10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2016

OR

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

For the transition period from         to         

Commission file number 000-54427

FIRST RATE STAFFING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	46-0708635
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

2775 West Thomas Road

Suite 107

Phoenix, Arizona 85018

(Address of principal executive offices) (zip code)

602-442-5277

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer  ¨	Accelerated filer	¨
Non-accelerated filer    ¨	Smaller reporting company	x
(do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

Class	Outstanding at May 16, 2016
Common Stock, par value $0.0001	7,500,000 shares

FIRST RATE STAFFING CORPORATION

Table of Contents		Page
PART I — FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Balance Sheets at March 31, 2016 (Unaudited) and December 31, 2015	3
	Statements of Operations (Unaudited) — Three Months Ended March 31, 2016 and 2015	4
	Statements of Cash Flows (Unaudited) — Three Months Ended March 31, 2016 and 2015	5
	Notes to Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II — OTHER INFORMATION		18
Item 1.	Legal Proceedings	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Signatures		19
Exhibit Index

2

PART I

ITEM 1. FINANCIAL STATEMENTS

FIRST RATE STAFFING CORPORATION

BALANCE SHEETS 

	March 31,			December 31,
	2016			2015
	(Unaudited)
Assets
Current assets
Cash	$	534,705		$	565,040
Accounts receivable, net		454,351			733,009
Total current assets		989,056			1,298,049
Property and equipment, net		49,864			53,309
Intangible assets, net		249,812			272,522
Notes receivable - related party		98,918			98,918
Deposit and other assets		7,640			7,640
Total assets	$	1,395,290		$	1,730,438
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	77,056		$	355,452
Accrued expenses		745,355			780,863
Car loan payable, current portion		4,832			4,623
Notes payable - current portion, net of discount		109,272			107,786
Total current liabilities		936,515			1,248,724
Car loan payable, net of current portion		30,358			31,605
Notes payable, net of current portion		100,000			130,000
Total liabilities		1,066,873			1,410,329
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, zero shares issued and outstanding		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized, 7,500,000 shares issued and authorized at March 31, 2016 (unaudited) and December 31, 2015		750			750
Additional paid-in capital		1,089,802			1,089,802
Accumulated deficit		(762,135	)		(770,443	)
Total stockholders' equity		328,417			320,109
Total liabilities and stockholders' equity	$	1,395,290		$	1,730,438

The accompanying notes are an integral part of these financial statements

3

FIRST RATE STAFFING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,			March 31,
	2016			2015
Revenues	$	6,957,448		$	4,906,244
Cost of revenues		6,125,618			4,523,813
Gross profit		831,830			382,431
General and administrative expenses		749,176			469,836
Income (loss) from operations		82,654			(87,405	)
Interest and other expense, net		(74,346	)		(49,513	)
Income (loss) before income tax		8,308			(136,918	)
Income tax expense		-			-
Net income (loss)	$	8,308		$	(136,918	)
Net income (loss) per share:
Basic and diluted	$	-		$	(0.02	)
Weighted average shares outstanding:
Basic and diluted		7,500,000			7,500,000

The accompanying notes are an integral part of these financial statements

4

FIRST RATE STAFFING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Operating activities
Net income (loss)	$	8,308		$	(136,918	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization loss		26,155			74,959
Provision for bad debt		45,248			30,127
Amortization of discount on note payable		1,486			8,491
Changes in operating assets and liabilities:
Accounts receivable		233,410			(60,583	)
Deposits and other assets		-			(4,440	)
Accounts payable		(278,396	)		(124,208	)
Accrued expenses		(35,508	)		72,930
Net cash provided by (used in) operating activities		703			(139,642	)
Investing activities
Notes receivable - related party borrowing		-			(25,030	)
Net cash used in investing activities		-			(25,030	)
Financing activities
Payments on note payable		(30,000	)		-
Payments on car loan payable		(1,038	)		-
Proceeds from (payment on) note payable - related party, net		-			2,154
Net cash provided by (used in) financing activities		(31,038	)		2,154
Net decrease in cash		(30,335	)		(162,518	)
Cash, beginning of the year		565,040			787,238
Cash, end of year	$	534,705		$	624,720
Supplemental disclosure of cash flow information:
Interest paid	$	2,965		$	554
Income taxes paid	$	-		$	-

The accompanying notes are an integral part of these financial statements

5

FIRST RATE STAFFING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND BUSINESS

First Rate Staffing Corporation (“First Rate” or “the Company”), formerly known as Moosewood Acquisition Corporation (“Moosewood”) was incorporated on April 20, 2011 under the laws of the State of Delaware.

The Company provides recruiting and staffing services for temporary positions in the light industrial, distribution center, assembly, and clerical areas to its clients in California and Arizona, with an option for the clients and candidates to choose the most beneficial working arrangements.

2. BASIS OF PRESENTATION

The accompanying consolidated balance sheet as of December 31, 2015, which has been derived from the Company’s audited financial statements as of that date, and the unaudited consolidated financial information of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015, has been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company’s financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the entire year.

Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on March 30, 2016.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

Use of Estimates

In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash

The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2016 and December 31, 2015. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company has not experienced any losses related to this concentration of risk. As of March 31, 2016, the Company had $284,705 of balances that exceeded the FDIC insurance limits.

6

Accounts Receivable and Factoring

Accounts receivable are carried at the original amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The allowance for doubtful accounts was $29,824 as of March 31, 2016 (unaudited) and December 31, 2015.

The Company entered into an accounts receivable factoring arrangement with a non-related third party financial institution (the “Factor”). Pursuant to the terms of the arrangement, the Company, from time to time, shall sell to the Factor certain of its accounts receivable balances on a recourse basis for credit approved accounts. The Factor remits 90% of the accounts receivable balance to the Company, with the remaining balance, less fees, to be forwarded to the Company once the Factor collects the full accounts receivable balance from the customer. An administrative fee of 0.015% per diem is charged on the gross amount of accounts receivables assigned to Factor, plus interest to be calculated at 0.011806% per day. The total amount of accounts receivable factored was $2,401,839 (unaudited) and $4,180,834 at March 31, 2016 and December 31, 2015, respectively.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1 — Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

– Quoted prices for similar assets or liabilities in active markets

– Quoted prices for identical or similar assets or liabilities in markets that are not active

– Inputs other than quoted prices that are observable for the asset or liability

– Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 — Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). The Company did not measure any financial instruments on a recurring basis using significantly unobservable inputs (Level 3) as of March 31, 2016.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Historically, the Company has not experienced any losses on deposits.

The Company’s policy is to maintain an allowance for doubtful accounts, if any, for estimated losses resulting from the inability of its customer to pay. However, if the financial condition of the Company’s customers were to deteriorate rapidly, resulting in nonpayment, the Company could be required to provide for additional allowances, which would decrease operating income in the period that such determination was made.

