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EX-32.1 - EXHIBIT 32.1 - Results Based Outsourcing Incexhibit32_1.htm
EX-31.1 - EXHIBIT 31.1 - Results Based Outsourcing Incexhibit31_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the six months ended June 30, 2018.

OR

 

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

 

 

 

For the transition period from                  to                      .

 

Commission file number: 333-209836

 

Results-Based Outsourcing Inc.

 (Exact name of registrant in its charter)

 

Delaware

 

32-0416399

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

2490 Blackrock Turnpike 344, Fairfield CT

 

06825

(Address of principal executive offices)

 

(Zip Code)


203.635.7600

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 days. 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 of the Exchange Act.


Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging Growth Company





1



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12 (a) or the Exchange Act

 

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

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

 

Class

 

Outstanding August 9, 2018

Common Stock, $0.0001 par value per share

 

                              4,107,000 shares

 

 




2



  TABLE OF CONTENTS

  

  

PART I

FINANCIAL INFORMATION

4

ITEM 1.

INTERIM FINANCIAL STATEMENTS

4

ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

5

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

10

ITEM 4.

CONTROLS AND PROCEDURES

10

ITEM 5.

OTHER

10

PART II

OTHER INFORMATION

11

ITEM 1.

LEGAL PROCEEDINGS

11

ITEM 1A.

RISK FACTORS

11

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

11

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

11

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

11

ITEM 5.

OTHER INFORMATION

11

ITEM 6.

EXHIBITS

 11

SIGNATURES

 12

 

 




3



PART I. Financial Information

 

Item 1. Interim Financial Statements.

 

Condensed Balance Sheets as of June 30, 2018 (Unaudited) and December 31, 2017

 

F-1

  

 

 

Condensed Statements of Operations for the three and six months ended June 30, 2018 and 2017 (Unaudited)

 

F-2

 

 

 

Condensed Statement of Changes in Stockholders’ (Deficit) for the six months ended June 30, 2018 (Unaudited)

 

F-3

  

 

 

Condensed Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (Unaudited)

 

F-4

  

 

 

Notes to Condensed Financial Statements

 

F-5

 

 




4



RESULTS-BASED OUTSOURCING INC

CONDENSED BALANCE SHEETS

AS OF JUNE 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017

  

 

 

 

June 30, 2018

 

December 31, 2017

ASSETS

 

 

 

 

CURRENT ASSETS:

 

 

 

 

   Cash or cash equivalents

 

$

 

$

  Accounts receivable, net

 

 

         TOTAL CURRENT ASSETS

 

 

 

 

 

 

 

Fixed assets, net

 

 

650 

        TOTAL ASSETS

 

$

 

$

650 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

   Accounts payable and accrued expenses

 

$

19,577 

 

$

   Accrued taxes

 

250 

 

250 

   Accrued interest

 

3,961 

 

2,449 

   Due to shareholder

 

9,549 

 

163 

   Note payable

 

25,000 

 

25,000 

        TOTAL CURRENT LIABILITIES

 

58,337 

 

27,862 

 

 

 

 

 

        TOTAL LIABILITIES

 

58,337 

 

27,682 

 

 

 

 

 

   Commitment & Contingencies

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' (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 issued and outstanding, as

      of June 30, 2018, and December 31, 2017

411 

 

411 

   Additional paid-in capital

 

57,601 

 

57,601 

   Retained deficit

 

(116,349)

 

(85,224)

        TOTAL STOCKHOLDERS' (DEFICIT)

 

(58,337)

 

(27,212)

        TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)

$

 

$

650 


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

 

 




F-1



RESULTS-BASED OUTSOURCING INC

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017


         

 Three Months Ended June 30,

2018                                 2017

 

   Six Months Ended June 30,

   2018                                2017

 

 (Unaudited)

 (Unaudited)

 

 (Unaudited)

 (Unaudited)

 

 

 

 

 

 

Revenues:

 

 

 

 

 

Professional service revenues

$

$

15,500 

 

$

$

28,000 

Total Revenues

15,500 

 

28,000 

 

 

 

 

 

 

Cost of revenues from a related party

6,000 

 

