SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K/A

(Amendment No. 1)



(Mark One)

| | x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 :
| | - | --------------------------------------------------------------------------------------



For the fiscal year
ended December 31, 2014



| |  ̈ | 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 0-54427



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)



Registrant's telephone number, including
area code: 602-442-5277



Securities registered pursuant to Section
12(b) of the Act: None



Securities registered pursuant to Section
12(g) of the Exchange Act:



Common Stock, $.0001 par value per share

(Title of class)



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

 ̈YesxNo



Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 ̈YesxNo



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.

xYes ̈No



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

xYes ̈No





Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.

xYes ̈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).

 ̈YesxNo



State the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last
sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed
second fiscal quarter.



| |  | $ 0
| |  | ---



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 March 31, 2015
| | ------------------------------- | -----------------------------
| |                                 |                              
| | Common Stock, par value $0.0001 | 7,500,000 shares             



DOCUMENTS INCORPORATED BY REFERENCE



None













FIRST
RATE STAFFING CORPORATION

FORM
10-K ANNUAL REPORT

FOR
THE YEAR ENDED DECEMBER 31, 2014

TABLE OF CONTENTS



|         |                                                                                                              | Page
|-------- | ------------------------------------------------------------------------------------------------------------ | ----
|PART I  
|Item 1.  | Business                                                                                                     | 1   
|Item 1A. | Risk Factors                                                                                                 | 6   
|Item 1B. | Unresolved Staff Comments                                                                                    | 6   
|Item 2.  | Properties                                                                                                   | 6   
|Item 3.  | Legal Proceedings                                                                                            | 6   
|Item 4.  | Mine Safety Disclosures                                                                                      | 6   
|PART II 
|Item 5.  | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 7   
|Item 6.  | Selected Financial Data                                                                                      | 7   
|Item 7.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 7   
|Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                   | 12  
|Item 8.  | Financial Statements and Supplementary Data                                                                  | 12  
|Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 26  
|Item 9A. | Controls and Procedures                                                                                      | 26  
|Item 9B. | Other Information                                                                                            |     
|PART III
|Item 10. | Directors, Executive Officers and Corporate Governance                                                       | 28  
|Item 11. | Executive Compensation                                                                                       | 31  
|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 32  
|Item 13. | Certain Relationships and Related Transactions, and Director Independence                                    | 21  
|Item 14. | Principal Accounting Fees and Services                                                                       | 33  
|PART IV 
|Item 15. | Exhibits, Financial Statement Schedules                                                                      | 34  
|        
|         | Signatures                                                                                                   | 35  













PART
I



ITEM
1. BUSINESS



First
Rate Staffing Corporation, a Delaware corporation (the “Company”), provides recruiting and staffing services for temporary
positions in light industrial, distribution center, assembly, and clerical businesses.



The
Company was incorporated in the State of Delaware in April 2011 as Moosewood Acquisition Corporation, a development stage company.
In May 2012, the Company effected a change of control by issuing shares of common stock to new shareholders, redeeming shares of
existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors.
In connection with the change of control, the Company changed its name from Moosewood Acquisition Corporation to First Rate Staffing
Corporation.



On
November 9, 2012, the Company entered into merger agreements with each of First Rate Staffing, LLC, a California limited liability
company (“First Rate California”), and First Rate Staffing, Inc., a Nevada corporation (“First Rate Nevada”),
in separate mergers (collectively, and together, the “Mergers”) that were concurrently completed on November 13, 2012.
Prior to the Mergers, First Rate California and First Rate Nevada were under common control of the same group of shareholders.



The
mergers were effectuated by the Company through the exchange of (i) all of the outstanding membership interests of First Rate California
for 2,000,000 shares of common stock of the Company, and (ii) all of the outstanding shares of First Rate Nevada for 2,000,000
shares of common stock of the Company. Accordingly, a total of 4,000,000 shares were issued in the mergers.



