Attached files
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31,
2016 or
☐ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ____________________to
____________________
333-209836
Commission file number
Results-Based Outsourcing Inc.
(Exact name of registrant as specified in its charter)
Delaware
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32-0416399
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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2490 Blackrock Turnpike #344, Fairfield CT
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06825
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(Address
of principal executive offices)
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(Zip
Code)
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203.456.8088
Registrant’s telephone number, including area
code
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange
Act:
Common Stock, par value $0.0001
Indicate by check mark whether the registrant (1) has filed all
reports required by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
day. [X] Yes
[ ] No
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 [ ] No [
]
(Does not currently apply to the Registrant)
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 if the Exchange
Act.
Large accelerated
filter ☐
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Accelerated
filter
☐
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Non-accelerated
filter ☐
(Do not check if a
smaller reporting company)
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Smaller reporting
company ☒
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Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes __ No X
State the number of shares outstanding of each of the
issuer’s classes of common equity, as of the latest
practicable date.
Class
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Outstanding April 13, 2017
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Common Stock, $0.0001 par value per share
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4,107,000
shares
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve a
number of risks and uncertainties. Although our forward-looking
statements reflect the good faith judgment of our management, these
statements can be based only on facts and factors of which we are
currently aware. Consequently, forward-looking statements are
inherently subject to risks and uncertainties. Actual results and
outcomes may differ materially from results and outcomes discussed
in the forward-looking statements.
Forward-looking statements can be identified by the use of
forward-looking words such as “may,”
“will,” “should,” “anticipate,”
“believe,” “expect,” “plan,”
“future,” “intend,” “could,”
“estimate,” “predict,” “hope,”
“potential,” “continue,” or the negative of
these terms or other similar expressions. These statements include,
but are not limited to, statements under the captions “Risk
Factors,” “Management’s Discussion and Analysis
or Plan of Operation” and “Description of
Business,” as well as other sections in this report. Such
forward-looking statements are based on our management’s
current plans and expectations and are subject to risks,
uncertainties and changes in plans that may cause actual results to
differ materially from those anticipated in the forward-looking
statements. You should be aware that, as a result of any of these
factors materializing, the trading price of our common stock may
decline. These factors include, but are not limited to, the
following:
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the availability and adequacy of capital to support and grow our
business;
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economic, competitive, business and other conditions in our local
and regional markets;
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actions taken or not taken by others, including competitors, as
well as legislative, regulatory,
judicial and other governmental authorities;
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competition in our industry;
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Changes in our business and growth strategy, capital improvements
or development plans;
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the availability of additional capital to support development;
and
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other factors discussed elsewhere in this annual
report.
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The cautionary statements made in this annual report are intended
to be applicable to all related forward-looking statements wherever
they may appear in this report.
We urge you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this report. We
undertake no obligation to publicly update any forward
looking-statements, whether as a result of new information, future
events or otherwise.
2
TABLE OF CONTENTS
Item
1.
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Business.
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4
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Item
1A.
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Risk
Factors
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4
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Item
1B.
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Unresolved
Staff Comments.
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4
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Item
2.
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Properties.
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4
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Item
3.
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Legal
Proceedings.
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4
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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4
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Item
5.
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Market
for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
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4
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Item
7.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
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5
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Item
7A.
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Quantitative
and Qualitative Disclosures About Market Risk.
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10
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Item
8.
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Financial
Statements and Supplementary Data.
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10
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Item
9.
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Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure.
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Item
9A.
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Controls
and Procedures.
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Item
9B.
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Other
Information.
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Item
10.
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Directors,
Executive Officers and Corporate Governance.
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Item
11.
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Executive
Compensation.
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14
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Item
12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
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15
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Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence.
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15
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Item
14.
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Principal
Accounting Fees and Services.
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16
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Item
15.
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Exhibits,
Financial Statement Schedules.
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SIGNATURES
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3
PART I
Item 1. Business.
Results-Based
Outsourcing Inc. (formerly Digital Commerce Solutions Inc.) (the
“Company”), formed on July 22,
2013. The Company is a consulting company for the
small business enterprise market (here-in-under, referred to as the
“SME Market”). In general, SME Market
companies range from sole proprietors – the one-person band
running his or her business with no employees – through to
those that have up to 50 employees. The
Company targets those SME companies with limited resources and/or
infrastructure looking to outsource their operations and/or
corporate-level functions (“Business
Services”). Such Business Services might include,
financial reporting, accounting, sales and marketing, compliance,
legal, human resource management or investor
relations.
The
Company also looks to help clients identify, implement and maintain
third-party Software-as-a-Service (“SAAS”) products
that help streamline business operations through
automation.
Item 1A. Risk Factors.
We are a smaller reporting company as defined in Rule 12b-2 of the
Exchange Act and are not required to provide the information
required under this item.
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
We do not own any real estate or other properties.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
No director, officer, or affiliate of the issuer and no owner of
record or beneficiary of more than 5% of the securities of the
issuer, or any security holder is a party adverse to the small
business issuer or has a material interest adverse to the small
business issuer.
Item 4. Submission of Matters to a Vote of Security
Holders
None
PART II
Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
There is presently no established public trading market for our
shares of common stock.
Holders of Our Common Stock
As of the date of filing we had 40 shareholders of our common
stock.
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Stock Option Grants
To date, we have not granted any stock options.
Transfer Agent and Registrar
The Company’s transfer agency is Island Stock Transfer
located at 15500 Roosevelt Blvd. Suite 301, Clearwater, FL 33760.
Phone 727.289.0010.
Dividends
Since inception we have not paid any dividends on our common stock.
We currently do not anticipate paying any cash dividends in the
foreseeable future on our common stock. Although we intend to
retain our earnings, if any, to finance the exploration and growth
of our business, our Board of Directors will have the discretion to
declare and pay dividends in the future. Payment of dividends in
the future will depend upon our earnings, capital requirements, and
other factors, which our Board of Directors may deem
relevant.
Recent Sales of Unregistered Securities
None
Stock-Based Compensation
On
February 16, 2016, the Board of Directors approved an agreement
with legal counsel for the Company which included; the issuance of
82,000 shares of common stock and the total payment of $15,000 to
counsel for services rendered through the date the Company’s
S-1 filing is declared effective. The $15,000 will be paid the
sooner of any combination of; (i) the sum of $500 per month
commencing on November 1, 2015, (ii) the first use of proceeds from
the S-1 offering, or (iii) the change of control of the
Company.
