0001683168-18-001428.txt : 20180516 0001683168-18-001428.hdr.sgml : 20180516 20180516142718 ACCESSION NUMBER: 0001683168-18-001428 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 37 CONFORMED PERIOD OF REPORT: 20180331 FILED AS OF DATE: 20180516 DATE AS OF CHANGE: 20180516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RC-1, Inc. CENTRAL INDEX KEY: 0001665598 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 463007571 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-210960 FILM NUMBER: 18839666 BUSINESS ADDRESS: STREET 1: PO BOX 12589 CITY: NEWPORT BEACH STATE: CA ZIP: 92658 BUSINESS PHONE: 949-721-1225 MAIL ADDRESS: STREET 1: PO BOX 12589 CITY: NEWPORT BEACH STATE: CA ZIP: 92658 10-Q 1 rc1_10q-033118.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2018

 

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

 

For the transition period from ______________ to _____________

 

Commission file number 333-210960

 

RC-1, INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada 26-1449268
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

110 Sunrise Center Drive

Thomasville, NC 27360

(Address of principal executive offices)

 

800.348.2870

(Issuer’s telephone number)

_______________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Check whether the issues (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 of the Exchange Act. (Check one)

 

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

 

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 13(a) of the Exchange Act. o

 

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

 

There were 13,929,581 shares of the registrant’s common stock, $0.001 par value per share, outstanding on May 14, 2018.

 

 

 

   
 

 

RC-1, INC.

 

TABLE OF CONTENTS

 

      Page
       
Part I – FINANCIAL INFORMATION 3
     
  Item 1. Condensed Financial Statements: 3
       
    Condensed Balance Sheets at March 31, 2018 and December 31, 2017 (unaudited) 3
       
    Condensed Statements of Operations for the three month period ended March 31, 2018 and 2017 (unaudited) 4
       
    Condensed Statements of Cash Flows for the three month period ended March 31, 2018 and 2017 (unaudited) 5
       
    Notes to Condensed Financial Statements (unaudited) 6
       
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
       
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
       
  Item 4. Controls and Procedures 16
       
Part II – OTHER INFORMATION 17
       
  Item 1.  Legal Proceedings 17
       
  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 17
       
  Item 3. Defaults Upon Senior Security 17
       
  Item 4. Mine Safety Disclosures 17
       
  Item 5. Other Information 17
       
  Item 6. Exhibits 17
       
    Signatures 18

 

 

 

 

 2 
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

RC-1, Inc.

CONDENSED BALANCE SHEETS

(UNAUDITED)

 

   March 31,   December 31, 
   2018   2017 
ASSETS          
           
Current assets          
Cash  $5,767   $60,342 
Prepaid rent, current portion   60,000    60,000 
Note receivable – related party   75,000    75,000 
Interest receivable – related party   5,645    4,145 
Total current assets   146,412    199,487 
           
Fixed assets - net   41,666    44,166 
Prepaid rent, net of current portion   45,000    60,000 
Total long-term assets   86,666    104,166 
           
Total Assets  $233,078   $303,653 
           
           
LIABILITIES & STOCKHOLDERS' DEFICIT          
           
Current liabilities          
           
Accounts payable  $48,318   $39,080 
Accrued liabilities - related party   52,889    30,464 
Due to related parties   80,164    122,164 
Accrued interest payable   31,793    29,918 
Accrued interest – related parties   110,097    107,734 
Common stock issuable   60,000    60,000 
Total current liabilities   383,261    389,360 
           
Line of credit   75,000    75,000 
Due to related parties, net of current portion   56,680    49,647 
Common stock issuable, net of current portion   60,000    60,000 
Total long-term liabilities   191,680    184,647 
           
Total Liabilities   574,941    574,007 
           
Stockholders' Deficit          
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding        
Common stock, $0.001 par value; 190,000,000 shares authorized; 13,929,581 shares issued and outstanding   1,392    1,392 
Additional paid in capital   2,877,562    2,877,562 
Accumulated deficit   (3,220,817)   (3,149,308)
Total Stockholders' Deficit   (341,863)   (270,354)
           
Total Liabilities and Stockholders' Deficit  $233,078   $303,653 

 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

 3 
 

 

RC-1, Inc.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   Three Months Ended 
   March 31,   March 31, 
   2018   2017 
Revenues          
Consulting fees  $   $50,000 
Consulting fees - related party       4,000 
        54,000 
           
Operating expenses:          
Consulting - related parties   21,533    15,000 
General and administrative   17,500    25,030 
Professional fees   29,738    12,000 
    68,771    52,030 
           
(Loss) income from operations   (68,771)   1,970 
           
Other income (expense):          
Interest expense   (1,875)   (1,875)
Interest expense – related parties   (2,363)   (9,256)
Interest income – related parties   1,500     
    (2,738)   (11,131)
           
Loss before provision for income tax   (71,509)   (9,161)
Provision for income tax        
           
Net loss  $(71,509)  $(9,161)
           
Net loss per share (Basic and fully diluted)  $(0.00)*  $(0.00)*
           
Weighted average number of common shares outstanding   13,929,581    7,874,025 

 

* denotes a loss of less than $(.01) per share.

 

The accompanying notes are an integral part of the unaudited condensed financial statements. 