7

Property and Equipment

Property and equipment is presented at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Betterments, renewals, and extraordinary repairs that extend the life of the assets are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation and amortization applicable to retired assets are removed from the Company’s accounts, and the gain or loss on dispositions, if any, is recognized in the consolidated statements of operations

Equipment are recorded at cost and depreciated using the straight-line method over an estimated useful life of 5 years.

Intangible Assets

The Company has intangible assets recorded as part of a business acquisition (see Note 6). Intangible assets with definite useful lives, representing customer relationships, are being amortized over their remaining estimated useful lives of 3 years using the straight-line method, which represents the economic benefit pattern of the intangible assets.

Impairment of Long-Lived Assets

Long-lived assets, including intangibles, are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable. The evaluation requires that assets be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to their estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. The Company’s management currently believes there is no impairment of its long-lived assets as of March 31, 2016 and December 31, 2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s business model will continue. Either of these could result in future impairment of long-lived assets.

Revenue Recognition

The Company’s revenue is derived from providing temporary staffing services to its clients. The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

The Company recognizes its revenue from temporary staffing services on a gross basis in accordance with the guidance in FASB ASC 605-45 which outlines various factors or indicators that assist in determining whether revenue should be recognized on a gross or a net basis. In connection with this guidance, the Company believes the gross basis is appropriate, as the Company is the primary obligor in its arrangements and is responsible for fulfilling the services being provided to the individual customers and for compensating the individual service providers, regardless of whether the customer accepts the work.

Cost of Revenue

Cost of revenue consists of wages, related payroll taxes, workers compensation, and employee benefits of the Company’s employees while they work on contract assignment as temporary staff of the Company’s customers.

8

Net Income (Loss) Per Share

Basic income per share is computed by dividing the net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted income per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock.  The Company had no common stock equivalents outstanding for the three months ended March 31, 2016 and 2015.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The likelihood of realizing the tax benefits related to a potential deferred tax asset is evaluated, and a valuation allowance is recognized to reduce that deferred tax asset if it is more likely than not that all or some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are calculated at the beginning and end of the year; the change in the sum of the deferred tax asset, valuation allowance and deferred tax liability during the year generally is recognized as a deferred tax expense or benefit. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company evaluates the accounting for uncertainty in income tax recognized in its financial statements and determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit is recorded in its financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not accrued for any such uncertain tax positions as of March 31, 2016 or December 31, 2015.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

4. GOING CONCERN

The Company has an accumulated deficit of $762,135 since inception. This accumulated deficit is primarily the result of increased operating expenses associated with professional fees necessary to complete its merger transaction and continue as a public company, as well as revenues historically being at below break-even levels. Going forward, the Company expects these annual expenses to be lower. On February 11, 2014, the Company also acquired the customer list of Loyalty Staffing Services, Inc. (see Note 6), which is expected to increase cash flows from operations. Management believes this will allow the Company to operate at profitable level in the future.

The Company anticipates that it will require approximately $700,000 to $1.0 million to establish and fund its factoring facility. These amounts would be used to fund payroll and taxes up to the point that these amounts are collect from the client. Factoring internally would mean self-financing, resulting in a savings to the Company. No additional material or regulatory costs would be incurred at this point. Once the factoring entity is successfully set-up, the Company expects to realize ongoing savings from the reduced factoring costs.

The Company’s continuation as a going concern is dependent on management’s ability to develop profitable operations, and / or obtain additional financing from its shareholders and / or other third parties. In order to address the need to satisfy its continuing obligations and realize its long term strategy, management’s plans include continuing to fund operations with cash received from financing activities.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

9

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Furniture and equipment	$	5,658	$	5,658
Vehicles		63,612		63,612
		69,270		69,270
Less: accumulated depreciation		19,406		15,961
	$	49,864	$	53,309

Depreciation expense for the three months ended March 31, 2016 and 2015 amounted to $3,445 and $1,665, respectively.

6. ACQUISITION

On February 11, 2014, the Company entered into an agreement to purchase the customer list of Loyalty Staffing Services, Inc. (“Loyalty”), a California corporation, for an aggregate purchase price of $1,444,363 consisting of a cash payment of $100,000, along with a $400,000 note payable, net of a discount of $55,637 for imputed interest, and 500,000 shares issued of the Company’s common stock, valued at the estimated fair value of $2 per share. The total amount due of $500,000 was payable as follows; 1) $50,000 of the purchase price would be paid within five days of the release of certain Uniform Commercial Code liens and personal guarantees, 2) an additional $50,000 would be paid sixty days from the date of such release, 3) the Company executed a promissory note to the seller for $400,000, payable in four installments of $75,000 every six months after the closing date of the agreement, with a remaining and final payment of $100,000 payable 30 months after the closing date.

The Company was in dispute with the seller of Loyalty, Nancy Esteban, concerning the terms of the cash portion and note payable portion of the payout in the original transaction described above. The Company reached a settlement with Ms. Esteban on June 24, 2015. In connection with the settlement agreement, the parties agreed to reduce the total note payable portion of the purchase price from $500,000 to $425,000. Per the terms of the settlement agreement, the aggregate amount due of $425,000 is payable as follows; $125,000 is due upon signing of the agreement, and the remaining $300,000 is payable in 30 monthly installments of $10,000 starting in August 2015 through February 2018. The remaining balance due of this note payable amounted to $220,000 as of March 31, 2016 (see Note 9).

Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets were based on valuations using the income approach.

The purchase price allocation was allocated as follows:

Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value

Intangible assets	$	1,465,867
Accounts payable		(21,504	)
	$	1,444,363

10

Intangible assets acquired represented customer relationships which had an estimated useful life of 5 years. During the year ended December 31, 2015, the Company recorded an impairment charge of $640,733 to write down the carrying value of the intangible assets to their estimated fair value. The adjusted carrying amount of the intangible assets after the impairment loss is being amortized over a remaining estimated useful life of 3 years.

Amortization expense for intangible assets for the three months ended March 31, 2016 and 2015 amounted to $22,710 and $73,294, respectively. Estimated future amortization of intangible assets, after taking into account the impairment loss of $640,733 described above, is as follows.

Year Ended
December 31,
2016 (remainder of)	$	68,131
2017		90,841
2018		90,840
	$	249,812

7. ACCRUED EXPENSES

Accrued expenses consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Accrued payroll expenses	$	532,740	$	590,411
Other accrued operating expenses		207,219		185,056
Accrued interest		5,396		5,396
	$	745,355	$	780,863

8. NOTES RECEIVABLE – RELATED PARTY

The Company issued a series of unsecured notes receivables due from an officer of the Company totaling $98,918 as of March 31, 2016 and December 31, 2015. Of the outstanding borrowings at March 31, 2016, $38,500 of the amounts bear interest at 6% per annum, and the remainder of the amounts are non-interest bearing. The amounts are due in 2018 at the following due dates; $33,418 is due March 31, 2018, $19,500 is due June 30, 2018, $7,500 is due September 30, 2018 and $38,500 is due December 31, 2018. 

11

9. NOTES PAYABLE – ACQUISITION

Notes payable resulting from the acquisition of Loyalty consisted of the following.