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
We are an emerging growth company as defined in Section 2(a)(19) of
the Securities Act. We will continue to be an emerging growth
company until: (i) the last day of our fiscal year during which we
had total annual gross revenues of $1,000,000,000 or more; (ii) the
last day of our fiscal year following the fifth anniversary of the
date of the first sale of our common stock pursuant to an effective
registration statement under the Securities Act; (iii) the date on
which we have, during the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or (iv) the date on which
we are deemed to be a large accelerated filer, as defined in
Section 12b-2 of the Exchange Act.
As an emerging growth company, we are exempt from:
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Sections 14A(a) and (b) of the
Exchange Act, which require companies to hold stockholder advisory
votes on executive compensation and golden parachute
compensation;
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The requirement to provide, in
any registration statement, periodic report or other report to be
filed with the Securities and Exchange Commission (the
“Commission” or “SEC”), certain modified
executive compensation disclosure under Item 402 of Regulation S-K
or selected financial data under Item 301 of Regulation S-K for any
period before the earliest audited period presented in our initial
registration statement;
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Compliance with new or revised
accounting standards until those standards are applicable to
private companies;
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The requirement under Section
404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor
attestation of our internal controls and procedures;
and
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Any Public Company Accounting
Oversight Board (“PCAOB”) rules regarding mandatory
audit firm rotation or an expanded auditor report, and any other
PCAOB rules subsequently adopted unless the Commission determines
the new rules are necessary for protecting the
public.
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We have elected to use the extended transition period for complying
with new or revised accounting standards under Section 102(b)(1) of
the Jumpstart Our Business Startups Act.
We are also a smaller reporting company as defined in Rule 12b-2 of
the Exchange Act. As a smaller reporting company, we are not
required to provide selected financial data pursuant to Item 301 of
Regulation S-K, nor are we required to comply with the auditor
attestation requirements of Section 404(b) of the Sarbanes-Oxley
Act of 2002. We are also permitted to provide certain modified
executive compensation disclosure under Item 402 of Regulation
S-K.
This form 10-K contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. For this purpose any statements contained in this
Form 10-K that are not statements of historical fact may be deemed
to be forward-looking statements. Without limiting the
foregoing, words such as “may”, “will”,
“expect”, “believe”,
“anticipate”, “estimate” or
“continue” or comparable terminology are intended to
identify forward-looking statements. These statements by
their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of
factors, many of which are not within our control. These
factors include by are not limited to economic conditions generally
and in the industries in which we may participate; competition
within our chosen industry, including competition from much larger
competitors; technological advances and failure to successfully
develop business relationships.
This discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results may differ
materially from those anticipated in these forward-looking
statements.
Summary of
Business
We are
a consulting company for the small business enterprise market
(hereinafter referred to as the “SME
Market”). In general, SME Market companies
range from sole proprietors – the one-person operation with
no employees to those companies that have up to 50
employees. We target those SME companies with
limited resources and/or infrastructure looking to outsource all or
part of their operations and/or corporate level
functions. To get started, we recommend clients start
with outsourcing one or more of these areas; financial and
management reporting, accounting, tax reporting, legal and
compliance, human resource management or sales and marketing
(collectively our “Business Services”). We also
look to help clients identify, implement and maintain business
software products that are currently available in the marketplace
that help streamline business operations through automation (our
“Managed Software
Services”). Our Business Services and
Managed Software Services are collectively referred to as our
Services.
Outsourcing
has clearly becoming an integral part of a business strategy to
achieve unparalleled performance. Packaged outsourcing takes
it to the next level. Savvy business owners intent on guiding their
companies toward optimized performance began by outsourcing a
single process. That is the first step. Now, leading
organizations are seeing the benefits from combining - or packaging
- a comprehensive set of end-to-end processes across core functions
into a single, outsourcing arrangement - for example, accounting,
tax and risk management.
Bundled
outsourcing also addresses the challenge of managing multiple
providers and contacts. It is easier to manage and measure
because it creates standardized, repeatable processes under one
integrated governance structure that ensures maximum performance at
lower sustained costs.
Our Market
Within
the SME Market classification there are considerable company
variation. There are hundreds if not thousands of types of
small businesses. Just taking the NAICS (the North American
Industry Classification System) or the SIC codes (the UK Standard
Industrial Classification), there are over 1,000 classifications of
business types from suppliers of asbestos products to X-ray
apparatus. However, we try to collapse these many
categories into three broad groups:
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Companies
that produce, manufacture or process things;
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Companies
that retail, distribute or merchant things; or
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Companies
that offer professional advice or knowledge-based
services.
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Within
SME Market, we understand that the sole proprietor is very
different to the company that employs 50 people. We believe
enterprises experience a change of focus once they employ just a
few people. Once an enterprise employs additional staff, we believe
management begins to place more emphasis on the subject of revenue
growth and expense management. At that point its critical that they
have in place a solid foundation for supporting back-office and
operating tasks, initially established through outsourcing such
activities.
Our Opportunity
SME
company owners and managers often are tasked with functioning in a
number of capacities in order to grow their business. However, at
some point in time in the growth curve (Figure 1), a business owner
or manager is faced with the decision of continuing to function in
a number of capacities or to seek outside assistance. To help with
this decision, we bring outsourced people, business processes and
software tools to businesses to reduce costs and to run more
efficiently and effectively. We believe that if a small business
doesn’t embrace and leverage the power of outsourcing and
automation, it significantly limits the company’s ability to
keep pace with business growth goals and objectives. As such, we
believe that our Services met a large un-met need for SME
companies.
The SME
Market is particularly attractive because:
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it is
large, continues to grow and remains underserved by professional
services companies; and
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it
typically has fewer in-house resources than larger businesses and,
as a result, is generally more dependent on external
resources;
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Our
Strategy
Our
strategy for growing our operations includes:
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Rolling
out various outbound sales and marketing campaigns to grow our
client base;
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Expanding
our outsourced third party provider base to assist in cost
efficiently delivering our services; and
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Growth
through acquisition with complementary service providers and
software product companies.
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Plan of Operations
We plan
to establish a broad customer base by various traditional and
internet marketing campaigns.
7
Over
the next twelve months we plan to;
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continue to
standardize the processes of how our consulting services are
provided. In January 2017 we introduced our new 4-Part Total
Business Management Approach. The approach breaks down
client’s businesses into 4 separate planning
exercises;
1. Business innovation
and growth plan
2. Risk management
plan
3. Capital funding
plan
4. Owner and employee
wellness plan.
To
support the delivery and manage the results of this approach we
have developed a tool we refer to as our Business Innovation and
Growth (BIG) Check-Up.
●
increase efforts to
acquire new clients. We plan to do internet marketing that might
include, search engine marketing, blogging, social media,
affiliated marketing, organic and paid for search engine
optimization. We may also employ certain traditional marketing
tactics, including, mail, phone calls, content development,
industry networking and direct selling. In February 2017, along
with the launch of our new website we commenced our 1st major social media
and internet marketing campaign.