 

 4 
 

 

RC-1, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Three Months Ended 
   March 31, 2018   March 31, 2017 
Cash Flows From Operating Activities:          
Net loss  $(71,509)  $(9,161)
           
Adjustments  to reconcile net loss to net cash (used in) provided by operating activities:          
Depreciation   2,500    10,000 
Non-cash rent expense   15,000    15,000 
           
Changes in operating assets and liabilities          
Increase (decrease) in accounts payable   9,238    (2,000)
Increase (decrease) in accrued liabilities – related party   22,425    (1,302)
Increase in accrued interest    1,875    1,875 
Increase in accrued interest – related parties   2,363    9,256 
Increase in accrued interest income – related party   (1,500)    
Net cash (used in) provided by operating activities   (19,608)   23,668 
           
Cash Flows From Investing Activities:        
           
Cash Flows From Financing Activities:          
Proceeds from line of credit to related parties       40,500 
Payments on line of credit to related parties   (34,967)   (84,500)
           
Net cash used for financing activities   (34,967)   (44,000)
           
Net Decrease In Cash   (54,575)   (20,332)
           
Cash At The Beginning Of The Period   60,342    49,900 
           
Cash At The End Of The Period  $5,767   $29,568 
           
           
Schedule of Non-Cash Investing And Financing Activities          
           
Stock received for sale of assets  $   $(86,667)
           
Supplemental Disclosure          
Cash paid for interest  $   $ 
Cash paid for income taxes  $   $ 

 

 

The accompanying notes are an integral part of the unaudited condensed financial statements. 

 

 5 
 

 

RC-1, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

For the Three Months Ended March 31, 2018 and 2017

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

 

RC-1, Inc. (the “Company”), was incorporated in the State of Nevada on May 14, 2009. The Company is currently considered to be in the development stage, and has generated only limited revenues from its activities in the racing business. R-Course Promotions, LLC was formed in the State of California on October 30, 2007. On June 1, 2009, in a merger classified as a transaction between parties under common control, the sole membership interest owner in R-Course Promotions, LLC exchanged 125,000 membership interests for 1,786 common shares in RC-1, Inc. Subsequent to the consummation of the merger, R-Course Promotions, LLC ceased to exist. The results of operations of RC-1, Inc. and R-Course Promotions, LLC have been combined from October 30, 2007 forward through the date of merger.

 

The Company is a motorsports marketing business focused primary in road racing events in North America utilizing NASCAR type competition equipment.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Statements

 

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2017 filed with the SEC.

  

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company has no cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits.

 

 

 

 

 6 
 

 

Property and equipment

 

Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures.

 

Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments.

 

Revenue recognition

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, effective for public business entities with annual reporting periods beginning after December 15, 2017.  This new revenue recognition standard (new guidance) has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned.

 

Net loss per share

 

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. For the three months ended March 31, 2018 and 2017 there were no potentially dilutive shares.

 

Products and services, geographic areas and major customers

 

The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments.

   

Concentrations of debt financing

 

The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 64.6 and 69.6% of the Company line of credit balances at March 31, 2018 and December 31, 2017. See Note 6 for further discussion of line of credit terms and relationships.

 

 

 

 7 
 

 

Stock based compensation

 

The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our financial statements.

 

NOTE 3. GOING CONCERN

 

These condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company’s ability to raise additional capital as required.

 

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

NOTE 4. FIXED ASSETS

 

Fixed asset values recorded at cost are as follows:

 

    March 31, 2018     December 31, 2017  
             
Race cars   $ 50,000     $ 50,000  
Less: Accumulated depreciation     (8,334 )     (5,834 )
                 
Fixed assets, net   $ 41,666     $ 44,166  

 

During 2017, the Company sold one and purchased two Racecars for stock. See Note 7.

 

Depreciation expense was $2,500 and $10,000 for the three months ended March 31, 2018 and 2017, respectively.

 

NOTE 5. LINES OF CREDIT

 

On October 15, 2012, the Company entered into a revolving line of credit agreement with TVP Investments, LLC, a Georgia Limited Liability Company in the amount up to $500,000. The line of credit is unsecured, bears interest of 10% and has a maturity date of December 31, 2019. As of March 31, 2018, and December 31, 2017, the balance of the line of credit was $75,000. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $31,793 and $29,918, respectively.

 

The Company also has a business line of credit up to $3,000 with Well Fargo bank. The line of credit is unsecured with a variable interest rate of approximately 18.0%. No amounts have been drawn on this Line.

 

 

 

 8 
 

 

NOTE 6. STOCKHOLDERS’ EQUITY

 

There are 10,000,000 shares of preferred stock authorized with a $.001 par value, of which no shares are outstanding.

 

There are 190,000,000 shares of common stock authorized with a par value of $0.001 per share, of which 13,929,581 shares are issued and outstanding.

 

In January 2017, the Company entered into a 36-month warehouse lease with Rick Ware Leasing, LLC, payable in 1,200,000 shares of the Company’s common stock (400,000 shares annually). As of December 31, 2017, 400,000 shares had been issued under this agreement. See Note 7 for equity transactions with related parties.

 

There were no issuances of preferred or common stock during the three months ended March 31, 2018.

  

NOTE 7. RELATED PARTY TRANSACTIONS 

 

Consulting expense to related parties

 

On January 1, 2015, the Company extended for three years a previous consulting agreement with General Pacific Partners, LLC a company owned and operated by the CEO and majority shareholder to provide consulting services in the motor sports marketing industry. The consulting agreement requires a $5,000 monthly fee and can be terminated by either party pursuant to a 60 day notice. During the three months ended March 31, 2018 and 2017, the Company incurred related party consulting expense of $15,000, respectively. As of March 31, 2018, and December 31, 2017, the Company had an accrued payable balance due to this related party of $45,000 and $30,000, respectively.