10,750 

Gross Profit

9,500 

 

17,250 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Marketing and sales

892 

 

1,173 

General and administrative

18,169 

12,853 

 

29,613 

31,590 

General and administrative costs from a related party

1,500 

 

4,500 

      Total operating expenses

18,169 

15,245 

 

29,613 

37,263 

 

 

 

 

 

 

Net Loss from operations

(18,169)

(5,745)

 

(29,613)

(20,013)

 

 

 

 

 

 

Other expenses

 

 

 

 

 

  Interest expense

756 

748 

 

1,512 

937 

      Total other expenses

756 

748 

 

1,512 

937 

 

 

 

 

 

 

Net Loss

(18,925)

(6,493)

 

(31,125)

(20,950)

 

 

 

 

 

 

Net Loss applicable to common shareholders

$

(18,925)

$

(6,493)

 

$

(31,125)

$

(20,950)

 

 

 

 

 

 

    Net loss per share - basic and diluted

($0.00)

($0.00)

 

($0.01)

($0.01)

 

 

 

 

 

 

    Weighted number of shares outstanding - Basic and diluted

4,107,000 

4,107,000 

 

4,107,000 

4,107,000 


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

 

 





F-2



RESULTS-BASED OUTSOURCING INC

CONDENSED STATEMENT OF STOCKHOLDERS' (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2018 (UNAUDITED)


 

Preferred Stock

 

Common

 

Paid-In

Retained

Stockholders'

 

Shares

Par Value

Shares

Par Value

Capital

(Deficit)

 Equity (Deficit)


Balance December 31, 2017

-

$

-

4,107,000

$

411

$

57,601

$

(85,224)

$

(27,212)

 

 

 

 

 

 

 

 

Net loss for period

-

-

 

 

 

(31,125)

(31,125)

 

 

 

 

 

 

 

 

Balance June 30, 2018

-

$

-

4,107,000

$

411

$

57,601

$

(116,349)

$

(58,337)


 

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






F-3



RESULTS-BASED OUTSOURCING INC

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED) 

 

 

 

Six Months Ended June 30, 2018

 

Six Months Ended June 30, 2017

 

 

   

 

   

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

(31,125)

 

$

(20,950)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

Depreciation

 

650 

 

650 

Change in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

2,000 

Accounts payable and accrued expenses

 

19,577 

 

(1,627)

Accrued interest expense

 

1,512 

 

937 

Net cash used in operating activities

 

$

(9,386)

 

$

(18,990)

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES:

 

 

 

 

Due to shareholder

 

9,386 

 

(14,000)

Proceeds from issuance of note payable

 

 

25,000 

Net cash provided by financing activities

 

$

9,386 

 

$

11,000 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

 

(7,990)

 

 

 

 

 

CASH AND CASH EQUIVALENTS at beginning of year

 

 

11,354 

CASH AND CASH EQUIVALENTS at end of year

 

$

 

$

3,365 

 

 

 

 

 

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-4



RESULTS-BASED OUTSOURCING

NOTES TO INTERIM CONDENSED 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 range from providing an entire back office to individual projects.   SMO services bring software tools to a client’s business to help them run more efficiently and effectively.   


On October 30, 2017, Mountain Laurel Holdings, Inc (“MHL”), the Company’s then majority shareholder, and three affiliates, sold their stock, 3,500,000 and 37,500 shares, respectively, collectively representing 86.1% of the Company’s capital stock, to Flemming J.H Hansen (“Hansen”).    Along with the Transaction, the sole owner of MHL, the then sole officer and director resigned in all capacities and Hansen became the sole officer and director.   


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 $116,349 and had a working capital deficit of $58,337 at June 30, 2018. 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 August 2019. 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 majority shareholder and CEO, Flemming J.H. Hansen, 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 June 30, 2018 or December 31, 2017.

 

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 June 30, 2018 and December 31, 2017, the allowance for potential credit losses was $0.




F-5



Fixed Assets


Office equipment is stated at cost and depreciated over three years using the straight-line method of accounting. For the three and six months ending June 30, 2018, and 2017, the Company recorded depreciation expense of $325 and $650, and $325 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.