●
Expand our custom
“program offerings”. Along with the launch of our new
website, we introduced some of the programs. That included,
Healthcare Cost Containment, Cause-Related Marketing, Business
Innovation & Growth (BIG) “Boot
Camps.”
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Refine through
independent research and feed-back from clients, our database of
what we consider best-in-class business software-as-a-service
tools. We currently have database of
approximately 100 such products.
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Further explore the
use of “For-Cause Alliance Partnerships” whereby we
partner up with non-profit educational-like mission based
organizations to further both business plans and reputation with
the local community
Results of Operations
Summary of Key Results
For the years ended December 31, 2016 and 2015
Revenue
and Cost of Revenues
Total
revenue for the years ended December 31, 2016, and 2015 was
$167,669, and $170,697, respectively.
Cost of
revenues for the years ended December 31, 2016 and 2015 were
$75,110 and $62,223, respectively. Such amounts included $43,650
and $37,000 paid to a related party, respectively.
Operating Expenses
Total
operating and administrative expenses for the year ended December
31, 2016 and 2015 were $127,558 and $99,462, respectively. That
amount included depreciation of $1,300 and $650, respectively and
sales and marketing expenses of $11,259 and $3,296, respectively.
The remaining amount primarily consists of professional services
and reporting expenses. The Company recorded general and
administrative costs of related party of $31,200 and $27,500, for
the years ended December 31, 2016 and 2015, respectively. The
Company recorded $1,640 in stock based compensation for the year
ended December 31, 2016.
8
Liquidity and Capital Resources
At
December 31, 2016, we had cash of $11,354 and a working capital
deficit of $21,047. Since inception, we have
raised $35,098 in equity capital. We had a total
stockholders’ deficit of $19,097 and an accumulated deficit
of $56,238 as of December 31, 2016.
We had
$6,401 of cash provided by and $4,519 of cash used in cash
operating activities for the years ended December 31, 2016 and
2015, respectively. These include a net loss of $34,999 and net
income of $9,012, respectively. Cash flows provided by (used in)
operating activities included changes in operating assets and
liabilities totaling $38,460 and ($14,181) for the years ended
December 31, 2016 and 2015, respectively.
Our
future growth in dependent upon achieving sales growth, management
of operating expenses and ability of the Company to obtain the
necessary financing to fund future obligations, and upon profitable
operations.
As of
December 31, 2016, our cash balance was $11,354. We believe we will
require a minimum of $50,000 in additional cash over the next 12
months to maintain our regulatory reporting and filings and cover
our operations costs. Should our revenues not increase as expected
and if our costs and expenses prove to be greater than we currently
anticipate, or should we change our current business plan in a
manner that will increase or accelerate our anticipated costs and
expenses, the depletion of our working capital would be
accelerated. In the event that our revenues from operations are
insufficient to meet our working capital needs, our major
shareholder, Mountain Laurel Holdings Inc. has indicated that they
may be willing to provide funds required to maintain the reporting
status in the form of a non-secured loan for the next twelve months
as the expenses are incurred if no other proceeds are obtained by
the Company. However, there is no contract in place or written
agreement securing this agreement. Management believes if the
Company cannot maintain its reporting status with the SEC it will
have to cease all efforts directed towards the Company. As such,
any investment previously made would be lost in its
entirety.
Consistent
with Section 144 of the Delaware General Corporation Law, it is our
current policy that all transactions between us and our officers,
directors and their affiliates will be entered into only if such
transactions are approved by a majority of the disinterested
directors, are approved by vote of the stockholders, or are fair to
us as a corporation as of the time it is authorized, approved or
ratified by the board. We will conduct an appropriate review of all
related party transactions on an ongoing basis.
With
respect to shares issued for services, our board of directors
determines the value of the services provided and authorizes the
issuance of shares based upon the fair market value of our
shares.
Off-Balance Sheet Arrangements
We had
no outstanding derivative financial instruments, off-balance sheet
guarantees, interest rate swap transactions or foreign currency
contracts. We do not engage in trading activities involving
non-exchange traded contracts.
Critical Accounting Policies
Our
discussion and analysis of the financial condition and results of
operations are based upon the Company’s financial statements,
which have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”).
The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We believe that the estimates,
assumptions and judgments involved in the accounting policies
described below have the greatest potential impact on our financial
statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters,
actual results could differ from the estimates we use in applying
the critical accounting policies. Certain of these critical
accounting policies affect working capital account balances,
including the policies for revenue recognition, allowance for
doubtful accounts, inventory reserves and income taxes. These
policies require that we make estimates in the preparation of our
financial statements as of a given date.
9
Within
the context of these critical accounting policies, we are not
currently aware of any reasonably likely events or circumstances
that would result in materially different amounts being
reported.
Revenue Recognition
The
Company derives its revenue from the sale of compliance, legal,
risk management and management and public reporting consulting
services. The Company utilizes written contracts as the means to
establish the terms and condition services are sold to
customers.
Consulting Services
Because
the Company provides its applications as services, it follows the
provisions of Securities and Exchange Commission Staff Accounting
Bulletin (“SAB”) No. 104, Revenue Recognition. The Company
recognizes revenue when all of the following conditions are
met:
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there
is persuasive evidence of an arrangement;
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the
service has been provided to the customer;
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the
collection of the fees is reasonably assured; and
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the
amount of fees to be paid by the customer is fixed or
determinable.
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The
Company recognizes revenue as services are performed
Off-Balance Sheet Arrangements
We had no outstanding derivative financial instruments, off-balance
sheet guarantees, interest rate swap transactions or foreign
currency contracts. We do not engage in trading activities
involving non-exchange traded contracts.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
We are a smaller reporting company as defined in Rule 12b-2 of the
Exchange Act and are not required to provide the information
required under this item.
Item 8. Financial Statements
10
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED DECEMBER 31, 2016 AND 2015
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RESULTS-BASED OUTSOURCING INC (FORMERLY DIGITAL COMMERCE SOLUTIONS
INC)
INDEX TO FINANCIAL STATEMENTS
DECEMBER
31, 2016
Report
of Independent Registered Public Accounting Firm
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F-2
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Financial
Statements
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Balance
Sheets as of December 31, 2016 and 2015
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F-3
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Statements
of Operations for the years ended December 31, 2016 and December
31, 2015
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F-4
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Statements
of Stockholders’ Equity(Deficit) for the period from January
1, 2015 through December 31, 2016
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F-5
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Statements
of Cash Flows for the years ended December 31, 2016 and December
31, 2015
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F-6
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Notes
to Financial Statements
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F-7
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F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and
Stockholders of
Results Based Outsourcing, Inc.