 

Other related party transactions

 

On March 25, 2017, the Company transferred a Ford Mustang to the shareholder from whom it was previously purchased from in exchange for 833,333 shares of common stock, which were cancelled.

 

On May 25, 2017, the Company purchased two race cars from the same shareholder in exchange for 333,333 shares of common stock. The race cars were valued at $50,000.

 

On July 1, 2017, the Company issued 400,000 shares of common stock to Rick Ware Leasing, LLC under the terms of a lease agreement for warehouse space.

 

On April 25, 2017, the Company entered into a sponsorship agreement with Dashub, Inc., a company for whom the majority shareholder serves on the board of directors. The agreement was for $81,000, of which $6,000 was paid at signing. The remaining $75,000 receivable was converted to a note bearing interest at 8% maturing in October 2018. The note can be converted into 75,000 shares of Dashub, Inc. any time prior to the maturity date. As part of the agreement, the Company received warrants to purchase 24,999 shares of Dashub, Inc. at $1.00 per share. The warrants expire April 30, 2018.

 

 

 

 

 

 

 9 
 

 

Due to related parties

 

On October 1, 2009, the Company entered into a line of credit agreement for up to $600,000 with a related party owned and operated by the CEO and majority shareholder that also provides motor sports marketing industry consulting services to the Company as needed. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. The loan bears interest at eight percent (8%) per annum. As of March 31, 2018, and December 31, 2017, the Company owed $80,164 and $122,164, respectively, to this related party. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $29,366 and $28,026, respectively.

   

On August 5, 2013, the Company entered into a line of credit agreement for up to $500,000 with a related party owned and operated by the CEO and majority shareholder. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. As of March 31, 2018, and December 31, 2017, the Company owed $56,680 and $49,647, respectively, to this related party. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $80,731 and $79,708, respectively.

 

NOTE 8. Subsequent Events

 

On April 11th, the Company acquired a SimXperience simulation rig with all applicable software to be used for driving & spotter training and for general motorsports related marketing purposes. The simulation rig was acquired for $11,100 from a consultancy firm and includes assembly and custom fabrication as needed.

 

The Dashub, Inc. warrants expired unexercised at April 30, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 10 
 

 

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

FORWARD-LOOKING STATEMENT NOTICE

 

This Form 10-Q 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-Q 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 but 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.

 

Overview

 

This section contains forward-looking statements that involve risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

The following discussion should be read in conjunction with the financial statements and notes thereto included herein.

 

We are a small auto competition and event management business that has participated primarily in NASCAR and IMSA sanctioned events.  We utilize our racecars to provide marketing and branding services to client advertisers desiring to use our racecars to market their product or service by having our vehicles carry their corporate brand. We have conducted limited operations to date.

  

Election under JOBS Act of 2012

 

The Company has chosen to opt-in and make use of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act of 2012. This election is irrevocable. If we choose to adopt any accounting standard on the public company time frame we would be required to adopt all subsequent accounting standards on the public company time frame.

 

Jumpstart Our Business Startups Act

 

In April, 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was enacted into law. The JOBS Act provides, among other things:

 

Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;

 

Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934;

 

Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings; 

 

Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.

 

In general, under the JOBS Act a company is an emerging growth company if its initial public offering ("IPO") of common equity securities was affected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of

  

(i) The completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more;

 

(ii) The completion of the fiscal year of the fifth anniversary of the company's IPO;

 

(iii) The company's issuance of more than $1 billion in nonconvertible debt in the prior three-year period; or

 

(iv) The company becoming a "larger accelerated filer" as defined under the Securities Exchange Act of 1934.

 

 

 

 11 
 

 

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.

 

Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:

 

(i) Audited financial statements required for only two fiscal years;

 

(ii) Selected financial data required for only the fiscal years that were audited;

 

(iii) Executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)

 

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.

  

The JOBS Act also exempts the Company's independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board ("PCAOB") after the date of the JOBS Act's enactment, except as otherwise required by SEC rule.

 

The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company's accounting firm or for a supplemental auditor report about the audit.

 

Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the Company's independent registered public accounting firm to file a report on the Company's internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company's internal control over financial reporting.

 

Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.

 

Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO. 

 

Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.

 

Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.

 

 

 

 

 12 
 

 

The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of the transition period and will “opt-in” and make use of the transitional period.

 

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.

 

Significant Accounting Policies

 

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note 1 of the Notes to Consolidated Financial Statements describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

 

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

  

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

 

Use of Estimates – These financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, our management has estimated the expected economic life and value of our licensed technology, our net operating loss for tax purposes and our stock, option and warrant expenses related to compensation to employees and directors, consultants and investment banks. Actual results could differ from those estimates.

  

Cash and Equivalents – We maintain our cash in bank deposit accounts, which at times, may exceed federally insured limits. We have not experienced any losses in such account.

 

Revenue Recognition – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, effective for public business entities with annual reporting periods beginning after December 15, 2017.  This new revenue recognition standard (new guidance) has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The majority of revenues are from consulting services provided at events which range from one day to one week in length. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned.

 

 

 

 

 13 
 

 

Our revenues, to date, has been derived from advertising, and from race purses. Revenue is recognized on an accrual basis as earned under contract terms. The $15,000 earned in related party revenue was part of business development and administrative services provided by the company and Mr. O’Connell.