	March 31,			December 31,
	2016			2015
	(Unaudited)
Settment Agreement Payable to seller - Payable in 30 monthly installments of $10,000 beginning August 15, 2015 through January 15, 2018. The amounts are non-interest bearing.	$	220,000		$	250,000
	$	220,000		$	250,000
Discount on notes payable		(10,728	)		(12,214	)
Notes payable, net	$	209,272		$	237,786
Less: current portion of notes payable		109,272			107,786
Notes payable, net of current portion	$	100,000		$	130,000

Expected future maturity of long-term debt is as follows for each of the years ended December 31.

Year Ended
December 31,
2016 (remainder of)	$	90,000
2017		120,000
2018		10,000
	$	220,000

12

As the note payable from the acquisition of Loyalty has no stated interest, the Company has imputed total interest of $55,637 using a rate of 10% per annum, which represents the Company’s incremental borrowing rate for similar transactions. The discount is being amortized into interest expense using the interest method. During the three months ended March 31, 2016 and 2015, amortization of the discount amounted to $1,486 and $8,491, respectively. As of March 31, 2016, the note payable is presented net of a discount of $10,728.

10. CAR LOAN PAYABLE

In August 2015, the Company purchased a vehicle for business purposes for an aggregate price of $49,612. The Company financed $37,612 of the amount over 72 months at an interest rate of 13%. The balance outstanding as of March 31, 2016 amounted to $35,190.

Expected future maturity of the car loan payable is as follows for each of the years ended December 31.

	Year Ended
	December 31,
2016 (remainder of)	$	3,585
2017		5,242
2018		5,972
2019		6,804
2020		7,751
Thereafter		5,836
Total	$	35,190

11. COMMITMENTS

Leases

The Company leases its office locations located in Torrance, California and Phoenix, Arizona under operating leases on a month-to-month basis at monthly rates ranging from $737 to $3,211. The Company leases its offices located in Santa Fe Springs, California and Ontario, California under a non-cancellable operating leases extending through March 2018.

The following summarizes the amounts due in future periods under non-cancellable operating leases.

	Year Ended
	December 31,
2016 (remainder of)	$	23,364
2017		31,152
2018		5,476
Total	$	59,992

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our” or “the Company” refers to the business of First Rate Staffing Corporation.

The following discussion should be read together with the information contained in the unaudited consolidated financial statements and related notes included in Item 1, “Financial Statements,” in this Form 10-Q.

Overview

First Rate Staffing Corporation (“First Rate” or “the Company”), formerly known as Moosewood Acquisition Corporation (“Moosewood”) was incorporated on April 20, 2011 under the laws of the State of Delaware.

The Company provides recruiting and staffing services for temporary positions in the light industrial, distribution center, assembly, and clerical areas to its clients in California and Arizona, with an option for the clients and candidates to choose the most beneficial working arrangements.

The Company’s independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. Unless the Company is able to generate sufficient cash flow from operations and/or obtain additional financing, there is a substantial doubt as to the ability of the company to continue as a going concern.

On February 11, 2014, the Company entered into an agreement to purchase the customer list of Loyalty Staffing Services (“Loyalty”), a California corporation.

Critical Accounting Policies

For a summary of our critical accounting policies, refer to Note 3 of our unaudited financial statements included under Item 1 – Financial Statements in this Form 10-Q.

14

Results of Operations for the Three Months Ended March 31, 2016 as Compared to the Three Months Ended March 31, 2015.

The following is a comparison of the consolidated results of operations for the Company for the three months ended March 31, 2016 and 2015.

	Three Months Ended
	March 31,			March 31,
	2016			2015			$ Change			% Change
Revenues	$	6,957,448		$	4,906,244		$	2,051,204			41.8	%
Cost of revenues		6,125,618			4,523,813			1,601,805			35.4	%
Gross profit		831,830			382,431			449,399			117.5	%
General and administrative expenses		749,176			469,836			279,340			59.5	%
Income (loss) from operations		82,654			(87,405	)		170,059			-194.6	%
Interest and other expense, net		(74,346	)		(49,513	)		(24,833	)		50.2	%
Loss before income tax		8,308			(136,918	)		145,226			-106.1	%
Income tax expense		-			-			-			0.0	%
Net income (loss)	$	8,308		$	(136,918	)	$	145,226			-106.1	%

Revenues

Our revenues increased by $2,051,204, or 41.8%, during the quarter ended March 31, 2016 as compared to the same period in 2015. The increase in revenues is due primarily to additional clients picked up towards the end of the quarter ended March 31, 2015. These new clients have continued to provide for additional revenue for the entire quarter ended March 31, 2016.

Cost of revenues

Our cost of revenues, which represent primarily staffing salaries and workers compensation insurance costs, increased by $1,601,805, or 35.4%, during the quarter ended March 31, 2016 as compared to the same period in 2015. The increase in cost of revenues is due to the increase in revenues for the period. The percentage increase in cost of revenues was lower than the percentage increase in revenues due to higher state and federal unemployment tax expenses for our staffing employees in 2015 as compared to the same period in 2016. We expect the cost of revenues to continue to increase as our revenues increase.

Operating expenses

Operating expenses increased by $279,340, or 59.5%, during the quarter ended March 31, 2016 as compared to the same period in 2015. The increase in operating expenses in 2016 was due primarily to increased payroll costs associated with additional headcount added to manage the increase in our volume.

Interest and Other Expenses

Interest and other expenses during the quarter ended March 31, 2016 included $74,346 of interest expense as compared to $49,513 compared to the same period in 2015. Interest expense was higher during the quarter ended March 31, 2016 primarily due to an increase in accounts receivables factored during the period.

Promissory Notes

The Company owes an aggregate total of $220,000 to the seller of Loyalty, which is non-interest bearing and due in 30 monthly payment installments of $10,000 commencing August 2015 through January 2018.

The Company has a loan payable outstanding for the purchase of a vehicle. The balance outstanding as of March 31, 2016 amounted to $35,190, which is payable in monthly installments of $756 at an interest rate of 13% per annum over 72 months through August 2021.

15

Capital Resources

As of March 31, 2016, we had cash of $534,705 and accounts receivable of $454,351. Our current assets of $989,056 were higher than our current liabilities of $936,515 by $52,541.

The Company’s proposed expansion plans and business process improvements over the next two years will necessitate additional capital and financing. Accordingly, the Company plans to raise between $2 million and $4 million of outside funding in the next year, for the purposes of funding its own accounts receivable factoring company, establishing and operating its own worker’s compensation captive unit, and acquiring competitors and complementary service providers in its sector. Of this amount, the Company expects that it will need funding of $1.0 million to $1.5 million to achieve its expanded growth and profit objectives in its existing core business over the next two years.