We have
audited the accompanying balance sheets of Results Based
Outsourcing, Inc. as of December 31, 2016 and 2015, and the related
statements of operations, stockholders’ equity (deficit), and
cash flows for the years then ended. Results Based Outsourcing
Inc’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the 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. The company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide 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 Results Based
Outsourcing, Inc. as of December 31, 2016 and 2015, and the results
of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the
United States of America.
The
accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As more fully discussed
inn Note 1 to the financial statements, the Company has a limited
operating history and its continued growth is dependent upon
obtaining additional financing to fund future obligations and pay
liabilities arising from normal business operations. These
conditions raise substantial doubt about its ability to continue as
a going concern. Management’s plans in regard to these
matters are also described in Note 1. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/
Rosenberg Rich Baker Berman & Company
Somerset, New
Jersey
April
12, 2017
F-2
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
BALANCE SHEETS
AS OF DECEMBER 31, 2016 AND 2015
ASSETS
|
2016
|
2015
|
|
|
|
CURRENT
ASSETS:
|
|
|
Cash
or cash equivalents
|
$11,354
|
$4,953
|
Accounts
receivable, net
|
10,500
|
-
|
Due
from shareholder
|
-
|
13,000
|
Prepaid
expenses
|
-
|
5,000
|
TOTAL
CURRENT ASSETS
|
21,854
|
22,953
|
|
|
|
Fixed assets,
net
|
1,950
|
3,250
|
TOTAL
ASSETS
|
$23,804
|
$26,203
|
|
|
|
LIABILIATIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts
payable and accrued expenses
|
$16,401
|
$11,691
|
Accrued
taxes
|
250
|
250
|
Due
to shareholder
|
26,250
|
-
|
TOTAL
CURRENT LIABILITIES
|
42,901
|
11,941
|
|
|
|
TOTAL
LIABILITIES
|
42,901
|
11,941
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT):
|
|
|
Preferred stock, $.0001 par value, 15,000,000 shares
authorized,
|
||
none
issued and outstanding
|
-
|
-
|
Common
stock, $.0001 par value, 75,000,000 shares authorized,
|
|
|
and 4,107,000 and 4,025,000 shares issued and
outstanding,
|
||
as
of December 31, 2016 and 2015, respectively
|
411
|
403
|
Additional
paid-in capital
|
36,730
|
35,098
|
Retained
deficit
|
(56,238)
|
(21,239)
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(19,097)
|
14,262
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$23,804
|
$26,203
|
The
accompanying notes to financial statements are an integral part of
these statements.
F-3
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
Year Ended
December 31, 2016
|
Year Ended
December 31, 2015
|
|
|
|
Revenues:
|
|
|
Professional
service revenues
|
$166,478
|
$168,017
|
Client expense
reimbursement
|
1,191
|
2,680
|
Total
Revenues
|
167,669
|
170,697
|
|
|
|
Cost of
revenues
|
31,460
|
25,223
|
Cost of revenues
from a related party
|
43,650
|
37,000
|
Gross
Profit
|
92,559
|
108,474
|
|
|
|
Operating
expenses:
|
|
|
Marketing and
sales
|
11,259
|
3,296
|
General and
administrative
|
85,099
|
68,666
|
General and
administrative costs from a related party
|
31,200
|
27,500
|
Total
operating expenses
|
127,558
|
99,462
|
|
|
|
Net
Income (Loss) from operations
|
(34,999)
|
9,012
|
|
|
|
Net
Income (Loss) before taxes
|
(34,999)
|
9,012
|
|
|
|
Net
Income (loss) applicable to common shareholders
|
$(34,999)
|
$9,012
|
|
|
|
Net
income( loss) per share - basic and diluted
|
$(0.01)
|
$0.00
|
|
|
|
Weighted
number of shares outstanding -
|
|
|
Basic
and diluted
|
4,096,666
|
4,025,000
|
The
accompanying notes to financial statements are an integral part of
these statements.
F-4
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
STATEMENT OF STOCKHOLDERS' EQUITY(DEFICIT)
FOR THE PERIOD FROM JANUARY 1, 2015
THROUGH DECEMBER 31, 2016
|
Preferred
Stock
|
Common
|
Paid-In
|
Retained
|
Stockholders'
Equity
|
||
|
Shares
|
Par
Value
|
Shares
|
Par
Value
|
Capital
|
(Deficit)
|
(Deficit)
|
Balance December
31, 2014
|
-
|
$-
|
4,025,000
|
$403
|
$35,098
|
(30,251)
|
5,250
|
|
|
|
|
|
|
|
|
Net income for
period
|
-
|
-
|
|
|
|
9,012
|
9,012
|
|
|
|
|
|
|
|
|
Balance December
31, 2015
|
-
|
$-
|
4,025,000
|
$403
|
$35,098
|
$(21,239)
|
$14,262
|
|
|
|
|
|
|
|
|
Net loss for
period
|
-
|
-
|
|
|
|
(34,999)
|
(34,999)
|
Stock based
compensation
|
|
|
82,000
|
8
|
1,632
|
|
1,640
|
|
|
|
|
|
|
|
|
Balance December
31, 2016
|
-
|
$-
|
4,107,000
|
$411
|
$36,730
|
$(56,238)
|
$(19,097)
|
The
accompanying notes to financial statements are an integral part of
these statements.
F-5
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
Year Ended
December 31 2016
|
Year Ended
December 30, 2015
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Net
income (loss)
|
$(34,999)
|
$9,012
|
Adjustments
to reconcile net income (loss) to cash provided by (used in)
operating activities:
|
|
|
|
|
|
Stock based
compensation
|
1,640
|
-
|
Depreciation
|
1,300
|
650
|
|
|
|
Change
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(10,500)
|
-
|
Due from(to)
shareholder
|
39,250
|
(8,000)
|
Prepaid
expenses
|
5,000
|
(5,000)
|
Accounts payable
and accrued expenses
|
4,710
|
(1,181)
|
Net
cash used in operating activities
|
$6,401
|
$(4,519)
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
Acquisition of
furniture and fixtures
|
-
|
(3,900)
|
Net
cash (used in) investing activities
|
$-
|
$(3,900)
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
6,401
|
(8,419)
|
|
|
|
CASH
AND CASH EQUIVALENTS at beginning of year
|
4,953
|
13,372
|
CASH
AND CASH EQUIVALENTS at end of year
|
$11,354
|
$4,953
|
|
|
|
Supplemental disclosure of cash flow
information:
|
|
|
Cash
paid for:
|
|
|
Interest
|
$-
|
$-
|
Income
Taxes
|
$-
|
$-
|
The
accompanying notes to financial statements are an integral part of
these statements.