In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts.


Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018.


Services revenue is recognized when the professional consulting or other ancillary services are provided to the customer.

 

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.


The Company provides customers with payment terms of thirty days.

 

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 three and six-month periods ended June 30, 2018 or 2017.

 

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.

 




F-6




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 

 

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 June 30, 2018, 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 three months ended June 30, 2017, 3 customers make up 100% of our gross revenue.   They represent 39%, 32% and 29% for the three months ended June 30, 2017.  


For the six months ended June 30, 2017, 3 customers make up 100% of our gross revenue.   They represent 38%, 32%, and 30% for the six months ended June 30, 2017.


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 three and six months ended June 30, 2018, and 2017, the Company had no 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 June 30, 2018 and cumulative expenses from inception. Actual results could differ from those estimates made by management.

 

Recent accounting pronouncements

 

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 adoption of this amendment had no effect on the 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.

 




F-7




3. Note Payable

 

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. For the three and six months ended June 30, 2018, the Company recorded $756 and $1,512 in interest expense.  Per an amendment to Note, the due date was extended until December 31, 2018.

 

4. Related Party Loans and Transactions

 

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 of Mary Ellen Schloth, the then CEO and former majority shareholder of MLH, our former majority shareholder.  The WS Agreement provides for a monthly consulting fee of $5,000, plus additional payments based upon services rendered during a period.  No amounts are owed under the WS Agreement as of June 30, 2018.

During the period the WS Agreement was in-place the Company has reflected the above arrangement in statement of operation as related party expenses. For the three months ended June 30, 2018 and 2017 the Company paid $0, and $7,500, respectively. Of those amounts, $0 and $0 and $6,000 and $1,500 have been allocated to cost of revenue and general and administrative expenses, respectively. For the six months ended June 30, 2018 and 2017 the Company paid $0, and $15,250, respectively. Of those amount, $0 and $4,500 and $10,750 and $0 have been allocated to cost of revenue and general and administrative expenses, respectively.

 

Shareholder Loans

 

As of June 30, 2018 and December 31, 2017, the Company owed the shareholders $9,549 and $163, respectively.





F-8



Item 2.  Management’s Discussion and Analysis or Plan of Operation.

 

FORWARD-LOOKING STATEMENTS

 

Certain matters discussed herein are forward-looking statements.  Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:

 

1. 

 

our future operating results;  

2. 

 

our business prospects; 

3. 

 

any contractual arrangements and relationships with third parties; 

4. 

 

the dependence of our future success on the general economy; 

5. 

 

any possible financings; and 

6. 

 

the adequacy of our cash resources and working capital. 

 

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning.   Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements.   Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of filing of this Form 10-Q.   Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.  The forward-looking statements included herein are only made as of the date of filing of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

 

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 become 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.




5




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:

 

 

Companies that produce, manufacture or process things;

 

 

Companies that retail, distribute or merchant things; or

 

 

Companies that offer professional advice or knowledge-based services.

 

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, 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:

 

   

it is large, continues to grow and remains underserved by professional services companies; and

 

   

it typically has fewer in-house resources than larger businesses and, as a result, is generally more dependent on external resources;


Our Strategy


Our strategy for growing our operations includes:

 

 

Rolling out various outbound sales and marketing campaigns to grow our client base;


 

Expanding our outsourced third-party provider base to assist in cost efficiently delivering our services; and

 

 

Growth through acquisition with complementary service providers and software product companies.




6




Plan of Operations

 

 We plan to establish a broad customer base by various traditional and internet marketing campaigns.


Over the next twelve months we plan to;


-

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.


·        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.


·        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 unaudited three-month periods ending June 30, 2018 and 2017

 

Revenues and Cost of Revenues

 

Total revenue for the three months ended June 30, 2018 and 2017 was $0 versus $15,500, respectively. The primary reason for the decline in revenues was due to health issues suffered by Flemming J.H. Hansen as a result of which Mr. Hansen has been unable to dedicate the time and energy to the Company’s business as he had previously.    