The Company anticipates that it will require approximately $700,000 to $1.0 million to establish and fund its factoring facility. These amounts would be used to fund payroll and taxes up to the point that these amounts are collect from the client. Factoring internally would mean self-financing, resulting in a savings to the Company. No additional material or regulatory costs would be incurred at this point. If the Company were to offer factoring to other entities (i.e. outside of the Company) then Company would be subject to all the rules and regulations surrounding the operations of a finance company. Once the factoring entity is successfully set-up, the Company expects to realize ongoing savings from the reduced factoring costs.

The Company expects that establishing and funding its workers’ compensation captive will separately require funding of approximately $500,000 to $1.0 million, which will include a substantial deposit to establish the captive as a self-insured funding unit. The costs include a deposit needed of $500,000 or more, set-up costs of $50,000 to $60,000, and administrative fees of approximately $15,000 to $20,000 per year. Legal requirements for the formation of a captive vary by state. Currently, Hawaii and Nevada offer the most favorable requirements for establishing a captive for the Company. Any captive would still require catastrophic coverage beyond the normal coverage provided by the captive. There are numerous companies which provide direction and assistance for establishing a captive, and the Company would plan to engage such an advisory company. These companies are primarily responsible for ensuring that the captive meets the regulatory requirements initially and annually in the applicable state of formation. These advisors also assist in risk assessment, legal deposit requirements and claims administration. An impact on the Company’s current business from the captive would be the ability to retain the large deposit amounts required by insurance providers to remain in the control of the Company. As with the factoring entity, once the workers’ compensation captive is successfully set-up, the Company expects to realize ongoing savings from the reduced workers’ compensation costs.

There can be no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its contemplated business plans and operations (including its goals of establishing a factoring entity and workers’ compensation captive) unless it obtains additional financing or otherwise is able to generate sufficient revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans.

The Company anticipates it will develop a budget for marketing activities consisting of two levels of marketing: client marketing and acquisition marketing. Client marketing costs are associated with sales staff with the single purpose to market to current and potential clients. Acquisition marketing costs are those incurred for investor relations, traveling, expenses for client acquisitions, and case by case joint marketing material for specific acquisitions as they occur.

Liquidity

To date, the Company has not suffered from a significant liquidity issue. The main liquidity issue was addressed when the Company entered into new factoring agreements that went into effect September 1, 2012 with TAB Bank, which provided for a $1,000,000 factor commitment. In addition, the Company may borrow from time to time as available, sources of funds from its officers and/or directors as needed

16

As the Company grows in size, the savings from this new factoring arrangement will continue to accrue and enhance the Company’s profitability and cash flow. Based on this budget and the projected operations of the Company, there are no currently anticipated liquidity issues which would pose a threat to the current business and operations of the Company.

Net cash provided by operating activities was $703 for the three months ended March 31, 2016 compared to net cash used in operating activities of ($139,642) for the same period in 2015. The significant change between the periods was primarily the result of our net income during the three months ended March 31, 2016 being $8,308, as compared to a net loss of $136,918 during the same period in 2015.

Net cash used in investing activities during the three months ended March 31, 2016 was $0, compared to $25,030 during the same period in 2015 which represented payments for borrowings on related party notes receivable.

We had net cash used in financing activities of $31,038 during the three months ended March 31, 2016 resulting from the payments of $30,000 for the note payable due to the seller of Loyalty and $1,038 from the payment of our car loan payable. Cash provided by financing activities during the three months ended March 31, 2015 were $2,154, which represented payments on notes payables to related parties.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information not required to be filed by Smaller Reporting Companies.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of March 31, 2016, the end of the period covered by this Quarterly Report on Form 10-Q under the supervision and with the participation of the Company’s principal executive officer and principal financial and accounting officer. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, they believe that the Company’s disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. Both officers are directly involved in the day-to-day operations of the Company.

The Company is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with the Rule 13a-15 of the Securities Exchange Act of 1934. The Company’s president and its principal financial and accounting officer conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2016, based on the criteria establish in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of March 31, 2016, based on those criteria. A control system can provide only reasonably, not absolute, assurance that the objectives of the control system are met and no evaluation of controls can provide absolute assurance that all control issues have been detected.

Changes in Internal Control Over Financial Reporting

The Company has not made any changes during its fiscal quarter that materially affect, or are reasonably likely to materially affect, its internal control over financial reporting.

17

PART II

ITEM 1. LEGAL PROCEEDINGS

There are no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) Not applicable.

(b) Item 407(c)(3) of Regulation S-K:

During the quarter covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

ITEM 6. EXHIBITS

Exhibit Number	Exhibit Title
31	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase
*	Filed herewith

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FIRST RATE STAFFING CORPORATION
By:	/s/ Cliff Blake
President and Principal executive officer
Principal financial officer

Dated: May 16, 2016

19

EX-31

EXHIBIT 31

CERTIFICATION PURSUANT TO SECTION 302

I, Cliff Blake, certify that:

1. I have reviewed this Form 10-Q of First Rate Staffing Corporation

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 evaluations; 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; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of 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.

Date: May 16, 2016

/s/ Cliff Blake  

President and Principal executive officer

Principle Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO SECTION 906

Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned officer of First Rate Staffing Corporation (the "Company"), hereby certify to my knowledge that:

The Report on Form 10-Q for the period ended March 31, 2016 of the Company fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Cliff Blake  

President and Principal executive officer
Principle Financial Officer  

Date: May 16, 2016

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 16, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Registrant Name	FIRST RATE STAFFING Corp
Entity Central Index Key	0001522215
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	FRSI
Entity Common Stock, Shares Outstanding		7,500,000

XML

BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current assets
Cash	$ 534,705	$ 565,040
Accounts receivable, net	454,351	733,009
Total current assets	989,056	1,298,049
Property and equipment, net	49,864	53,309
Intangible assets, net	249,812	272,522
Notes receivable - related party	98,918	98,918
Deposit and other assets	7,640	7,640
Total assets	1,395,290	1,730,438
Current liabilities
Accounts payable	77,056	355,452
Accrued expenses	745,355	780,863
Car loan payable, current portion	4,832	4,623
Notes payable - current portion, net of discount	109,272	107,786
Total current liabilities	936,515	1,248,724
Car loan payable, net of current portion	30,358	31,605
Notes payable, net of current portion	100,000	130,000
Total liabilities	$ 1,066,873	$ 1,410,329
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, zero shares issued and outstanding	$ 0	$ 0
Common stock, $0.0001 par value, 100,000,000 shares authorized, 7,500,000 shares issued and authorized at March 31, 2016 (unaudited) and December 31, 2015	750	750
Additional paid-in capital	1,089,802	1,089,802
Accumulated deficit	(762,135)	(770,443)
Total stockholders' equity	328,417	320,109
Total liabilities and stockholders' equity	$ 1,395,290	$ 1,730,438