F-6
RESULTS-BASED OUTSOURCING INC
(FORMERLY DIGITAL COMMERCE SOLUTIONS INC)
NOTES TO FINANCIAL STATEMENTS
Note 1. The Company History and Nature of the
Business
Results-Based
Outsourcing Inc. (formerly Digital Commerce Solutions Inc) (the
“Company”), formed on July 22, 2013, is engaged in
providing a variety of out-sourced business services which include;
accounting and bookkeeping, marketing, document storage, staffing,
recruiting and personal executive organization (collectively, the
“Services”). The Services are grouped into two
offerings; (i) Business Process Outsourcing (“BPO”),
and (ii) Software Managed Outsourcing (“SMO”). BPO
services brings people and process to a client’s business
that can ranged from providing a entire back office to individual
projects. SMO services bring software tools to a client’s
business to help them run more efficiently and
effectively.
Going
Concern Analysis
The
financial statements have been prepared using accounting principles
generally accepted in the United States of America applicable for a
going concern, which assumes that the Company will realize its
assets and discharge its liabilities in the ordinary course of
business. Since inception, the Company has a retained deficit of
$56,238 and had a working capital deficit of $21,047 at December
31, 2016. Our growth is dependent upon achieving sales growth,
management of operating expenses and ability of the Company to
obtain the necessary financing to fund future obligations and pay
liabilities arising from normal business operations when they come
due, and upon profitable operations.
Management has concluded that due to the conditions described
above, there is substantial doubt about the entity’s ability
to continue as a going concern through April 13, 2018. We have
evaluated the significance of these conditions in relation to our
ability to meet our obligations and believe that we may need to
either borrow funds from our majority shareholder or raise
additional capital through equity or debt financings. We expect our
current majority shareholder will be willing and able to provide
such additional capital. However, we cannot be certain that such
capital (from our shareholders or third parties) will be available
to us or whether such capital will be available on terms that are
acceptable to us. Any such financing likely would be dilutive to
existing stockholders and could result in significant financial
operating covenants that would negatively impact our business. If
we are unable to raise sufficient additional capital on acceptable
terms, we will have insufficient funds to operate our business or
pursue our planned growth.
Note 2. Summary of Significant Accounting Policies
Cash and Cash Equivalents
For purposes of reporting within the statement of cash flows, the
Company considers all cash on hand, cash accounts not subject to
withdrawal restrictions or penalties, and all highly liquid debt
instruments purchased with a maturity of three months or less to be
cash and cash equivalents. The Company’s cash and cash
equivalents are located in a United States bank. The Company does
not have any cash equivalents as of December 31, 2016 or December
31, 2015.
Accounts Receivable
The Company’s accounts receivable are derived from direct
customers. Collateral is not required for accounts receivable. The
Company maintains an allowance for potential credit losses as
considered necessary. The Company performs ongoing reviews of all
customers that have breached their payment terms or for whom
information has become available indicating a risk of
non-recoverability. The Company records an allowance for bad debts
for specific customers identified as well as an allowance based on
its historical collection experience. The Company’s
evaluation of the allowance for potential credit losses requires
the use of estimates and the actual results may differ from these
estimates. At December 31, 2016 and 2015, the allowance for
potential credit losses was $0
F-7
Fixed Assets
Office equipment is stated at cost and depreciated over three years
using the straight line method of accounting. For the year end
December 31, 2016, and 2015 the Company recorded depreciation
expense of $1,300 and $650, respectively.
Revenue Recognition
The Company derives its revenue from the sale of compliance, legal,
risk management and management and public reporting consulting
services. The Company utilizes written contracts as the means to
establish the terms and condition services are sold to
customers.
Consulting Services
Because the Company provides its applications as services, it
follows the provisions of Securities and Exchange Commission Staff
Accounting Bulletin (“SAB”) No.
104, Revenue
Recognition. The Company
recognizes revenue when all of the following conditions are
met:
●
|
there
is persuasive evidence of an arrangement;
|
●
|
the
service has been provided to the customer;
|
●
|
the
collection of the fees is reasonably assured; and
|
●
|
the
amount of fees to be paid by the customer is fixed or
determinable.
|
The Company recognizes revenue as services are performed or monthly
based upon contract terms. Contracts may either be for a specific
project, or, a monthly recurring fee.
Reimbursements
The Company incurs certain out-of-pocket expenses that are
reimbursed by its clients, which are accounted for as revenue in
its Statement of Operations.
Net Income (Loss) per Common Share
Basic income (loss) per share is computed by dividing the net
income (loss) attributable to the common stockholders by the
weighted average number of shares of common stock outstanding
during the period. Fully diluted income per share is computed
similar to basic income per share except that the denominator is
increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. There
were no dilutive financial instruments issued or outstanding for
the years ended December 31, 2016 or 2015.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC 740.
Deferred tax assets and liabilities are determined based on
temporary differences between the bases of certain assets and
liabilities for income tax and financial reporting purposes. The
deferred tax assets and liabilities are classified according to the
financial statement classification of the assets and liabilities
generating the differences.
The Company maintains a valuation allowance with respect to
deferred tax assets. The Company establishes a valuation allowance
based upon the potential likelihood of realizing the deferred tax
asset and taking into consideration the Company’s financial
position and results of operations for the current period. Future
realization of the deferred tax benefit depends on the existence of
sufficient taxable income within the carry-forward period under the
Federal tax laws. Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about
the realizability of the related deferred tax asset. Any change in
the valuation allowance will be included in income in the year of
the change in estimates
F-8
Fair Value of Financial Instruments
The Company estimates the fair value of financial instruments using
the available market information and valuation methods.
Considerable judgment is required in estimating fair value.
Accordingly, the estimates of fair value may not be indicative of
the amounts the Company could realize in a current market exchange.
As of December 31, 2016 the carrying value of accounts receivable,
accounts payable-trade and accrued liabilities approximated fair
value due to the short-term nature and maturity of these
instruments.
Customer Concentration Disclosure.
For the year ended December 31, 2016, one customers make up 55% of
our gross revenue. For the year ended December 31, 2015, four
customers make up 93.4% of our gross revenue. They represent 16.4%,
47.5% and 14.6% and 14.9%.
\
Stock-Based Compensation
Stock compensation arrangements with non-employee service providers
are accounted for in accordance ASC 505-50 Equity-Based Payments to
Non-Employees, using a
fair value approach. For the year ended December 31, 2016 the
Company recorded $1,640 in stock-based
compensation.
Estimates
The financial statements are prepared on the basis of accounting
principles generally accepted in the United States. The preparation
of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities as of December 31, 2016 and cumulative expenses from
inception. Actual results could differ from those estimates made by
management.