 

Cost of revenues for the three months ended June 30, 2018 and 2017 was $0 versus $6,000, respectively.  Cost of revenue included payments to a related party for the three months ended June 30, 2018 and 2017, respectively. The primary reason for the decline in cost of revenue was due to health issues suffered by Flemming J.H. Hansen as a result of which Mr. Hansen has been unable to dedicate the time and energy to the Company’s business as he had previously.

 




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Operating Expenses

 

Total operating expenses for the three months ended June 30, 2018 and 2017, was $18,169 versus $15,245, respectively. The increase was primarily due to increased professional services fees.

 

For the unaudited six-month periods ending June 30, 2018 and 2017

 

Revenues and Cost of Revenues

 

Total revenue for the six months ended June 30, 2018 and 2017 was $0 versus $28,000, respectively. The primary reason for the decline in revenues was due to health issues suffered by Flemming J.H. Hansen as a result of which Mr. Hansen has been unable to dedicate the time and energy to the Company’s business as he had previously.

 

Cost of revenues for the six months ended June 30, 2018 and 2017 was $0 versus $10,750, respectively.     Cost of revenue included payments to a related party for the six months ended June 30, 2018 and 2017, respectively. The primary reason for the decline in cost of revenue was due to health issues suffered by Flemming J.H. Hansen as a result of which Mr. Hansen has been unable to dedicate the time and energy to the Company’s business as he had previously.

 

Operating Expenses

 

Total operating expenses for the six months ended June 30, 2018 and 2017, was $29,613 versus $37,263, respectively. The decrease was primarily due to decreased professional services fees.


Liquidity and Capital Resources

 

As of June 30, 2018

 

At June 30, 2018, we had cash of $0 and a working capital deficit of $58,337.   Since inception, we have raised $35,098 in equity capital.    We had a total stockholders’ deficit of $58,337 and an accumulated deficit of $116,349 as of June 30, 2018.

 

We had $9,386 and $18,990 of cash used in operating activities for the six months ended June 30, 2018 and 2017, respectively.   These include a net loss of $31,125 and net loss of $20,950, respectively.     Cash flows provided by operating activities included changes in operating assets and liabilities totaling $21,739 and ($1,960) for the six months ended June 30, 2018 and 2017, respectively. During the six months ended June 30, 2018 and 2017, our current shareholder and MHL loaned the Company $9,386 and $14,000, 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 June 30, 2018, our cash balance was $0.  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, Flemming Hansen, has indicated that he 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.

  




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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 and income taxes. These policies require that we make estimates in the preparation of our financial statements as of a given date.

 

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.


In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts.


Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018.




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Services revenue is recognized when the professional consulting or other ancillary services are provided to the customer.

 

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.


The Company provides customers with payment terms of thirty days.

 

Item 3. 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 4. Controls and Procedures

 

Our Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining disclosure controls and procedures for the Company.

 

(a) Evaluation of Disclosure Controls and Procedures

 

Based on his evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are not effective to ensure that information required to be disclosed by us in report that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (“SECs”) rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. 

 

(b) Changes in the Company’s Internal Controls Over Financial Reporting

 

Other than described above, there have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, the Company’s internal control over financial reporting.  

 




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Part II- Other Information

 

Item 1. Legal Proceedings

 

We are not a party to any legal proceedings. Management is not aware of any legal proceedings proposed to be initiated against us. However, from time to time, we may become subject to claims and litigation generally associated with any business venture operating in the ordinary course.

 

Item 1A. Risk Factors

 

We are a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities.

 

None.

 

Item 3.

Defaults Upon Senior Securities.

 

None.

 

Item 4.

Mine Safety Disclosures.

 

Not Applicable.

 

Item 5.

Other Information.

 

None.

  

Item 6.

Exhibits.


Exhibit No.

 

Description

31.1

 

Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer

32.1

 

Section 1350 Certification of Chief Executive Officer

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema Document

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document


 




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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: August 10, 2018

By:

  /s/ Flemming J.H Hansen

 

 

Flemming J.H. Hansen

 

 

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/ Flemming J.H. Hansen

Flemming J.H. Hansen

Chief Executive Officer, Chief Accounting Officer & Chairman

August 10, 2018

 

 

 





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