First
Rate California was formed in April 2010 in the State of California. Since its inception, First Rate California provided recruiting
and staffing services for temporary positions in light industrial, distribution center, assembly, and clerical businesses to clients
in California.



First
Rate Nevada was formed in March 2010 in the State of Nevada and is registered to conduct business in the State of Arizona. Since
its inception, First Rate Nevada has provided recruiting and staffing services for temporary positions in light industrial, distribution
center, assembly, and clerical businesses to clients in Arizona.





1







Prior
to the mergers, the Company had no ongoing business or operations and was established for the purpose of completing a business
combination with a target company, such as First Rate California and First Rate Nevada. The Company, as the surviving entity from
the Mergers, has taken over the respective operations and business plans of each of both First Rate California and First Rate Nevada.



On
February 11, 2014, the Company entered into an agreement to purchase all the assets of Loyalty Staffing Services Inc. (“Loyalty”),
a California corporation for an aggregate purchase price valued at $1,500,000 consisting of $100,000 in cash and $400,000 in note
payable and 500,000 shares of the Company's common stock, valued at a price of $2 per share.



The
agreement provided that:



(1)
$100,000 of the cash portion of the purchase price shall be paid $50,000 within five business days of the release of certain Uniform
Commercial Code liens and personal guarantees and an additional $50,000 sixty days from the date of such release.



(2)
The Company shall execute a promissory note in favor of Loyalty for the remaining $400,000 with $75,000 payable six months after
the closing date of the agreement (February 11, 2014) and $325,000 payable 30 months after such closing date.



Loyalty
has the option of converting all or any part of the $400,000 balance into the Company's common stock at the then prevailing trading
price or market value at the time of closing of the agreement or $2 per share. It has agreed to a reduction in the promissory note
of an amount equal to 5% of $1,500,000 and a return of common stock of an amount equal to 2.5% of $1,500,000 for every reduction
of $1,500,000 in annual revenues generated by the loss a client or clients acquired as part of the asset agreement within 12 months
from the closing date.



The
Company is currently in dispute with the seller of Loyalty, Nancy Esteban, concerning the cash portion and note payable portion
of the payout in the original transaction described above. The parties are currently negotiating in good faith to resolve. The
Company expects this settlement to occur during the second quarter of 2015.



Loyalty
is a light industrial and hospitality staffing company in business since 2008 servicing clients in the greater Los Angeles area.
Loyalty services over 60 clients with approximately $6,000,000 to $7,000,000 in revenues. The Loyalty clients mirror the current
client types of First Rate Staffing Corporation and management believes that the synergy between the two companies is extremely
strong. The Company services clients in the Santa Fe Springs area of Los Angeles, along with Phoenix, Arizona. Loyalty services
clients in the Torrance area of Los Angeles County. Management believes that the acquisition will greatly enhance the market presence
of the Company in the greater Los Angeles area that the combination of the two entities will allow the Company to reduce overall
expense through economies of scale and improve profitability.



Services



The
Company provides recruiting and staffing services for temporary positions in light industrial, distribution center, assembly, and
clerical businesses. The Company’s client customization model allows it to integrate its services to its client-specific
needs and thereby providing clients with the highest level of customer service. The Company strives to devote adequate time and
attention to understand both the needs of its clients and the capabilities of its employees so that the Company can identify the
best suitable matches between client needs and employee abilities. The Company is dedicated to achieving a high level of service
for all of its clients and considers itself to be a loyal partner to meeting client demands. In this regard, the Company seeks
to position itself not only as a pool of employee for its clients, but also as a dedicated business partner that understands its
clients’ businesses and needs.



Services
provided to clients by the Company include recruiting, payroll, all state and federal taxes, worker’s compensation coverage,
and screening and managing of clients’ contingent work force. The Company provides comprehensive screening and electronic
verification (for federal employment eligibility requirements) for all employees. The Company also conducts reference checks of
employees to ensure that the employers receive accurate and useful descriptions of employees’ backgrounds and experiences.
The Company also operates a risk management department that helps client mitigate losses by implementing sound and effective risk
management procedures at client sites. Clients receive these risk management services at no cost, helping them to reduce their
own business risks and expenses.