XML

BALANCE SHEETS [Parenthetical] - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	20,000,000	20,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	7,500,000	7,500,000
Common Stock, Shares, Outstanding	7,500,000	7,500,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues	$ 6,957,448	$ 4,906,244
Cost of revenues	6,125,618	4,523,813
Gross profit	831,830	382,431
General and administrative expenses	749,176	469,836
Income (loss) from operations	82,654	(87,405)
Interest and other expense, net	(74,346)	(49,513)
Income (loss) before income tax	8,308	(136,918)
Income tax expense	0	0
Net income (loss)	$ 8,308	$ (136,918)
Net income (loss) per share:
Basic and diluted (in dollars per share)	$ 0	$ (0.02)
Weighted average shares outstanding:
Basic and diluted (in shares)	7,500,000	7,500,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net income (loss)	$ 8,308	$ (136,918)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization loss	26,155	74,959
Provision for bad debt	45,248	30,127
Amortization of discount on note payable	1,486	8,491
Changes in operating assets and liabilities:
Accounts receivable	233,410	(60,583)
Deposits and other assets	0	(4,440)
Accounts payable	(278,396)	(124,208)
Accrued expenses	(35,508)	72,930
Net cash provided by (used in) operating activities	703	(139,642)
Investing activities
Notes receivable - related party borrowing	0	(25,030)
Net cash used in investing activities	0	(25,030)
Financing activities
Payments on note payable	(30,000)	0
Payments on car loan payable	(1,038)	0
Proceeds from (payment on) note payable - related party, net	0	2,154
Net cash provided by (used in) financing activities	(31,038)	2,154
Net decrease in cash	(30,335)	(162,518)
Cash, beginning of the year	565,040	787,238
Cash, end of year	534,705	624,720
Supplemental disclosure of cash flow information:
Interest paid	2,965	554
Income taxes paid	$ 0	$ 0

XML

ORGANIZATION AND BUSINESS

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. ORGANIZATION AND BUSINESS

First Rate Staffing Corporation (“First Rate” or “the Company”), formerly known as Moosewood Acquisition Corporation (“Moosewood”) was incorporated on April 20, 2011 under the laws of the State of Delaware.

The Company provides recruiting and staffing services for temporary positions in the light industrial, distribution center, assembly, and clerical areas to its clients in California and Arizona, with an option for the clients and candidates to choose the most beneficial working arrangements.

XML

BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

2. BASIS OF PRESENTATION

The accompanying consolidated balance sheet as of December 31, 2015, which has been derived from the Company’s audited financial statements as of that date, and the unaudited consolidated financial information of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015, has been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company’s financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the entire year.

Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission (“SEC”). These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on March 30, 2016.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

Use of Estimates

In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash

The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2016 and December 31, 2015. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company has not experienced any losses related to this concentration of risk. As of March 31, 2016, the Company had $284,705 of balances that exceeded the FDIC insurance limits.

Accounts Receivable and Factoring

Accounts receivable are carried at the original amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The allowance for doubtful accounts was $29,824 as of March 31, 2016 (unaudited) and December 31, 2015.

The Company entered into an accounts receivable factoring arrangement with a non-related third party financial institution (the “Factor”). Pursuant to the terms of the arrangement, the Company, from time to time, shall sell to the Factor certain of its accounts receivable balances on a recourse basis for credit approved accounts. The Factor remits 90% of the accounts receivable balance to the Company, with the remaining balance, less fees, to be forwarded to the Company once the Factor collects the full accounts receivable balance from the customer. An administrative fee of 0.015% per diem is charged on the gross amount of accounts receivables assigned to Factor, plus interest to be calculated at 0.011806% per day. The total amount of accounts receivable factored was $2,401,839 (unaudited) and $4,180,834 at March 31, 2016 and December 31, 2015, respectively.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1 — Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

– Quoted prices for similar assets or liabilities in active markets

– Quoted prices for identical or similar assets or liabilities in markets that are not active

– Inputs other than quoted prices that are observable for the asset or liability

– Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 — Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). The Company did not measure any financial instruments on a recurring basis using significantly unobservable inputs (Level 3) as of March 31, 2016.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Historically, the Company has not experienced any losses on deposits.

The Company’s policy is to maintain an allowance for doubtful accounts, if any, for estimated losses resulting from the inability of its customer to pay. However, if the financial condition of the Company’s customers were to deteriorate rapidly, resulting in nonpayment, the Company could be required to provide for additional allowances, which would decrease operating income in the period that such determination was made.

Property and Equipment

Property and equipment is presented at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Betterments, renewals, and extraordinary repairs that extend the life of the assets are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation and amortization applicable to retired assets are removed from the Company’s accounts, and the gain or loss on dispositions, if any, is recognized in the consolidated statements of operations

Equipment are recorded at cost and depreciated using the straight-line method over an estimated useful life of 5 years.

Intangible Assets

The Company has intangible assets recorded as part of a business acquisition (see Note 6). Intangible assets with definite useful lives, representing customer relationships, are being amortized over their remaining estimated useful lives of 3 years using the straight-line method, which represents the economic benefit pattern of the intangible assets.

Impairment of Long-Lived Assets

Long-lived assets, including intangibles, are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable. The evaluation requires that assets be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to their estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. The Company’s management currently believes there is no impairment of its long-lived assets as of March 31, 2016 and December 31, 2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s business model will continue. Either of these could result in future impairment of long-lived assets.

Revenue Recognition

The Company’s revenue is derived from providing temporary staffing services to its clients. The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

The Company recognizes its revenue from temporary staffing services on a gross basis in accordance with the guidance in FASB ASC 605-45 which outlines various factors or indicators that assist in determining whether revenue should be recognized on a gross or a net basis. In connection with this guidance, the Company believes the gross basis is appropriate, as the Company is the primary obligor in its arrangements and is responsible for fulfilling the services being provided to the individual customers and for compensating the individual service providers, regardless of whether the customer accepts the work.

Cost of Revenue

Cost of revenue consists of wages, related payroll taxes, workers compensation, and employee benefits of the Company’s employees while they work on contract assignment as temporary staff of the Company’s customers.

Net Income (Loss) Per Share

Basic income per share is computed by dividing the net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted income per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock.  The Company had no common stock equivalents outstanding for the three months ended March 31, 2016 and 2015.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The likelihood of realizing the tax benefits related to a potential deferred tax asset is evaluated, and a valuation allowance is recognized to reduce that deferred tax asset if it is more likely than not that all or some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are calculated at the beginning and end of the year; the change in the sum of the deferred tax asset, valuation allowance and deferred tax liability during the year generally is recognized as a deferred tax expense or benefit. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company evaluates the accounting for uncertainty in income tax recognized in its financial statements and determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit is recorded in its financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not accrued for any such uncertain tax positions as of March 31, 2016 or December 31, 2015.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

XML

GOING CONCERN

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

4. GOING CONCERN

The Company has an accumulated deficit of $762,135 since inception. This accumulated deficit is primarily the result of increased operating expenses associated with professional fees necessary to complete its merger transaction and continue as a public company, as well as revenues historically being at below break-even levels. Going forward, the Company expects these annual expenses to be lower. On February 11, 2014, the Company also acquired the customer list of Loyalty Staffing Services, Inc. (see Note 6), which is expected to increase cash flows from operations. Management believes this will allow the Company to operate at profitable level in the future.