Recent accounting pronouncements
In March 2016, the Financial Accounting Standards Board issued
Accounting Standards Codification Update No. 2016-09 Compensation
– Stock Compensation (Topic 718). The amendments in this
update affect all entities that issue share-based payment awards to
their employees. The areas for simplification in this Update
involve several aspects of the accounting for share-based payment
transactions, including the income tax consequences, classification
of awards as either equity or liabilities, and classification on
the statement of cash flows. For public business entities, the
amendments in this Update are effective for annual periods
beginning after December 15, 2016, and interim periods within those
annual periods.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts
with Customers which modifies how all entities recognize revenue
and various other revenue accounting standards for specialized
transactions and industries. This update is a comprehensive new
revenue recognition model that requires a company to recognize
revenue to depict the transfer of goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. In
August 2015, the FASB issued ASU 2015-14, which deferred the
effective date of the ASU to fiscal years beginning after December
15, 2017, and interim periods within those fiscal years. The
Company is currently evaluating the possible impact of ASU 2014-15,
but does not anticipate that it will have a material impact on the
Company's consolidated financial statements.
The Company has implemented all new accounting pronouncements that
are in effect and that may impact its financial statements and does
not believe that there are any other new accounting pronouncements
that have been issued that might have a material impact on its
financial position or results of operations.
3. Common Stock
On
February 16, 2016, the Board of Directors approved an agreement
with legal counsel for the Company which included; the issuance of
82,000 shares of common stock and the total payment of $15,000 to
counsel for services rendered through the date the Company’s
S-1 filing is declared effective. The $15,000 will be paid the
sooner of any combination of; (i) the sum of $500 per month
commencing on November 1, 2015, (ii) the first use of proceeds from
the S-1 offering, or (iii) the change of control of the
Company.
F-9
4. Income Taxes
The
provision for income taxes for the twelve months ended December 31,
2016 and 2015 was as follows (assuming a 15% effective tax
rate):
|
Year ended
December 31, 2016
|
Year ended
December 31, 2015
|
|
|
|
Current
Tax Provision:
|
|
|
Federal-State-Local
|
$-
|
$-
|
|
|
|
Total current tax
provision
|
$-
|
$-
|
|
|
|
Deferred
Tax Provision:
|
|
|
Loss
carry-forwards
|
(5,250)
|
-
|
Change
in valuation allowance
|
5,250
|
-
|
|
|
|
Total deferred tax
provision
|
$-
|
$-
|
The
Company had deferred income tax assets as follows:
|
December 31,
2016
|
December 31,
2015
|
Loss
carry-forwards
|
$(8,436)
|
$3,186
|
Less
- valuation allowance
|
8,436
|
(3,186)
|
|
|
|
Total net deferred
tax assets
|
$-
|
$-
|
The
Company provided a valuation allowance equal to the deferred income
tax assets for period ended December 31, 2016 because it is not
presently known whether future taxable income will be sufficient to
utilize the loss carry-forwards.
As of
December 31, 2016, the Company had approximately $56,237 in tax
loss carry-forwards that can be utilized future periods to reduce
taxable income, and expire by the year 2036.
The
Company did not identify any material uncertain tax positions.
The Company did not recognize any interest or penalties for
unrecognized tax benefits.
The
federal income tax returns of the Company are subject to
examination by the IRS, generally for three years after they are
filed. The tax returns for year end 2014, 2015 and 2016 are still
subject to examination.
5. Related Party Loans and Transactions
Ocean Cross Business Solutions Group LLC.
On
August 1, 2013 the Company has engaged the services of Ocean Cross
Business Solutions Group LLC (“OCBSG Agreement”), to
provide assistance with filing of the SEC Form S-1, general
accounting, finance, general management and client delivery
services. Ocean Cross Business Solutions Group LLC is owned by
William Schloth, the husband of Mary Ellen Schloth, the CEO and
sole shareholder of MLH, our major shareholder. The OCBSG Agreement
provides for a base monthly consulting fee of $5,000, plus
additional payments based upon services rendered during a period.
The Company terminated the OCBSG Agreement as of September 30, 2015
and no money is owed as of December 31, 2015 or 2016. The Company
has reflected the above arrangement in statement of operation as
related party expenses. For the year ended December 31, 2015, the
Company has paid out $44,500. Of that amount, for the year ended
December 31, 2015, $22,500 and $22,000, has been allocated to
operating expenses and cost of revenue.
F-10
William Schloth
On
October 1, 2015 the Company has engaged the services of William
Schloth (“WS Agreement”) to provide assistance with
filing of the SEC Form S-1, general accounting, finance, general
management and client delivery services. Mr. Schloth is the husband
our Mary Ellen Schloth, the CEO and majority shareholder of MLH,
our majority shareholder. The WS Agreement provides for a monthly
consulting fee of $5,000, plus additional payments based upon
services rendered during a period. The Agreement may be terminated
by either party at any time. The Company did not owe any money
under the WS Agreement as of December 31, 2016
The
Company has reflected the above arrangement in the statements of
operations as related party expenses. For the twelve months ended
December 31, 2016 and 2015 the Company paid $74,850, and $20,000,
respectively. For the twelve months ended December 31, 2016 and
2015, of that amount, $31,200 and 43,650, and, $5,000 and $15,000
have been allocated to operating expenses and cost of revenue,
respectively.
Shareholder Loan
For the
period ended, December 31, 2016 the Company owed MLH $26,250. For
the period ended December 31, 2015, the Company had loaned MLH a
total of $13,000. The loans are non-interest bearing with no
agreement in place for repayment.
6. Subsequent
Events
Subsequent
events have been evaluated through April 13, 2017 which is the date
these financial statements were available to be
issued.
On
February 22, 2017, MLH loaned the Company $8,500.
On
March 8, 2017, the Company executed a promissory note (the
“Note”) with an unaffiliated lender in the amount of
$25,000. The Note matures one year from issuance and has a 12%
interest rate.
F-11
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of our Annual Report on Form
10-K, an evaluation was carried out by management, with the
participation of our Chief Executive Officer (“CEO”)
and Chief Financial Officer (“CFO”), of the
effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934 (Exchange Act) as of December 31, 2016. Disclosure controls
and procedures are designed to ensure that information required to
be disclosed in reports filed or submitted under the Exchange Act
is recorded, processed, summarized and reported within the time
periods specified, and that such information is accumulated and
communicated to management, including the Chief Executive Officer
and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
During evaluation of disclosure controls and procedures as of
December 31, 2016 conducted as part of our annual audit and
preparation of our annual financial statements, management
conducted an evaluation of the effectiveness of the design and
operations of our disclosure controls and procedures and concluded
that our disclosure controls and procedures were not effective.
