	Results of Operations

The Company had no revenue for either of the nine or three month periods ended September 30, 2013 or 2012 or for the period from August 1, 2007 (date of bankruptcy settlement) through September 30, 2013.

General and administrative expenses for the respective nine month periods ended September 30, 2013 and 2012 were approximately $9,300 and $12,100. These expenses were directly related to the maintenance of the corporate entity and the preparation and filing of periodic reports pursuant to the Exchange Act.

It is anticipated that future expenditure levels will remain constant or increase as the Company complies with its periodic reporting requirements and implements its business plan.

Earnings per share for each of the nine month periods ended September 30, 2013 and 2012, were approximately $(0.00), based on the weighted-average shares issued and outstanding.

The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Exchange Act unless and until such time that the Company executes upon its current business plan.

(4)	Liquidity and Capital Resources

At September 30, 2013 and December 31, 2012, the Company had working capital of approximately $9,500 and $9,500, respectively.

The Company currently has limited cash on hand, no operating assets and a business plan with inherent risk. Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s annual financial statements which includes a statement describing our going concern status. This means, in the auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

Our current business plan is to operate a cattle breeding enterprise located in the State of Texas.

It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern.

Regardless of whether the Company’s cash assets prove to be inadequate to meet the Company’s operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.

(5)	Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note E of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

(6)	Effect of Climate Change Legislation

The Company currently has no known or identified exposure to any current or proposed climate change legislation which could negatively impact the Company’s operations or require capital expenditures to become compliant. Additionally, any currently proposed or to-be-proposed-in-the-future legislation concerning climate change activities, business operations related thereto or a publicly perceived risk associated with climate change could, potentially, negatively impact the Company’s efforts to implement the Company’s business plan.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

In future periods, the Company may become subject to certain market risks, including changes in interest rates and currency exchange rates. At the present time, the Company has no identified exposure and does not undertake any specific actions to limit exposures, if any.

Item 4 - Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive and Financial Officer (Certifying Officer), has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Exchange Act as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Certifying Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our Certifying Officer concluded that as of such date, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the time periods specified by the SEC due to a inherent weakness in our internal controls over financial reporting due to our status as a shell corporation and having a sole officer and director. However, our Certifying Officer believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the respective periods presented.

(b)	Changes in Internal Controls

There were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1 - Legal Proceedings

None

Item 1A – Risk Factors

We are a smaller reporting company as defined by Reg. 240.12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3 - Defaults Upon Senior Securities

None

Item 4 - Mine Safety Disclosures

N/A

Item 5 - Other Information

None

Item 6 - Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101 Interactive data files pursuant to Rule 405 of Regulation S-T.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SMSA Humble Acquisition Corp.

Dated: November 1, 2013	/s/ Patrick D. Souter
	Patrick D. Souter
	President, Chief Executive Officer,
	Chief Financial Officer and Sole Director

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SMSA Humble Acquisition (SMHQ) Inactive 10-Q2013 Q3 Quarterly report

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