The Company anticipates that it will require approximately $700,000 to $1.0 million to establish and fund its factoring facility. These amounts would be used to fund payroll and taxes up to the point that these amounts are collect from the client. Factoring internally would mean self-financing, resulting in a savings to the Company. No additional material or regulatory costs would be incurred at this point. Once the factoring entity is successfully set-up, the Company expects to realize ongoing savings from the reduced factoring costs.

The Company’s continuation as a going concern is dependent on management’s ability to develop profitable operations, and / or obtain additional financing from its shareholders and / or other third parties. In order to address the need to satisfy its continuing obligations and realize its long term strategy, management’s plans include continuing to fund operations with cash received from financing activities.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Furniture and equipment	$	5,658	$	5,658
Vehicles		63,612		63,612
		69,270		69,270
Less: accumulated depreciation		19,406		15,961
	$	49,864	$	53,309

Depreciation expense for the three months ended March 31, 2016 and 2015 amounted to $3,445 and $1,665, respectively.

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ACQUISITION

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

6. ACQUISITION

On February 11, 2014, the Company entered into an agreement to purchase the customer list of Loyalty Staffing Services, Inc. (“Loyalty”), a California corporation, for an aggregate purchase price of $1,444,363 consisting of a cash payment of $100,000, along with a $400,000 note payable, net of a discount of $55,637 for imputed interest, and 500,000 shares issued of the Company’s common stock, valued at the estimated fair value of $2 per share. The total amount due of $500,000 was payable as follows; 1) $50,000 of the purchase price would be paid within five days of the release of certain Uniform Commercial Code liens and personal guarantees, 2) an additional $50,000 would be paid sixty days from the date of such release, 3) the Company executed a promissory note to the seller for $400,000, payable in four installments of $75,000 every six months after the closing date of the agreement, with a remaining and final payment of $100,000 payable 30 months after the closing date.

The Company was in dispute with the seller of Loyalty, Nancy Esteban, concerning the terms of the cash portion and note payable portion of the payout in the original transaction described above. The Company reached a settlement with Ms. Esteban on June 24, 2015. In connection with the settlement agreement, the parties agreed to reduce the total note payable portion of the purchase price from $500,000 to $425,000. Per the terms of the settlement agreement, the aggregate amount due of $425,000 is payable as follows; $125,000 is due upon signing of the agreement, and the remaining $300,000 is payable in 30 monthly installments of $10,000 starting in August 2015 through February 2018. The remaining balance due of this note payable amounted to $220,000 as of March 31, 2016 (see Note 9).

Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets were based on valuations using the income approach.

The purchase price allocation was allocated as follows:

Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value

Intangible assets	$	1,465,867
Accounts payable		(21,504)
	$	1,444,363

Intangible assets acquired represented customer relationships which had an estimated useful life of 5 years. During the year ended December 31, 2015, the Company recorded an impairment charge of $640,733 to write down the carrying value of the intangible assets to their estimated fair value. The adjusted carrying amount of the intangible assets after the impairment loss is being amortized over a remaining estimated useful life of 3 years.

Amortization expense for intangible assets for the three months ended March 31, 2016 and 2015 amounted to $22,710 and $73,294, respectively. Estimated future amortization of intangible assets, after taking into account the impairment loss of $640,733 described above, is as follows.

Year Ended
December 31,
2016 (remainder of)	$	68,131
2017		90,841
2018		90,840
	$	249,812

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ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

7. ACCRUED EXPENSES

Accrued expenses consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Accrued payroll expenses	$	532,740	$	590,411
Other accrued operating expenses		207,219		185,056
Accrued interest		5,396		5,396
	$	745,355	$	780,863

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NOTES RECEIVABLE - RELATED PARTY

3 Months Ended

Mar. 31, 2016

Notes Receivable [Member]

Related Party Transaction [Line Items]

Related Party Transactions Disclosure [Text Block]

8. NOTES RECEIVABLE – RELATED PARTY

The Company issued a series of unsecured notes receivables due from an officer of the Company totaling $98,918 as of March 31, 2016 and December 31, 2015. Of the outstanding borrowings at March 31, 2016, $38,500 of the amounts bear interest at 6% per annum, and the remainder of the amounts are non-interest bearing. The amounts are due in 2018 at the following due dates; $33,418 is due March 31, 2018, $19,500 is due June 30, 2018, $7,500 is due September 30, 2018 and $38,500 is due December 31, 2018.

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NOTES PAYABLE - ACQUISITION

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

9. NOTES PAYABLE – ACQUISITION

Notes payable resulting from the acquisition of Loyalty consisted of the following.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Settment Agreement Payable to seller - Payable in 30 monthly installments of $10,000 beginning August 15, 2015 through January 15, 2018. The amounts are non-interest bearing.	$	220,000	$	250,000
	$	220,000	$	250,000
Discount on notes payable		(10,728)		(12,214)
Notes payable, net	$	209,272	$	237,786
Less: current portion of notes payable		109,272		107,786
Notes payable, net of current portion	$	100,000	$	130,000

Expected future maturity of long-term debt is as follows for each of the years ended December 31.

Year Ended
December 31,
2016 (remainder of)	$	90,000
2017		120,000
2018		10,000
	$	220,000

As the note payable from the acquisition of Loyalty has no stated interest, the Company has imputed total interest of $55,637 using a rate of 10% per annum, which represents the Company’s incremental borrowing rate for similar transactions. The discount is being amortized into interest expense using the interest method. During the three months ended March 31, 2016 and 2015, amortization of the discount amounted to $1,486 and $8,491, respectively. As of March 31, 2016, the note payable is presented net of a discount of $10,728.

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CAR LOAN PAYABLE

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Short-term Debt [Text Block]

10. CAR LOAN PAYABLE

In August 2015, the Company purchased a vehicle for business purposes for an aggregate price of $49,612. The Company financed $37,612 of the amount over 72 months at an interest rate of 13%. The balance outstanding as of March 31, 2016 amounted to $35,190.

Expected future maturity of the car loan payable is as follows for each of the years ended December 31.

	Year Ended
	December 31,
2016 (remainder of)	$	3,585
2017		5,242
2018		5,972
2019		6,804
2020		7,751
Thereafter		5,836
Total	$	35,190

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COMMITMENTS

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

11. COMMITMENTS

Leases

The Company leases its office locations located in Torrance, California and Phoenix, Arizona under operating leases on a month-to-month basis at monthly rates ranging from $737 to $3,211. The Company leases its offices located in Santa Fe Springs, California and Ontario, California under a non-cancellable operating leases extending through March 2018.

The following summarizes the amounts due in future periods under non-cancellable operating leases.

	Year Ended
	December 31,
2016 (remainder of)	$	23,364
2017		31,152
2018		5,476
Total	$	59,992

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2016 and December 31, 2015. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company has not experienced any losses related to this concentration of risk. As of March 31, 2016, the Company had $284,705 of balances that exceeded the FDIC insurance limits.

