To Move a File System Activity to a ALM Activity you will have to manually move the FSA to a Local Activity and then move it to ALM Activity. Below is how I did the move.

1. Open UFT
2. Open the UFT API Test that has the Activity you want to move.
3. Go to Tool > Options > API Testing (Top Tab) > General (Left tab).
4. Scroll down the window on the right to Activity repositories
5. Open Windows Explorer
6. Copy the File System Path into a Window Explorer address bar
7. Find the directory with the service that you want to cut it.
8. Go to the directory where the UFT API test you are using to move the activity too.
9. Find the directory EmbeddedResources inside the UFT API test directory.
> NOTE: if the directory does not exist create one.
10. Paste the activity directory from above in the EmbeddedResources directory.
11. Restart UFT.
12. Reopen UFT API Test.
13. The activity will be in the Local Activities area.
14. Right click on the moved activity to move it to the ALM Activity