10-Q 1 f6301710qrbov1.htm FORM 10-Q Converted by EDGARwiz

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q

 

[X]

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

 

 

 

For the six months ended June 30, 2017.

                                    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

 

06824

(Address of principal executive offices)

 

(Zip Code)

 

Issuer’s telephone number: 203.635.7600


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 



1




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, smaller reporting company or an emerging growth company.    See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 if the Exchange Act.

Large accelerated filter [  ]  

Accelerated filter [  ]  

Non-accelerated filter  [  ]  

(Do not check if a smaller reporting company)

Smaller reporting company  [X]            Emerging Growth Company [  ]  

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  [X]      

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 14, 2017

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.

MANAGEMENT’S 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

10

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

10

ITEM 1A.

RISK FACTORS

11

ITEM 2.

RECENT SALE OF UNREGISTERED SECURITIES

11

ITEM 3.

EXHIBITS

11

 

 

 

SIGNATURES

 

12

  





3





PART I. Financial Information


Item 1. Interim Financial Statements.

 


Condensed Balance Sheets as of June 30, 2017 (Unaudited) and December 31, 2016

 

 

F-1

 

  

 

 

 

 

Condensed Statements of Operations for the three and six months ended June 30, 2017 and  2016

 

 

F-2

 

 

 

 

 

 

Condensed Statements of Changes in Stockholders’ (Deficit) for the six months ended June 30, 2017

 

 

F-3

 

  

 

 

 

 

Condensed Statements of Cash Flow for the six months ended June 30, 2017 and  2016

 

 

F-4

 

  

 

 

 

 

Notes to  Condensed Financial Statements

 

 

F-5

 




4





RESULTS-BASED OUTSOURCING INC

CONDENSED BALANCE SHEETS

AS OF JUNE 30, 2017 (UNAUDITED) AND DECEMBER 31, 2016


ASSETS

 

June 30, 2017

 

December 31, 2016

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

   Cash or cash equivalents

 

 $3,365

 

 $11,354

  Accounts receivable, net

 

 8,500

 

 10,500

         TOTAL CURRENT ASSETS

 

 11,865

 

21,854

 

 

 

 

 

Fixed assets, net

 

1,300

 

1,950

        TOTAL ASSETS

 

 $13,165

 

 $23,804

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

   Accounts payable and accrued expenses

 

 $14,775

 

 $16,401

   Accrued taxes

 

250

 

250

   Accrued interest

 

937

 

 -   

   Due to shareholder

 

12,250

 

 26,250

   Note payable

 

25,000

 

 -   

        TOTAL CURRENT LIABILITIES

 

53,212

 

42,901

 

 

 

 

 

        TOTAL LIABILITIES

 

53,212

 

42,901

 

 

 

 

 

   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, 2017 and December 31, 2016

 

411

 

411

   Additional paid-in capital

 

36,730

 

36,730

   Retained deficit

 

 (77,188)

 

 (56,238)

        TOTAL STOCKHOLDERS' (DEFICIT)

 

 (40,047)

 

(19,097)

        TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 $13,165

 

 $23,804



The accompanying notes to financial statements are

an integral part of these statements.



F-1





 

RESULTS-BASED OUTSOURCING INC

CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

 

 

Three Months Ended June 30, 2017

Three Months Ended June 30, 2016

 

 Six Months Ended June 30, 2017

 Six Months Ended June 30, 2016

 

 (Unaudited)

 (Unaudited)

 

 (Unaudited)

 (Unaudited)

Revenues:

 

 

 

 

 

Professional service revenues

 $15,500

 $27,000

 

 $28,000

 $130,478

Client expense reimbursement

 -   

 778

 

 -   

1,191

Total Revenues

15,500

27,778

 

 28,000

131,669

 

 

 

 

 

 

Cost of revenues

 -   

12,500

 

 -   

31,460

Cost of revenues from a related party

6,000

5,500

 

 10,750

35,650

Gross Profit

 9,500

 9,778

 

 17,250

 64,559

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Marketing and sales

892

5,017

 

 1,173

5,017

Stock based compensation

 -   

 -   

 

 -   

1,640

Depreciation

325

 325

 

 650

650

General and administrative

12,528

20,463

 

 30,940

54,948

General and administrative costs from a related party

1,500

5,500

 

 4,500

23,000

      Total operating expenses

15,245

31,305

 

 37,263

85,255

 

 

 

 

 

 

Net Loss from operations

 (5,745)

 (21,527)

 

 (20,013)

(20,696)

 

 

 

 

 

 

Other expenses

 

 

 

 

 

  Interest expense

 748

 -   

 

 937

 -   

      Total other expenses

 748

 -   

 