 

Property and equipment – Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures.

 

Intangible and Long-Lived Assets – We follow FASB ASC 360-10-35 which has established a "primary asset" approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. During the period ended December 31, 2006 no impairment losses were recognized.

 

Stock Based Compensation – We recognize expenses for stock-based compensation arrangements in accordance with provisions of Accounting Standards Codification 714. Accordingly, compensation cost is recognized for the excess of the estimated fair value of the stock at the grant date over the exercise price, if any. For equity instruments issued to non-employees, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services required are completed.

  

Plan of Operations

 

RC-1, Inc. (the “Company”), was incorporated in the State of Nevada on May 14, 2009. The Company is a motorsports marketing business focused primary in road racing events in North America utilizing NASCAR type competition equipment. The Company is currently considered to be in the development stage, and has generated only limited revenues from its activities in the racing business.

 

We will continue to focus in “Road Racing” motorsports events organized by several motorsports sanctioning bodies such as The National Association for Stock Car Auto Racing ("NASCAR"), and The International Motorsports Association ("IMSA") and the Sports Car Vintage Racing Association (SVRA).

 

In addition, we intend to continue to compete in the Toyota Southwest Superlate Model Series, SVRA and the GAAS series in an effort to promote our business and brand in the western United States.

 

Going Concern

 

As of March 31, 2018, RC-1, Inc. had an accumulated deficit of $3,220,817, and a working capital deficiency of $236,849. These factors raise substantial doubt about our ability to continue as a going concern.

 

Management expects to raise $300,000 in capital through the issuance of debt and equity and believes it will be able to raise sufficient capital over the next twelve months to finance operations. However, there can be no assurances that the Company will be successful in this regard or will be able to eliminate its operating losses. The accompanying financial statements do not contain any adjustments which may be required as a result of this uncertainty.

 

Expected management estimates for the cost of operating the business through March 31, 2019 will require additional capital of up to Three Hundred Thousand dollars ($300,000) consisting of: $20,000 for registration and licenses required for entry in sanctioned racing events; $20,000 for travel and lodging; $20,000 for marketing and branding; $30,000 for legal and accounting; $15,000 for engineers and consultants; $15,000 for parts, $90,000 for engine and transmission leases. $50,000 for fuels and tires; $10,000 for racecar transporter travel; $20,000 for debt service of all Company notes payable; and $10,000 in airfare and rental cars.

 

The Company has no outstanding payments due for the lease of race cars at this time.

 

The Company intends to hold discussions with existing shareholders, new prospective shareholders and various lenders in pursuing the capital we need for the upcoming twelve months of operations. Additionally, the Company may elect to draw down additional proceeds from its line of credit with General Pacific Partners, LLC and TVP Investments, LLC, Inc. There can be no assurance that we will be able to raise any additional equity or debt capital.

 

 

 

 

 14 
 

 

The Company’s capital requirements consist of general working capital needs, scheduled principal and interest payments on debt when required, obligations, and capital expenditures. The Company’s capital resources consist primarily of cash generated from proceeds through the issuances of common stock. At December 31, 2017, the company had cash of approximately $50,000.

 

Result of Operations

 

Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 

 

Revenues

 

The Company recognized no revenue during the three months ended March 31, 2018 and $54,000 revenue for the same period in 2017. The Company did not recognize any racing event related revenue due to the fact that most of the racing events scheduled for 2018 occur after June of 2018.

 

Operating Expenses

 

For the three months ended March 31, 2018 operating expenses were $68,771 compared to $52,030 in 2017 for an increase of $16,741. The increase is due to an increase in professional fees to $29,738 from $12,000 for a difference of $17,738 which was related to year ended 2017 filings and related preparatory work.

 

Interest and Financing Costs

 

Interest was ($2,738) for the three months ended March 31, 2018 compared to ($11,131) in the three months ended March 31, 2017. The reduction in the interest expense was related directly to a reduction in the overall debt of the company.

 

Net Loss

 

The Company incurred losses of ($71,509) in the three months ended March 31, 2018 compared to ($9,161) during the three months ended March 31, 2017, due to the factors discussed above.

 

LIQUIDITY AND CAPITAL RESOURCES

 

The company had $5,767 in cash at March 31, 2018 with a working capital deficit of ($236,849). As of December 31, 2017, the Company had cash of $60,342 with a working capital deficit of ($189,873).

 

Cash Flows for the three Months Ended March 31, 2018 Compared to the Three Months Ended March 31, 2017.

 

Operating activities

 

During the three months ended March 31, 2018, we used ($19,608) in operating activities compared to $23,668 during the three months ended March 31, 2017, a decrease of ($43,276). The decrease between the two periods was largely due to an increase in accrued liabilities during the period.

 

Investing activities

 

We neither generated nor used cash flow in investing activities during the three months ended March 31, 2018 or 2017.

 

Financing activities

 

During the three months ended March 31, 2018, we used ($34,967) for financing activities compared to ($44,000) during the three months ended March 31, 2017, an increase of $9,033. During the three months ended March 31, 2018, we repaid $34,967 of advances from a related party.

 

 

 

 15 
 

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company,” we are not required to provide the information under this Item 3.

 

ITEM 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.

 

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

This quarterly report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered independent public accounting firm.

 

Changes in Internal Control Over Financial Reporting

 

No changes in our internal control over financial reporting occurred during the three months ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 16 
 

 

PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or material pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

During the three months ended March 31, 2018, there were no sale of shares of the Company's common stock.