2







The
Company offers recruiting, human resources, workers’ compensation services, and risk management at no additional charge as
part of the overall mark-up inclusive with the standard mark-up rate for temporary placement of employees. For example, a client
may have a need for a certain number of temporary employees that fulfill a specific function. The Company recruits, screens, tests,
and verifies employment eligibility for these individuals based on the requirements of the client. The Company also ensures that
the employees are certified/licensed based on the equipment and facility that they will be operating within. The Company considers
safety to be a very important priority since accidents directly impact workers’ compensation cost. Generally, workers’
compensation costs usually run from 6-10% of total costs. Risk management services, such as safety audits, certifications, and
safety training, are typically provided at no additional charge (i.e. inclusive in the mark-up rate) to clients.



The
Business: Staffing



The
industry is divided into three major segments: temporary help services (about 50 percent of industry revenue), professional employer
organizations (about 40 percent), and placement agencies (about 10 percent).



Temporary
help services provide workers for customers for limited periods, often to substitute for absent permanent workers or to help during
periods of peak demand. These workers, who are employees of the temporary help agency, will generally fill clerical, technical,
or industrial positions.



Professional
employer organizations (PEOs), sometimes known as employee leasing agencies, contract to provide workers to customers for specific
functions, often related to human resource management. In many cases, customers’ employees are hired by a PEO and then leased
back to the customer.



Placement
agencies, sometimes referred to as executive recruiters or headhunters, find workers to fill permanent positions at customer companies.
These agencies may specialize in placing senior managers, midlevel managers, technical workers, or clerical and other support workers.



The
Company considers itself to be a temporary staffing company within the broader staffing industry. However, the Company does conduct
permanent placements at the request of existing clients.



Staffing
companies identify potential employees through advertising and referrals, and the companies interview, test, and counsel workers
before sending them to the customer for approval. Pre-employment screening can include skills assessment, drug tests, and criminal
background checks. Most staffing agencies provide some sort of training, often involving data entry and basic computer skills.
The personnel staffing industry has been radically changed by the Internet. Many employers list available positions with one or
several Internet personnel sites like monster.com or jobs.com, and on their own site. Personnel agencies operate their own sites
and often still work as intermediaries by helping employers accurately describe job openings and screening candidates who submit
applications.



Job
growth drives demand for the personnel staffing industry. The profitability of individual companies depends on good marketing and
availability of qualified employees. Large companies enjoy economies of scale in marketing and back-office operations. Small companies
can compete successfully by specializing in an industry or a job function. The industry is labor-intensive: average annual revenue
per worker is about $80,000.



To
a great extent, clients follow the seasonal retail cycles but precede them by two to three months and two distinct “peak”
seasons: (i) between August and October preceding Halloween, Thanksgiving, and Christmas and (ii) between April and May preceding
the summer season.



Major
end-use customers include businesses from a wide range of industries. Nine out of ten large US businesses have used a staffing
agency, according to the American Staffing Association. Wholesale, retail, and service industries are most likely to use temporary
help services. Marketing involves direct sales presentations, referrals from existing clients, and advertising. Agencies compete
both for customers and workers. Depending on market supply and demand at any given time, agencies may allocate more resources either
to finding potential employers or potential workers. Permanent placement agencies work either on a retainer or a contingency basis,
often 30 percent of annual salary. Clients may retain an agency for a specific job search or on contract for a specific period.
Temporary help services charge customers a fixed price per hour or a standard markup on prevailing hourly rates. When a temporary
employee is hired for a regular position within a company, the customer pays a fee.





3







Staffing
companies are regulated by the United States Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC),
and often by state authorities. These agencies regulate the relationship between the agency and the temporary employees, or employee
candidates. Many federal anti-discrimination rules regulate the type of information that employment firms can request from candidates
or provide to customers about candidates. PEOs are often considered co-employers along with the client, but the PEO is responsible
for employee wages, taxes, and benefits. State regulation aims to ensure that PEOs provide the benefits they promise to workers.