 937

 -   

 

 

 

 

 

 

Net Loss

 (6,493)

 (21,527)

 

 (20,950)

(20,696)

 

 

 

 

 

 

Net Loss applicable to common shareholders

 $(6,493)

 $(21,527)

 

 (20,950)

 $(20,696)

 

 

 

 

 

 

    Net loss per share - basic and diluted

($0.00)

($0.01)

 

($0.01)

($0.01)

 

 

 

 

 

 

Weighted number of shares outstanding -

 

 

 

 

    Basic and diluted

4,107,000

4,107,000

 

4,107,000

4,083,121



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, 2017


 

Preferred Stock

 

Common

 

Paid-In

Retained

Stockholders'

 

Shares

Par Value

Shares

Par Value

Capital

(Deficit)

 (Deficit)

 

 

 

 

 

 

 

 

Balance December 31, 2016

-

$

-

4,107,000

$

411

$

36,730

$

(56,238)

$

(19,097)

 

 

 

 

 

 

 

 

Net loss for period

-

-

 

 

 

(20,950)

(20,950)

 

 

 

 

 

 

 

 

Balance June 30, 2017

-

$

-

4,107,000

$

411

$

36,730

$

(77,188)

$

(40,047)



 


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

 

  



F-3





RESULTS-BASED OUTSOURCING INC

CONDENSED STATEMENTS OF CASH FLOW

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 


 

 

Six Months Ended June 30, 2017

 

Six Months Ended June 30, 2016

 

 

   

 

   

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

(20,950)

 

$

(20,696)

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

1,640 

Depreciation

 

650 

 

650 

 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

2,000 

 

(8,000)

Due to shareholder

 

(14,000)

 

13,000 

Prepaid expenses

 

 

5,000 

Accounts payable and accrued expenses

 

(1,626)

 

10,461 

Accrued interest expense

 

937 

 

Net cash (used in) provided by operating activities

 

$

(32,989)

 

$

2,055 

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from issuance of note payable

 

25,000 

 

Net cash provided by financing activities

 

$

25,000 

 

$

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(7,990)

 

2,055 

 

 

 

 

 

CASH AND CASH EQUIVALENTS at beginning of year

 

11,354 

 

4,953 

CASH AND CASH EQUIVALENTS at end of year

 

$

3,365 

 

$

7,008 

 

 

 

 

 

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 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.   


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 $77,188 and had a working capital deficit of $41,347 at June 30, 2017.   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 14, 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 June 30, 2017 or December 31, 2016.

 

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, 2017 and December 31, 2016, 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, 2017, and 2016, the Company recorded depreciation expense of $325 and $325, and $650 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 three and six month periods ended June 30, 2017 or 2016.

 

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-6





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, 2017 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, and 2016, 3 and 1 customers make up 100%, and 77%, respectively, of our gross revenue.   They represent 39%, 32% and 29% for three months ended June 30, 2017 and 77% for the three months ended June 30, 2016.  One client was the same during both periods.


For the six months ended June 30, 2017, and 2016, 3 customers make up 100%, and 71%, respectively, of our gross revenue.   They represent 38%,32% and 30% for six months ended June 30, 2017 and 49%, 11%, and 11% for the six months ended June 30, 2016.   One client was the same during both periods.


Only 1 customer was present in both periods.

 

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, 2017, and 2016, the Company recorded $0 and $0, and $0 and $1,640, respectively 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 June 30, 2017 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.

 



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, 2017, the Company recorded $748 and $937 in interest expense.


4. 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.


5. Related Party Loans and Transactions

 

William Schloth


On October 1, 2015 the Company has engaged the services of William Schloth (“WS Original 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. On April 1, 2017, the Company and Mr. Schloth agreed to make the monthly payment variable based upon client work and general administrative work performed. The Company did not owe any money to Mr. Schloth as of June 30, 2017.


The Company has reflected the above arrangement in statement of operation as related party expenses. For the three months ended June 30, 2017 and 2016 the Company paid $7,500, and $11,000, respectively. Of those amount, $6,000 and $5,500, and, $1,500 and $5,500 have been allocated to cost of revenue and general and administrative expenses, respectively. For the six months ended June 30, 2017 and 2016 the Company paid $15,250, and $58,650, respectively. Of those amount, $10,750 and $35,650, and, $4,500 and $23,000 have been allocated to cost of revenue and general and administrative expenses, respectively.  


Shareholder Loan


For the six months ended, June 30, 2017 the Company owed MLH $12,250.  The loans are non-interest bearing with no agreement in place for repayment.

 

6. Subsequent Events


In July 2017, the Company paid $8,000 back to MLH.

 



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 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.      