 

ITEM 3. Default Upon Senior Securities

 

During the three months ended March 31, 2018, the Company had no senior securities issued and outstanding.

 

ITEM 4. Mine Safety Disclosures

 

Not applicable to our Company.

 

ITEM 5. Other Information

 

None.

 

ITEM 6. Exhibits

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K

 

SEC Ref. No.   Title of Document
31.1*   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of the Principal Executive Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of the Principal Financial Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL Instance Document
101.SCH*   XBRL Schema Document
101.CAL*   XBRL Calculation Linkbase Document
101.DEF*   XBRL Definition Linkbase Document
101.LAB*   XBRL Label Linkbase Document
101.PRE*   XBRL Presentation Linkbase Document

 

*   Filed herewith.

 

 

 

 

 

 

 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.

 

 

RC-1, Inc.

 

May 15, 2018

 

By: /s/ Kevin O'Connell

Kevin O'Connell

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 18 

 

EX-31.1 2 rc1_ex3101.htm CERTIFICATIONS

Exhibit 31.1

 

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

 

I, Kevin O'Connell, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of RC-1, Inc., Inc. for the three-month period ended March 31, 2018.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b) Any fraud, if material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

May 15, 2018

 

/s/ Kevin O'Connell                            

Name:  Kevin O'Connell

Its:  Chief Executive Officer (Principal Executive Officer)

 

 

  

EX-31.2 3 rc1_ex3102.htm CERTIFICATIONS

Exhibit 31.2

 

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

 

I, Rayna Austin, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of RC-1, Inc. for the three-month period ended March 31, 2018.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

May 15, 2018

 

/s/  Rayna Austin                            

Name: Rayna Austin
Its: Principal Financial Officer

 

 

EX-32.1 4 rc1_ex3201.htm CERTIFICATIONS

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of RC-1, Inc. (the “Company”) on Form 10-Q, for the three-month period ended March 31, 2018 as filed with the Securities and Exchange Commission, I, Kevin O'Connell, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 15, 2018

 

/s/   Kevin O'Connell                            

Name:  Kevin O'Connell

Its:  Chief Executive Officer (Principal Executive Officer)

 

EX-32.2 5 rc1_ex3202.htm CERTIFICATIONS

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

Regarding the Quarterly Report of RC-1, Inc. (the “Company”) on Form 10-Q, for the three-month period ended March 31, 2018 as filed with the Securities and Exchange Commission, I, Rayna Austin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 15, 2018

 

/s/   Rayna Austin                            

Name: Rayna Austin

Its: Principal Financial Officer

 

 