Receivables, Policy [Policy Text Block]

Accounts Receivable and Factoring

Accounts receivable are carried at the original amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer’s financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The allowance for doubtful accounts was $29,824 as of March 31, 2016 (unaudited) and December 31, 2015.

The Company entered into an accounts receivable factoring arrangement with a non-related third party financial institution (the “Factor”). Pursuant to the terms of the arrangement, the Company, from time to time, shall sell to the Factor certain of its accounts receivable balances on a recourse basis for credit approved accounts. The Factor remits 90% of the accounts receivable balance to the Company, with the remaining balance, less fees, to be forwarded to the Company once the Factor collects the full accounts receivable balance from the customer. An administrative fee of 0.015% per diem is charged on the gross amount of accounts receivables assigned to Factor, plus interest to be calculated at 0.011806% per day. The total amount of accounts receivable factored was $2,401,839 (unaudited) and $4,180,834 at March 31, 2016 and December 31, 2015, respectively.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

• Level 1 — Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

– Quoted prices for similar assets or liabilities in active markets

– Quoted prices for identical or similar assets or liabilities in markets that are not active

– Inputs other than quoted prices that are observable for the asset or liability

– Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 — Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). The Company did not measure any financial instruments on a recurring basis using significantly unobservable inputs (Level 3) as of March 31, 2016.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Historically, the Company has not experienced any losses on deposits.

The Company’s policy is to maintain an allowance for doubtful accounts, if any, for estimated losses resulting from the inability of its customer to pay. However, if the financial condition of the Company’s customers were to deteriorate rapidly, resulting in nonpayment, the Company could be required to provide for additional allowances, which would decrease operating income in the period that such determination was made.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment is presented at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Betterments, renewals, and extraordinary repairs that extend the life of the assets are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation and amortization applicable to retired assets are removed from the Company’s accounts, and the gain or loss on dispositions, if any, is recognized in the consolidated statements of operations

Equipment are recorded at cost and depreciated using the straight-line method over an estimated useful life of 5 years.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Intangible Assets

The Company has intangible assets recorded as part of a business acquisition (see Note 6). Intangible assets with definite useful lives, representing customer relationships, are being amortized over their remaining estimated useful lives of 3 years using the straight-line method, which represents the economic benefit pattern of the intangible assets.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

Long-lived assets, including intangibles, are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable. The evaluation requires that assets be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to their estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. The Company’s management currently believes there is no impairment of its long-lived assets as of March 31, 2016 and December 31, 2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s business model will continue. Either of these could result in future impairment of long-lived assets.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company’s revenue is derived from providing temporary staffing services to its clients. The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

The Company recognizes its revenue from temporary staffing services on a gross basis in accordance with the guidance in FASB ASC 605-45 which outlines various factors or indicators that assist in determining whether revenue should be recognized on a gross or a net basis. In connection with this guidance, the Company believes the gross basis is appropriate, as the Company is the primary obligor in its arrangements and is responsible for fulfilling the services being provided to the individual customers and for compensating the individual service providers, regardless of whether the customer accepts the work.

Cost of Sales, Policy [Policy Text Block]

Cost of Revenue

Cost of revenue consists of wages, related payroll taxes, workers compensation, and employee benefits of the Company’s employees while they work on contract assignment as temporary staff of the Company’s customers.

Earnings Per Share, Policy [Policy Text Block]

Net Income (Loss) Per Share

Basic income per share is computed by dividing the net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted income per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock.  The Company had no common stock equivalents outstanding for the three months ended March 31, 2016 and 2015.

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The likelihood of realizing the tax benefits related to a potential deferred tax asset is evaluated, and a valuation allowance is recognized to reduce that deferred tax asset if it is more likely than not that all or some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are calculated at the beginning and end of the year; the change in the sum of the deferred tax asset, valuation allowance and deferred tax liability during the year generally is recognized as a deferred tax expense or benefit. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company evaluates the accounting for uncertainty in income tax recognized in its financial statements and determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit is recorded in its financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not accrued for any such uncertain tax positions as of March 31, 2016 or December 31, 2015.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Furniture and equipment	$	5,658	$	5,658
Vehicles		63,612		63,612
		69,270		69,270
Less: accumulated depreciation		19,406		15,961
	$	49,864	$	53,309

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ACQUISITION (Tables)

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The purchase price allocation was allocated as follows:

Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value

Intangible assets	$	1,465,867
Accounts payable		(21,504)
	$	1,444,363

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Amortization expense for intangible assets for the three months ended March 31, 2016 and 2015 amounted to $22,710 and $73,294, respectively. Estimated future amortization of intangible assets, after taking into account the impairment loss of $640,733 described above, is as follows.

Year Ended
December 31,
2016 (remainder of)	$	68,131
2017		90,841
2018		90,840
	$	249,812

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ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Accrued expenses consisted of the following as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Accrued payroll expenses	$	532,740	$	590,411
Other accrued operating expenses		207,219		185,056
Accrued interest		5,396		5,396
	$	745,355	$	780,863

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NOTES PAYABLE - ACQUISITION (Tables) - Loyalty Staffing Services Inc. [Member]

3 Months Ended

Mar. 31, 2016

Schedule Of Debt Disclosure [Line Items]

Schedule of Debt [Table Text Block]

Notes payable resulting from the acquisition of Loyalty consisted of the following.

	March 31,		December 31,
	2016		2015
	(Unaudited)
Settment Agreement Payable to seller - Payable in 30 monthly installments of $10,000 beginning August 15, 2015 through January 15, 2018. The amounts are non-interest bearing.	$	220,000	$	250,000
	$	220,000	$	250,000
Discount on notes payable		(10,728)		(12,214)
Notes payable, net	$	209,272	$	237,786
Less: current portion of notes payable		109,272		107,786
Notes payable, net of current portion	$	100,000	$	130,000

Schedule of Maturities of Long-term Debt [Table Text Block]

Expected future maturity of long-term debt is as follows for each of the years ended December 31.

Year Ended
December 31,
2016 (remainder of)	$	90,000
2017		120,000
2018		10,000
	$	220,000

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CAR LOAN PAYABLE (Tables)

3 Months Ended

Mar. 31, 2016

Car Loan [Member]

Short-term Debt [Line Items]

Schedule of Maturities of Long-term Debt [Table Text Block]

Expected future maturity of the car loan payable is as follows for each of the years ended December 31.

	Year Ended
	December 31,
2016 (remainder of)	$	3,585
2017		5,242
2018		5,972
2019		6,804
2020		7,751
Thereafter		5,836
Total	$	35,190

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COMMITMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

The following summarizes the amounts due in future periods under non-cancellable operating leases.