Demand
for personnel staffing services is strongest in areas with strong employment growth, and geographic location can determine an agency's
success in attracting employees and employers. Customers generally prefer a staffing service that can provide workers for all of
their office locations. Temporary employee candidates are often unwilling to relocate for a position.



The
revenue of personnel agencies depends on the number of jobs they fill, which in turn depends on economic growth. During economic
slowdowns, many client companies stop hiring altogether. In years of good economic growth, the number of jobs in the US economy
grows approximately 2% annually. Internet employment sites expand a company's ability to find workers without the help of traditional
agencies. Personnel agencies often work as intermediaries, helping employers accurately describe job openings and screen candidates.
Increasing use of sophisticated, automated job description and candidate screening tools could make many traditional functions
of personnel agencies obsolete. Free social networking sites such as LinkedIn and Facebook are also becoming a common way for recruiters
and employees to connect without the assistance of a staffing agency.



To
avoid large placement agency fees, big companies may use in-house personnel staff, current employee referrals, or human resources
consulting companies to find and hire new personnel. Because placement agencies typically charge a fee based on a percentage of
the first year's salary of a new worker, companies with many jobs to fill have a large financial incentive to avoid agencies.



However,
temporary workers are becoming such a large factor at some companies that personnel agency staff sometimes work at the customer's
site to recruit, train, and manage. Onsite training is designed to serve only that customer. Agencies try to match the best qualified
employees for the customer's needs, but often provide additional training specific to that company, such as instruction in the
use of proprietary software.



Most
personnel agencies are small and may depend heavily on a few big customers for a large portion of revenue. Large customers may
lead to increased revenues, but also expose agencies to higher risks. When major accounts experience financial hardships, and have
less need for temporary employment services, agencies stand to lose large portions of revenue.



Startup
costs for a personnel agency are very low. Individual offices can be highly profitable, but consolidation is driven mainly by the
opportunity for large agencies to develop national relationships with big customers. Some agencies expand by starting new offices
in promising markets, but most prefer to buy existing independent offices with proven staff and an existing customer roster.



The
Market



The
output of US employment services annual growth since 2009 has been 7.2% based on industry data published in December 2014. Growth
is expected to increase in the United States as a result of the Affordable Care Act. Based on U.S. Market Research Firms for the
period 2009.





4







Major
staffing services providers include Adecco (headquartered in Switzerland), Randstad (the Netherlands), and Manpower (US). The US
and Japan each account for about 20 percent of global revenue. The UK accounts for about 15 percent. There are about 70,000 private
employment services agencies in the world, with the top 4 companies accounting for about 10% of the industry’s sales.



The
US personnel staffing agencies industry includes about 32,000 companies with combined annual revenue of about $230 billion. Major
companies include ADP TotalSource, Insperity (formerly Administaff), Kelly Services, Manpower, and the US operations of Adecco.
The industry is fragmented: the 50 largest companies generate about 40 percent of industry revenue. The global staffing services
industry generates about $280 billion in annual revenue, according to the International Confederation of Private Employment Agencies.
Major staffing services providers based outside the US are Adecco (Switzerland) and Randstad (the Netherlands). Large staffing
services markets include the EU, the US, Japan, and the UK. The forecast for temporary labor in 2015 is increasing in demand with
the implementation of the Affordable Care Act. Many companies are anticipated to use temporary staffing companies due to the definition
of fulltime employment changing from 40 to 30 hours.



The
Company’s Presence in the Market



Currently,
the Company operates in California (the greater Los Angeles area) and Arizona (the greater Phoenix area). The presence in these
two regions is due partly from the previous experience of the Company and its officers in these marketplaces, but also because
of the heavy focus these two metropolitan areas have on the Company’s particular specialty niche in staffing; light industrial.