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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Entity Small Business Statement of Financial Position [Abstract] ASSETS Current assets Cash Prepaid rent, current portion Note receivable, related party Interest receivable - related party Total current assets Fixed assets - net Prepaid rent, net of current portion Total long-term assets Total Assets LIABILITIES & STOCKHOLDERS' DEFICIT Current liabilities Accounts payable Accrued liabilities - related party Due to related parties Accrued interest payable Accrued interest - related parties Common stock issuable Total current liabilities Line of credit Due to related parties, net of current portion Common stock issuable, net of current portion Total long-term liabilities Total Liabilities Stockholders' Deficit Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding Common stock, $.0001 par value; 190,000,000 shares authorized; 13,929,581 shares issued and outstanding Additional paid in capital Accumulated deficit Total Stockholders' Deficit Total Liabilities and Stockholders' Deficit Preferred stock, par value Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenues Consulting fees Consulting fees - related party Revenues Operating expenses: Consulting - related parties General and administrative Professional fees Total operating expenses (Loss) income from operations Other income (expense): Interest expense Interest expense - related parties Interest income - related parties Total other income (expenses) Loss before provision for taxes Provision for income tax Net income (loss) Net income (loss) per share (Basic and fully diluted) Weighted average number of common shares outstanding Statement of Cash Flows [Abstract] Cash Flows From Operating Activities: Net loss Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation Non-cash rent expense Changes in Operating Assets and Liabilities Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities - related party Increase in accrued interest - unrelated parties Increase in accrued interest - related parties Increase in accrued interest income - related party Net cash (used in) provided by operating activities Cash Flows From Investing Activities: Net cash provided by (used in) investing activities Cash Flows From Financing Activities: Proceeds from line of credit to related parties Payments on line of credit from related parties Net cash provided by (used for) financing activities Net Decrease In Cash Cash At The Beginning Of The Period Cash At The End Of The Period Schedule Of Non-Cash Investing And Financing Activities Stock received for sale of assets SUPPLEMENTAL DISCLOSURE Cash paid for interest Cash paid for income taxes Organization, Consolidation and Presentation of Financial Statements [Abstract] Organization and Description of Business Operations Accounting Policies [Abstract] Summary of Significant Accounting Policies Going Concern Property, Plant and Equipment [Abstract] Fixed Assets Debt Disclosure [Abstract] Lines of Credit Equity [Abstract] Stockholders' Equity Related Party Transactions [Abstract] Related Party Transactions Subsequent Events [Abstract] Subsequent Events Basis of presentation Interim Financial Statements Use of Estimates Cash and cash equivalents Property and equipment Financial Instruments Revenue recognition Net loss per share Products and services, geographic areas and major customers Concentrations of debt financing Stock based compensation Recent Accounting Pronouncements Schedule of fixed assets Statement [Table] Statement [Line Items] Property useful life Potentially dilutive shares Concentration risk percentage Race cars Less: Accumulated depreciation Fixed assets, net Depreciation expense Line of credit issuance date Line of credit maximum amount Line of credit interest rate Line of credit maturity date Line of credit balance Accrued interest Stock issued new, shares Stock issuable for lease Stock issued for lease agreement, shares Accounts payable - related parties Consulting to related parties Stock issued for asset purchase, shares Stock issued for asset purchase, value Proceeds from sponsorship agreement Note receivable Note receivable interest rate Note receivable maturity date Credit line maximum borrowing amount Credit line interest rate Accrued interest on line of credit Accrued interest payable - related party Common stock issuable, current portion Common stock issuable, net of current portion Increase in accrued interest - related parties Interim Financial Statements [Policy Text Block] Stock received for sale of assets Consulting fees income Stock issued for lease agreement, shares Proceeds from sponsorship agreement Note receivable maturity date Assets, Current Assets, Noncurrent Assets Liabilities, Current Liabilities, Noncurrent Liabilities Stockholders' Equity Attributable to Parent Liabilities and Equity Revenues [Default Label] Operating Expenses Operating Income (Loss) Interest Expense Interest Expense, Related Party Nonoperating Income (Expense) Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest Increase (Decrease) in Interest and Dividends Receivable Net Cash Provided by (Used in) Operating Activities Repayments of Related Party Debt Net Cash Provided by (Used in) Financing Activities Cash, Period Increase (Decrease) StockReceivedForSaleOfAssets Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment EX-101.PRE 11 rccc-20180331_pre.xml XBRL PRESENTATION FILE XML 12 R1.htm IDEA: XBRL DOCUMENT v3.8.0.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2018
May 14, 2018
Document And Entity Information    
Entity Registrant Name RC-1, Inc.  
Entity Central Index Key 0001665598  
Document Type 10-Q  
Document Period End Date Mar. 31, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   13,929,581
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2018  
Entity Small Business true  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Current assets    
Cash $ 5,767 $ 60,342
Prepaid rent, current portion 60,000 60,000
Note receivable, related party 75,000 75,000
Interest receivable - related party 5,645 4,145
Total current assets 146,412 199,487
Fixed assets - net 41,666 44,166
Prepaid rent, net of current portion 45,000 60,000
Total long-term assets 86,666 104,166
Total Assets 233,078 303,653
Current liabilities    
Accounts payable 48,318 39,080
Accrued liabilities - related party 52,889 30,464
Due to related parties 80,164 122,164
Accrued interest payable 31,793 29,918
Accrued interest - related parties 110,097 107,734
Common stock issuable 60,000 60,000
Total current liabilities 383,261 389,360
Line of credit 75,000 75,000
Due to related parties, net of current portion 56,680 49,647
Common stock issuable, net of current portion 60,000 60,000
Total long-term liabilities 191,680 184,647
Total Liabilities 574,941 574,007
Stockholders' Deficit    
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding 0 0
Common stock, $.0001 par value; 190,000,000 shares authorized; 13,929,581 shares issued and outstanding 1,392 1,392
Additional paid in capital 2,877,562 2,877,562
Accumulated deficit (3,220,817) (3,149,308)
Total Stockholders' Deficit (341,863) (270,354)
Total Liabilities and Stockholders' Deficit $ 233,078 $ 303,653
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Mar. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ .0001 $ 0.0001
Common stock, shares authorized 190,000,000 190,000,000
Common stock, shares issued 13,929,581 13,929,581
Common stock, shares outstanding 13,929,581 13,929,581
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Revenues    
Consulting fees $ 0 $ 50,000
Consulting fees - related party 0 4,000
Revenues 0 54,000
Operating expenses:    
Consulting - related parties 21,533 15,000
General and administrative 17,500 25,030
Professional fees 29,738 12,000
Total operating expenses 68,771 52,030
(Loss) income from operations (68,771) 1,970
Other income (expense):    
Interest expense (1,875) (1,875)
Interest expense - related parties (2,363) (9,256)
Interest income - related parties 1,500 0
Total other income (expenses) (2,738) (11,131)
Loss before provision for taxes (71,509) (9,161)
Provision for income tax 0 0
Net income (loss) $ (71,509) $ (9,161)
Net income (loss) per share (Basic and fully diluted) $ (0.00) $ (0.00)
Weighted average number of common shares outstanding 13,929,581 7,874,025
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Cash Flows From Operating Activities:    
Net loss $ (71,509) $ (9,161)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Depreciation 2,500 10,000
Non-cash rent expense 15,000 15,000
Changes in Operating Assets and Liabilities    
Increase (decrease) in accounts payable 9,238 (2,000)
Increase (decrease) in accrued liabilities - related party 22,425 (1,302)
Increase in accrued interest - unrelated parties 1,875 1,875
Increase in accrued interest - related parties 2,363 9,256
Increase in accrued interest income - related party (1,500) 0
Net cash (used in) provided by operating activities (19,608) 23,668
Cash Flows From Investing Activities:    
Net cash provided by (used in) investing activities 0 0
Cash Flows From Financing Activities:    
Proceeds from line of credit to related parties 0 40,500
Payments on line of credit from related parties (34,967) (84,500)
Net cash provided by (used for) financing activities (34,967) (44,000)
Net Decrease In Cash (54,575) (20,332)
Cash At The Beginning Of The Period 60,342 49,900
Cash At The End Of The Period 5,767 29,568
Schedule Of Non-Cash Investing And Financing Activities    
Stock received for sale of assets 0 (86,667)
SUPPLEMENTAL DISCLOSURE    
Cash paid for interest 0 0
Cash paid for income taxes $ 0 $ 0
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
1. Organization and Description of Business Operations
3 Months Ended
Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business Operations