 



5





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, 2017 and 2016


Revenues and Cost of Revenues


Total revenue for the three months ended June 30, 2017 and 2016 was $15,500 versus $27,778, respectively. Revenues are from professional services. The decline in revenue was due to the completion of various engagements.   The Company has been transitioning its business model to focus on provided packaged services that require a fixed monthly payment, not by project.


Cost of revenues for the three months ended June 30, 2017 and 2016 was $6,000 versus $18,000, respectively.   Cost of revenue included payments to third party independent contractors plus $6,000 and $5,5000 paid to a related party for the three months ended June 30, 2017 and 2016, respectively.  The decrease in cost of revenue was due to fewer clients and the shift of the Company’s business to more of a packaged services model with smaller fees but recurring monthly payments.



7





Operating Expenses


Total operating expenses for the three months ended June 30, 2017 and 2016, was $15,145 versus $31,305, respectively.   The decrease was primarily due to decreased professional services fees.   

 

For the unaudited six-month periods ending June 30, 2017 and 2016


Revenues and Cost of Revenues


Total revenue for the six months ended June 30, 2017 and 2016 was $28,000 versus $131,669, respectively.   Revenues are from professional services.    The decline in revenue was due to the completion of various engagements.   The Company has been transition its business model to more of a package service with recurring monthly payments.


Cost of revenues for the three months ended June 30, 2017 and 2016 was $6,000 versus $18,000, respectively.   Cost of revenue included payments to third party independent contractors plus $6,000 and $5,500 paid to a related party for the three months ended June 30, 2017 and 2016, respectively.  The decrease in cost of revenue was due to fewer clients and the shift of the Company’s business to more of a packaged services model with smaller fees but recurring monthly payments.


Operating Expenses


Total operating expenses for the three months ended June 30, 2017 and 2016, was $15,245 versus $31,305, respectively.   The decrease was primarily due to decreased professional services fees.   

 

For the unaudited six-month periods ending June 30, 2017 and 2016


Revenues and Cost of Revenues


Total revenue for the six months ended June 30, 2017 and 2016 was $28,000 versus $131,669, respectively.   Revenues are from professional services.    The decline in revenue was due to the completion of various engagements.   The Company has been transitioning its business model to focus on packaged services that require a fixed recurring monthly payment not by project.


Cost of revenues for the six months ended June 30, 2017 and 2016 was $10,750 versus $67,110, respectively.   Cost of revenue included payments to third party independent contractors plus $10,750 and $35,650 paid to a related party for the six months ended June 30, 2017 and 2016, respectively.  The decrease in cost of revenue was due to fewer clients and the shift of the Company’s business to more of a packaged services model with smaller fees but recurring monthly payments.


Operating Expenses


Total operating expenses for the six months ended June 30, 2017 and 2016, was $37,263 versus $85,255, respectively.   The decrease was primarily due to decreased professional services fees.   For the six months ended June 30, 2017 and 2016 the Company recorded stock-based compensation of $0 and $1,640, respectively.


Liquidity and Capital Resources

 

As of June 30, 2017

 

At June 30, 2017, we had cash of $3,365 and a working capital deficit of $41,347.   Since inception, we have raised $35,500 in equity capital. We had a total stockholders’ deficit of $40,047 and an accumulated deficit of $77.188 as of June 30, 2017.

 

We had $32,989 of cash used in, and $2,055 of cash provided by operating activities for the six months ended June 30, 2017 and 2016, respectively.   These include a net loss of $20,950 and net loss of $20,696, respectively. Cash flows (used in) provided by operating activities included changes in operating assets and liabilities totaling ($12,689) and $20,461 for the six months ended June 30, 2017 and 2016, respectively.    During the six months ended June 30, 2017, the Company repaid MLH $14,000.



8





On March 8, 2017, we executed a promissory note for $25,000.  

  

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.

 

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 then existing directors, are approved by vote of the stockholders, or are fair to us as a corporation as time approved or ratified by the board or an officer.   We will conduct an appropriate review of all related party transactions on an ongoing basis, and, where appropriate, we review the potential of conflicts of interest.

 

Off-balance sheet arrangements

 

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.


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.

 



9





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.   






Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K

 

Item 4. Controls and Procedures


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

 

(a) Evaluation of Disclosure Controls and Procedures

 

Based on their 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 have 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.  


Item 5. Other

 

None

 

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.

 



10





Item 1A. Risk Factors

 

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K

 

Item 2. Recent Sale of Unregistered Securities


None.


Item 3.   Exhibits

 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



11





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 14, 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

Mary Ellen Schloth





Chief Executive Officer, Chief Accounting Officer & Chairman



August 14, 2017



 

 










































































































































































































































































































































































12