Management determined that at December 31, 2016, we had a material
weakness that relates to the relatively small number of employees
who have bookkeeping and accounting functions and
therefore prevents us from segregating duties within our
internal control system.
Management’s Report on Internal Control over Financial
Reporting
Management is responsible for the preparation and fair presentation
of the financial statements included in this annual report. The
financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of
America and reflect management’s judgment and estimates
concerning effects of events and transactions that are accounted
for or disclosed.
Management is also responsible for establishing and maintaining
adequate internal control over financial reporting. Our internal
control over financial reporting includes those policies and
procedures that pertain to our ability to record, process,
summarize and report reliable data. Management recognizes that
there are inherent limitations in the effectiveness of any internal
control over financial reporting, including the possibility of
human error and the circumvention or overriding of internal
control. Accordingly, even effective internal control over
financial reporting can provide only reasonable assurance with
respect to financial statement presentation. Further, because of
changes in conditions, the effectiveness of internal control over
financial reporting may vary over time.
In order to ensure that our internal control over financial
reporting is effective, management regularly assesses controls and
did so most recently for its financial reporting as of December 31,
2016. This assessment was based on criteria for effective internal
control over financial reporting described in the Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission. Based on this
assessment, management has concluded that, as of December 31, 2016,
we had a material weakness that relates to the relatively small
number of employees who have bookkeeping and accounting functions
and therefore prevents us from segregating duties within our
internal control system. The inadequate segregation of duties is a
weakness because it could lead to the untimely identification and
resolution of accounting and disclosure matters or could lead to a
failure to perform timely and effective reviews.
This annual report filed on Form 10-K does not include an
attestation report of the Company’s registered public
accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation
by our registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit us to
provide only management’s report in this annual
report.
Item 9B. Other Information.
None
12
PART III
Item 10. Directors, Executive Officers and Corporate
Governance.
The following table sets forth the name and age of officers and
director as of the date hereof. Our executive officers are elected
annually by our board of directors. Our executive officers hold
their offices until they resign, are removed by the Board, or his
successor is elected and qualified.
Our management consists of:
Name
|
|
Age
|
|
Title
|
|
|
|
|
|
Mary
Ellen Schloth
|
|
53
|
|
Chairman,
Chief Executive Officer (principal executive officer)
and
Chief Financial Officer (principal financial officer)
|
Mr. Schloth has served as our President, Sole Director, CFO, CEO
since our inception (July 22, 2013). Since
January 2015, Mrs. Schloth has been employed as a senior accounting
manager for a non-profit corporation in Westport, Connecticut.
From January 2003 to January 2015, Mrs. Schloth was
self-employed and performed business services for SME
businesses. These services have included
supervising the accounting and financial reporting departments,
organizing and managing human resource activities and automating
processes, such as inventory management system, point of sale
revenue systems, accounting system and sequel database
programs. Prior to being self employed, Ms. Schloth
worked for a multi-national insurance and real estate management
company in Greenwich, Connecticut, as Controller. Prior
to that employment, she was employed by Price Waterhouse in
Stamford Connecticut as a senior auditor. Ms. Schloth
has a Bachelor of Science degree in accounting, with a minor in
information systems, from Fairfield University.
Board of Directors
The minimum number of directors we are authorized to have is one
and the maximum is three. In no event may we have less
than one director. Although we anticipate appointing additional
directors in the future, as of the date hereof we have one
director, Ms Mary Ellen Schloth. We considered Ms. Schloth’s
prior financial, accounting and consulting experience were
important factors in concluding that he was qualified to serve as
one of our directors. Directors on our Board of Directors are
elected for one-year terms and serve until the next annual security
holders’ meeting or until their death, resignation,
retirement, removal, disqualification, or until a successor has
been elected and qualified. All officers are appointed annually by
the Board of Directors and serve at the discretion of the Board.
Currently, directors receive no compensation for their services on
our Board.
All directors will be reimbursed by us for any accountable expenses
incurred in attending director meetings provided that we have the
resources to pay these fees. We will consider applying for officers
and director liability insurance at such time when we have the
resources to do so.
Committees of the Board of Directors
Concurrent with having sufficient members and resources, our Board
of Directors intends to establish an audit committee and a
compensation committee. The audit committee will review the results
and scope of the audit and other services provided by the
independent auditors and review and evaluate the system of internal
controls. The compensation committee will review and recommend
compensation arrangements for the officers and employees. No final
determination has yet been made as to the memberships of these
committees or when we will have sufficient members to establish
committees. We believe that we will need a minimum of three
independent directors to have effective committee
systems.
As of the date hereof, we have not established any Board
committees.
Family Relationships
No family relationship exists between any director, executive
officer, or any person contemplated to become such.
Director Independence
We currently do not have any independent directors serving on our
board of directors.
Possible Potential Conflicts
The OTCBB on which we plan to have our shares of common stock
quoted does not currently have any director independence
requirements.
13
No member of management will be required by us to work on a full
time basis. Accordingly, certain conflicts of interest may arise
between us and our officer(s) and director(s) in that they may have
other business interests in the future to which they devote their
attention, and they may be expected to continue to do so although
management time must also be devoted to our business. As a result,
conflicts of interest may arise that can be resolved only through
their exercise of such judgment as is consistent with each
officer's understanding of his/her fiduciary duties to
us.
Currently we have only one officer and one director (both of whom
are the same person), and will seek to add additional officer(s)
and/or director(s) as and when the proper personnel are located and
terms of employment are mutually negotiated and agreed, and we have
sufficient capital resources and cash flow to make such
offers.
We cannot provide assurances that our efforts to eliminate the
potential impact of conflicts of interest will be
effective.
Involvement in Certain Legal Proceedings
None of our directors or executive officers has, during the past
ten years:
● has had any bankruptcy petition filed by or against any
business of which he was a general partner or executive officer,
either at the time of the bankruptcy or within two years prior to
that time;
● been convicted in a criminal proceeding or been subject to
a pending criminal proceeding (excluding traffic violations and
other minor offences);
● been 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, futures, commodities or banking
activities;
● been found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been
reversed, suspended, or vacated;
● been subject or a party to or any other disclosable event
required by Item 401(f) of Regulation S-K.
Code of Business Conduct and Ethics
We currently do not have a Code of Business Conduct and
Ethics.
Item 11. Executive Compensation.
Name and
principal position (a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock Awards
($)
(e)
|
Option Awards
($)
(f)
|
Non-Equity
Incentive Plan
Compensation
($)
(g)
|
Nonqualified
Deferred Compensation Earnings
($)
(h)
|
All Other
Compensation ($)
(i)
|
Total
($)
(j)
|
Mary Ellen
Schloth
CEO, CFO and
Director
|
|
2015
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
2016
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Other than as set forth in the table above, there has been no cash
or non-cash compensation awarded to, earned by or paid to any of
our officers and directors since inception. We do not
intend to pay salaries in the next twelve months. We do
not currently have a stock option plan, non-equity incentive plan
or pension plan.