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

 

RC-1, Inc. (the “Company”), was incorporated in the State of Nevada on May 14, 2009. The Company is currently considered to be in the development stage, and has generated only limited revenues from its activities in the racing business. R-Course Promotions, LLC was formed in the State of California on October 30, 2007. On June 1, 2009, in a merger classified as a transaction between parties under common control, the sole membership interest owner in R-Course Promotions, LLC exchanged 125,000 membership interests for 1,786 common shares in RC-1, Inc. Subsequent to the consummation of the merger, R-Course Promotions, LLC ceased to exist. The results of operations of RC-1, Inc. and R-Course Promotions, LLC have been combined from October 30, 2007 forward through the date of merger.

 

The Company is a motorsports marketing business focused primary in road racing events in North America utilizing NASCAR type competition equipment.

 

XML 18 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
2. Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Statements

 

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2017 filed with the SEC.

  

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company has no cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits.

 

Property and equipment

 

Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures.

 

Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments.

 

Revenue recognition

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, effective for public business entities with annual reporting periods beginning after December 15, 2017.  This new revenue recognition standard (new guidance) has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned.

 

Net loss per share

 

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. For the three months ended March 31, 2018 and 2017 there were no potentially dilutive shares.

 

Products and services, geographic areas and major customers

 

The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments.

   

Concentrations of debt financing

 

The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 64.6 and 69.6% of the Company line of credit balances at March 31, 2018 and December 31, 2017. See Note 6 for further discussion of line of credit terms and relationships.

 

Stock based compensation

 

The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our financial statements.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
3. Going Concern
3 Months Ended
Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3. GOING CONCERN

 

These condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company’s ability to raise additional capital as required.

 

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
4. Fixed Assets
3 Months Ended
Mar. 31, 2018
Property, Plant and Equipment [Abstract]  
Fixed Assets

NOTE 4. FIXED ASSETS

 

Fixed asset values recorded at cost are as follows:

 

    March 31, 2018     December 31, 2017  
             
Race cars   $ 50,000     $ 50,000  
Less: Accumulated depreciation     (8,334 )     (5,834 )
                 
Fixed assets, net   $ 41,666     $ 44,166  

 

During 2017, the Company sold one and purchased two Racecars for stock. See Note 7.

 

Depreciation expense was $2,500 and $10,000 for the three months ended March 31, 2018 and 2017, respectively.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
5. Lines of Credit
3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Lines of Credit

NOTE 5. LINES OF CREDIT

 

On October 15, 2012, the Company entered into a revolving line of credit agreement with TVP Investments, LLC, a Georgia Limited Liability Company in the amount up to $500,000. The line of credit is unsecured, bears interest of 10% and has a maturity date of December 31, 2019. As of March 31, 2018, and December 31, 2017, the balance of the line of credit was $75,000. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $31,793 and $29,918, respectively.

 

The Company also has a business line of credit up to $3,000 with Well Fargo bank. The line of credit is unsecured with a variable interest rate of approximately 18.0%. No amounts have been drawn on this Line.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
6. Stockholders' Equity
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

 

There are 10,000,000 shares of preferred stock authorized with a $.001 par value, of which no shares are outstanding.

 

There are 190,000,000 shares of common stock authorized with a par value of $.0001 per share, of which 13,929,581 shares are issued and outstanding.

 

In January 2017, the Company entered into a 36-month warehouse lease with Rick Ware Leasing, LLC, payable in 1,200,000 shares of the Company’s common stock (400,000 shares annually). As of December 31, 2017, 400,000 shares had been issued under this agreement. See Note 7 for equity transactions with related parties.

 

There were no issuances of preferred or common stock during the three months ended March 31, 2018.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
7. Related Party Transactions
3 Months Ended
Mar. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 7. RELATED PARTY TRANSACTIONS 

 

Consulting expense to related parties

 

On January 1, 2015, the Company extended for three years a previous consulting agreement with General Pacific Partners, LLC a company owned and operated by the CEO and majority shareholder to provide consulting services in the motor sports marketing industry. The consulting agreement requires a $5,000 monthly fee and can be terminated by either party pursuant to a 60 day notice. During the three months ended March 31, 2018 and 2017, the Company incurred related party consulting expense of $15,000, respectively. As of March 31, 2018, and December 31, 2017, the Company had an accrued payable balance due to this related party of $45,000 and $30,000, respectively.

 

Other related party transactions

 

On March 25, 2017, the Company transferred a Ford Mustang to the shareholder from whom it was previously purchased from in exchange for 833,333 shares of common stock, which were cancelled.

 

On May 25, 2017, the Company purchased two race cars from the same shareholder in exchange for 333,333 shares of common stock. The race cars were valued at $50,000.

 

On July 1, 2017, the Company issued 400,000 shares of common stock to Rick Ware Leasing, LLC under the terms of a lease agreement for warehouse space.

 

On April 25, 2017, the Company entered into a sponsorship agreement with Dashub, Inc., a company for whom the majority shareholder serves on the board of directors. The agreement was for $81,000, of which $6,000 was paid at signing. The remaining $75,000 receivable was converted to a note bearing interest at 8% maturing in October 2018. The note can be converted into 75,000 shares of Dashub, Inc. any time prior to the maturity date. As part of the agreement, the Company received warrants to purchase 24,999 shares of Dashub, Inc. at $1.00 per share. The warrants expire April 30, 2018.