	Year Ended
	December 31,
2016 (remainder of)	$	23,364
2017		31,152
2018		5,476
Total	$	59,992

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2012	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Cash	$ 534,705		$ 565,040	$ 624,720	$ 787,238
Allowance for Doubtful Accounts Receivable	29,824		29,824
Percentage of Accounts Receivable Remitted by Factor		90.00%
Percentage of Administrative Fee Per Diem		0.015%
Factoring Arrangement Interest Rate Per Day		0.01181%
Accounts Receivable Factored	$ 2,401,839		$ 4,180,834
Finite-Lived Intangible Asset, Useful Life	5 years
Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	3 years

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GOING CONCERN (Details Textual) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Retained Earnings (Accumulated Deficit), Total	$ (762,135)	$ (770,443)
Minimum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount required to establish and fund its factoring facility	700,000
Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount required to establish and fund its factoring facility	$ 1,000,000

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 69,270	$ 69,270
Less: accumulated depreciation	19,406	15,961
Property, Plant and Equipment, Net, Total	49,864	53,309
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	5,658	5,658
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross, Total	$ 63,612	$ 63,612

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PROPERTY AND EQUIPMENT (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Depreciation	$ 3,445	$ 1,665

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ACQUISITION (Details)	Mar. 31, 2016 USD ($)
Business Acquisition [Line Items]
Intangible assets	$ 1,465,867
Accounts payable	(21,504)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net, Total	$ 1,444,363

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ACQUISITION (Details 1)	Mar. 31, 2016 USD ($)
Business Acquisition [Line Items]
2016	$ 68,131
2017	90,841
2018	90,840
Finite-Lived Intangible Assets, Net, Total	$ 249,812

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ACQUISITION (Details Textual) - USD ($)		3 Months Ended		12 Months Ended
	Feb. 11, 2014	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Jun. 24, 2015
Business Combination, Consideration Transferred, Total	$ 1,444,363
Business Combination Consideration Transferred 1 Cash Payable	100,000
Notes Payable, Total	400,000				$ 425,000
Business Combination Consideration Transferred 1 Amount Due	$ 500,000
Impairment of Intangible Assets, Finite-lived				$ 640,733
Amortization of Intangible Assets		$ 22,710	$ 73,294
Finite Lived Intangible Asset Remaining Estimated Useful Life				5 years
Customer Relationships [Member]
Finite Lived Intangible Asset Remaining Estimated Useful Life				3 years
Common Stock [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	500,000
Shares Issued, Price Per Share	$ 2
Notes Payable, Other Payables [Member]
Notes Payable with Imputed Interest, Discount	$ 55,637
Debt Instrument, Payment Terms	1) $50,000 of the purchase price would be paid within five days of the release of certain Uniform Commercial Code liens and personal guarantees, 2) an additional $50,000 would be paid sixty days from the date of such release, 3) the Company executed a promissory note to the seller for $400,000, payable in four installments of $75,000 every six months after the closing date of the agreement, with a remaining and final payment of $100,000 payable 30 months after the closing date.			$125,000 is due upon signing of the agreement, and the remaining $300,000 is payable in 30 monthly installments of $10,000 starting in August 2015 through February 2018.

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ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Schedule Of Accrued Expenses [Line Items]
Accrued payroll expenses	$ 532,740	$ 590,411
Other accrued operating expenses	207,219	185,056
Accrued interest	5,396	5,396
Accrued Liabilities, Current	$ 745,355	$ 780,863

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NOTES RECEIVABLE - RELATED PARTY (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2015
Related Party Transaction [Line Items]
Notes Receivable, Related Parties	$ 98,918					$ 98,918
Notes Receivable Related Parties Interest Bearing	$ 38,500
Related Party Transaction, Rate	6.00%
Scenario, Forecast [Member]
Related Party Transaction [Line Items]
Due from Related Parties		$ 38,500	$ 7,500	$ 19,500	$ 33,418

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NOTES PAYABLE - ACQUISITION (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Jun. 24, 2015	Feb. 11, 2014
Schedule Of Debt Disclosure [Line Items]
Notes payable, net			$ 425,000	$ 400,000
Less: current portion of notes payable	$ 109,272	$ 107,786
Notes payable, net of current portion	100,000	130,000
Loyalty Staffing Services Inc. [Member]
Schedule Of Debt Disclosure [Line Items]
Long-term Debt, Gross	220,000	250,000
Discount on notes payable	(10,728)	(12,214)
Notes payable, net	209,272	237,786
Less: current portion of notes payable	109,272	107,786
Notes payable, net of current portion	100,000	130,000
Loyalty Staffing Services Inc. [Member] | Settlement Agreement Payable to Seller [Member]
Schedule Of Debt Disclosure [Line Items]
Long-term Debt, Gross	$ 220,000	$ 250,000

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NOTES PAYABLE - ACQUISITION (Details) (Parenthetical) - Settlement Agreement Payable to Seller [Member]	3 Months Ended
	Mar. 31, 2016 USD ($)
Schedule Of Debt Disclosure [Line Items]
Debt Instrument, Periodic Payment, Total	$ 10,000
Debt Instrument, Maturity Date	Jan. 15, 2018

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NOTES PAYABLE - ACQUISITION (Details 1) - Loyalty Staffing Services Inc. [Member] - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Schedule Of Maturities Of Long Term Debt [Line Items]
2016 (remainder of)	$ 90,000
2017	120,000
2018	10,000
Long-term Debt, Gross	$ 220,000	$ 250,000

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NOTES PAYABLE - ACQUISITION (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Schedule Of Debt Disclosure [Line Items]
Amortization of Debt Discount (Premium)	$ 1,486	$ 8,491
Loyalty Staffing Services Inc. [Member]
Schedule Of Debt Disclosure [Line Items]
Notes Payable with Imputed Interest, Discount	$ 55,637
Debt Instrument, Interest Rate, Effective Percentage	10.00%
Amortization of Debt Discount (Premium)	$ 1,486	$ 8,491
Debt Instrument, Unamortized Discount	$ (10,728)		$ (12,214)

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CAR LOAN PAYABLE (Details) - Car Loan Payable [Member]	Mar. 31, 2016 USD ($)
Short-term Debt [Line Items]
2016 (remainder of)	$ 3,585
2017	5,242
2018	5,972
2019	6,804
2020	7,751
Thereafter	5,836
Total	$ 35,190

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CAR LOAN PAYABLE (Details Textual) - Car Loan Payable [Member] - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 31, 2016
Short-term Debt [Line Items]
Noncash or Part Noncash Acquisition, Fixed Assets Acquired	$ 49,612
Debt Instrument, Face Amount	$ 37,612
Debt Instrument, Term	72 months
Debt Instrument, Interest Rate, Effective Percentage	13.00%
Other Loans Payable, Total		$ 35,190

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COMMITMENTS (Details)	Dec. 31, 2015 USD ($)
Commitments And Contingencies [Line Items]
2016 (remainder of)	$ 23,364
2017	31,152
2018	5,476
Total	$ 59,992

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COMMITMENTS (Details Textual)	3 Months Ended
	Mar. 31, 2016 USD ($)
Lease Expiration Term	2018-03
Maximum [Member]
Operating Leases, Rent Expense	$ 3,211
Minimum [Member]
Operating Leases, Rent Expense	$ 737