Director Compensation
Our directors will not receive a fee for attending each board of
directors meeting or meeting of a committee of the board of
directors. All directors will be reimbursed for their reasonable
out-of-pocket expenses incurred in connection with attending board
of director and committee meetings.
Employment Agreement
There is no formal employment arrangement with Mrs. Schloth at this
time. As the date of this filing we have no permanent staff other
than our President, Mrs. Schloth who is employed elsewhere and has
the flexibility to work on the Company up to 5-10 hours per week.
She is prepared to devote more time to our operations as may be
required and as our finances permit. Mrs. Schloth’s
compensation has not been fixed or based on any percentage
calculations. She will make all decisions determining the amount
and timing of his compensation and, for the immediate future, has
elected not to receive any compensation which permits us to meet
our financial obligations. Mrs. Schltoh’s compensation amount
may be formalized if and when the Company obtains future financing
beyond the offering or if the Company generates sufficient cash
flow to support his salary.
14
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
The
following table sets forth certain information as of the date
hereof with respect to the beneficial ownership of our common
stock, the sole outstanding class of our voting securities, by (i)
any person or group owning more than 5% of each class of voting
securities, (ii) each director, (iii) each executive officer named
in the Summary Compensation Table in the section entitled
“Executive Compensation” above and (iv) all executive
officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
subject to options, warrants or convertible securities exercisable
or convertible within sixty (60) days of the date of this
Registration Statement are deemed outstanding for computing the
percentage of the person or entity holding such options, warrants
or convertible securities but are not deemed outstanding for
computing the percentage of any other person, and is based on
4,107,000 common shares issued and outstanding as of the date
hereof.
Name And Address
(1)
|
Beneficially
Owned
|
Percentage
Owned
|
Mountain Laurel
Holdings Inc. (2)
|
3,500,000
|
85.2%
|
All directors and
officers as a group (1 persons)
|
3,500,000
|
85.2%
|
_________________
(1)
Unless
otherwise stated, the address is 2490 Blackrock Turnpike #344,
Fairfield CT 06825
(2)
The
address is: 80 Mountain Laurel Road, Fairfield, Connecticut
06824. Mary Ellen Schloth, our CEO and Sole Director is
the sole owner.
Item 13. Certain Relationships and Related Transactions, and
Director Independence.
Presently, our sole officer and director provides office space to
the Company for no charge. However, we do not have a written lease
agreement. Our mailing address is 2490 Blackrock Turnpike #344,
Fairfield CT 06825.
Ocean Cross Business Solutions Group LLC.
On
August 1, 2013 the Company has engaged the services of Ocean Cross
Business Solutions Group LLC (“OCBSG Agreement”), to
provide assistance with filing of the SEC Form S-1, general
accounting, finance, general management and client delivery
services. Ocean Cross Business Solutions Group LLC is owned by
William Schloth, the husband of Mary Ellen Schloth, the CEO and
sole shareholder of MLH, our major shareholder. The OCBSG Agreement
provides for a base monthly consulting fee of $5,000, plus
additional payments based upon services rendered during a period.
The Company terminated the OCBSG Agreement as of September 30, 2015
and no money is owed as of December 31, 2015 or 2016. The Company
has reflected the above arrangement in statement of operation as
related party expenses. For the year ended December 31, 2015, the
Company has paid out $44,500. Of that amount, for the year ended
December 31, 2015, $22,500 and $22,000, has been allocated to
operating expenses and cost of revenue.
William Schloth
On
October 1, 2015 the Company has engaged the services of William
Schloth (“WS Agreement”) to provide assistance with
filing of the SEC Form S-1, general accounting, finance, general
management and client delivery services. Mr. Schloth is the husband
our Mary Ellen Schloth, the CEO and majority shareholder of MLH,
our majority shareholder. The WS Agreement provides for a monthly
consulting fee of $5,000, plus additional payments based upon
services rendered during a period. The Agreement may be terminated
by either party at any time. The Company did not owe any money
under the WS Agreement as of December 31, 2016
The
Company has reflected the above arrangement in the statements of
operations as related party expenses. For the twelve months ended
December 31, 2016 and 2015 the Company paid $74,850, and $20,000,
respectively. For the twelve months ended December 31, 2016 and
2015, of that amount, $31,200 and 43,650, and, $5,000 and $15,000
have been allocated to operating expenses and cost of revenue,
respectively.
15
Shareholder Loan
For the
period ended, December 31, 2016 the Company owed Mountain Laurel
Holdings Inc(MHL), an entity owned and controlled by our sole
officer and director $26,250. On February 22, 2017, MHL loaned the
company $8,500. The loans are non-interest bearing with no
agreement in place for repayment.
Except as set forth above, none of the following persons has any
direct or indirect material interest in any transaction to which we
are a party since our incorporation or in any proposed transaction
to which we are proposed to be a party:
(A)
|
Any of
our directors or officers;
|
(B)
|
Any
proposed nominee for election as our director;
|
(C)
|
Any
person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached
to our
common stock; or
|
(D)
|
Any
relative or spouse of any of the foregoing persons, or any relative
of such spouse, who has the same house as such person or who
is a director or officer of any parent or subsidiary of our
company.
|
Item 14. Principal Accounting Fees and Services.
The following table indicates the fees paid by us for services
performed for the:
|
Year Ended
December 31, 2016
|
Year Ended December 31, 2015
|
Audit
Fees
|
$13,500
|
$13,000
|
All
Other Fees
|
1,500
|
1,500
|
Total
|
$15,000
|
$14,500
|
16
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following exhibits are incorporated into this Form 10-K Annual
Report:
Exhibit
Number
|
|
Description
|
|
|
|
31.1*
|
|
Rule 13a-14(a) Certification of the Chief Executive and Financial
Officer
|
32.1*
|
|
Section 1350 Certification of Chief Executive and Financial
Officer
|
*
Filed along with this document
17
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.
|
Results-Based Outsourcing Inc
|
|
|
|
|
|
|
Dated:
April 13, 2017
|
By:
|
/s/
Mary
Ellen Schloth
|
|
|
|
Mary
Ellen Schloth
|
|
|
|
Chief
Executive Officer,
Chief
Accounting Officer & Chairman
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons
on behalf of the registrant and in the capacities
indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Mary
Ellen Schloth
|
|
Chief Executive Officer, Chief Accounting Officer &
Chairman
|
|
April 13,
2017
|
Mary Ellen
Schloth
|
|
|
|
|
18