 

Due to related parties

 

On October 1, 2009, the Company entered into a line of credit agreement for up to $600,000 with a related party owned and operated by the CEO and majority shareholder that also provides motor sports marketing industry consulting services to the Company as needed. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. The loan bears interest at eight percent (8%) per annum. As of March 31, 2018, and December 31, 2017, the Company owed $80,164 and $122,164, respectively, to this related party. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $29,366 and $28,026, respectively.

   

On August 5, 2013, the Company entered into a line of credit agreement for up to $500,000 with a related party owned and operated by the CEO and majority shareholder. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. As of March 31, 2018, and December 31, 2017, the Company owed $56,680 and $49,647, respectively, to this related party. As of March 31, 2018, and December 31, 2017, the Company had accrued interest on this line of credit in the amounts of $80,731 and $79,708, respectively.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
8. Subsequent Events
3 Months Ended
Mar. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 8. Subsequent Events

 

On April 11th, the Company acquired a SimXperience simulation rig with all applicable software to be used for driving & spotter training and for general motorsports related marketing purposes. The simulation rig was acquired for $11,100 from a consultancy firm and includes assembly and custom fabrication as needed.

 

The Dashub, Inc. warrants expired unexercised at April 30, 2018.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
2. Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Interim Financial Statements

Interim Financial Statements

 

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2017 filed with the SEC.

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company has no cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits.

Property and equipment

Property and equipment

 

Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures.

Financial Instruments

Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments.

Revenue recognition

Revenue recognition

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, effective for public business entities with annual reporting periods beginning after December 15, 2017.  This new revenue recognition standard (new guidance) has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned.

Net loss per share

Net loss per share

 

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. For the three months ended March 31, 2018 and 2017 there were no potentially dilutive shares.

Products and services, geographic areas and major customers

Products and services, geographic areas and major customers

 

The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments.

Concentrations of debt financing

Concentrations of debt financing

 

The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 64.6 and 69.6% of the Company line of credit balances at March 31, 2018 and December 31, 2017. See Note 6 for further discussion of line of credit terms and relationships.

 

Stock based compensation

Stock based compensation

 

The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our financial statements.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
4. Fixed Assets (Tables)
3 Months Ended
Mar. 31, 2018
Property, Plant and Equipment [Abstract]  
Schedule of fixed assets
    March 31, 2018     December 31, 2017  
             
Race cars   $ 50,000     $ 50,000  
Less: Accumulated depreciation     (8,334 )     (5,834 )
                 
Fixed assets, net   $ 41,666     $ 44,166  
XML 27 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
2. Summary of Significant Accounting Policies (Details Narrative) - shares
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Potentially dilutive shares 0 0
Credit Agreements [Member]    
Concentration risk percentage 64.60% 69.60%
Racecars and Equipment [Member]    
Property useful life 5 years  
Furniture and Fixtures [Member]    
Property useful life 7 years  
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
4. Fixed Assets (Details) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment [Abstract]    
Race cars $ 50,000 $ 50,000
Less: Accumulated depreciation (8,334) (5,834)
Fixed assets, net $ 41,666 $ 44,166
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
4. Fixed Assets (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 2,500 $ 10,000
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
5. Lines of Credit (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2018
Dec. 31, 2017
TVP Investments [Member]    
Line of credit issuance date Oct. 15, 2012  
Line of credit maximum amount $ 500,000  
Line of credit interest rate 10.00%  
Line of credit maturity date Dec. 31, 2019  
Line of credit balance $ 75,000 $ 75,000
Accrued interest 31,793 29,918
Wells Fargo [Member]    
Line of credit maximum amount $ 3,000  
Line of credit interest rate 18.00%  
Accrued interest $ 0 $ 0
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
6. Stockholders' Equity (Details Narrative) - shares
3 Months Ended 12 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Rick Ware Leasing [Member]    
Stock issuable for lease 1,200,000  
Stock issued for lease agreement, shares   400,000
Common Stock [Member]    
Stock issued new, shares 0  
Preferred Stock [Member]    
Stock issued new, shares 0  
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
7. Related Party Transactions (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Accounts payable - related parties $ 52,889   $ 30,464
Consulting to related parties 21,533 $ 15,000  
Related Party Credit Line [Member]      
Credit line maximum borrowing amount $ 600,000    
Credit line interest rate 8.00%    
Line of credit balance $ 80,164   122,164
Accrued interest on line of credit 29,366   28,026
Related Party Credit Line 2 [Member]      
Credit line maximum borrowing amount 500,000    
Line of credit balance 56,680   49,647
Accrued interest on line of credit 80,731   $ 79,708
Rick Ware Leasing [Member]      
Stock issued for lease agreement, shares     400,000
Dashub [Member]      
Proceeds from sponsorship agreement     $ 6,000
Note receivable interest rate     8.00%
Note receivable maturity date     Oct. 31, 2018
Purchase of Race Cars [Member]      
Stock issued for asset purchase, shares     333,333
Stock issued for asset purchase, value     $ 50,000
Consulting Agreement [Member] | CEO and Majority Shareholder [Member]      
Accounts payable - related parties 45,000   $ 30,000
Consulting to related parties $ 15,000 $ 15,000  
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