In
the past 18 months, the Company has seen the market trending upward with respect to its current client base, as well as the addition
of Loyalty Staffing in Torrance California. This is evidenced in the number of clients, the billing amounts increasing, and their
overall need for labor assistance increasing. According to the American Staffing Association, a leader in industry analysis, temporary
labor experienced a total year over year increase of 7.2%.



Los
Angeles mirrors the Phoenix market as the Company sees a majority of its business in the form of unloading and re-packaging of
bulk quantity goods that arrive through the Port of Long Beach. These goods vary from food products to retail items. Many have
seasonal increases but the Company has a mainstay of labor that is employed throughout the year. Several clients operate in both
Los Angeles and Phoenix and the Company provides its services in both locations to these clients. The Company does not currently
operate in Nevada.



Customers



The
Company has a diverse array of customers across sectors. Due to the competitive nature of the industry, client information is kept
confidential. The company services the customers in the light industrial category.



Marketing
and Sales



The
Company has conducted limited advertising and marketing to date to reach new clients. To date, advertising and marketing has been
centered on reaching potential employees. In all locations, the Company has used multiple resources to drive in potential new temporary
employees. These tactics range from advertisements in newspapers, job boards, unemployment assist centers, as well as online advertisements.
The Company also utilizes CareerBuilder to recruit for professional placements.



Registration
Statement



The
Company has filed a registration statement with the Securities and Exchange Commission on Form S-1 pursuant to the Securities Act
of 1933 for the offer and sale of 1,600,000 shares of its common stock offered by the holders of such stock (“selling shareholders”).
It is anticipated that the selling shareholders will offer their shares at a price of $2.00 per share. Although the registration
statement has been filed, it not yet effective and no sales can be made thereof until the time it has become effective. Although
the Company anticipates that the registration statement will be effective in the near future, there is no assurance that this will
occur.





5







The
Company and the selling shareholders are seeking an underwriter, broker-dealer or selling agent to sell the shares. Neither the
Company nor the selling shareholders have entered into any arrangements with any underwriter, broker-dealer or selling agent as
of the date of this Report.



The
Company will not receive any portion or percentage of any of the proceeds from the sale of the shares by the selling shareholders'
Shares.



Employees



The
Company presently has approximately 800 employees, consisting or approximately 680 employees in California and 120 employees in
Arizona.



Most
employees receive health benefits. The Company may offer additional fringe and welfare benefits in the future as the Company’s
profits grow and/or the Company secures additional outside financing.



ITEM
1A. RISK FACTORS



Not
required for smaller reporting companies.



ITEM
1B. UNRESOLVED STAFF COMMENTS



None.



ITEM 2. PROPERTIES



The
Company currently has three physical locations: Torrance, California, Santa Fe Springs, California and Phoenix, Arizona.



The
Torrance office is approximately 2300 square feet and is a month to month lease of $3,211. The office is located at a major intersection
in southern Los Angeles County. The Company incurs annual expenses of $38,532 for such lease.



The
Santa Fe Springs location consists of 1,355 square feet and is a monthly lease that is located in an office park on a major thoroughfare
for southern Los Angeles County, California. The monthly lease cost is $1,156, and annually the Company incurs annual expenses
of $13,872 for such lease. This new location now provides the Company with the desired street visibility.



The
Phoenix location consists of 1,600 square feet and is a yearly lease and is located at an intersection of a major thoroughfare
for Phoenix, Arizona. The Phoenix location offers street visibility and room for growth. The monthly lease cost is $737, and annually
the Company expends $8,844 for such lease.



The
Company also anticipates opening an official corporate location in Irvine, California in the near future.



ITEM
3. LEGAL PROCEEDINGS



The
Company is currently 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 parties are currently negotiating in good faith to resolve.
The Company expects this settlement to occur during the second quarter of 2015.



Other
than the above, as well as ongoing and routine employee claims for worker’s compensation that arise during the ordinary course
of the business of the Company, there are currently no pending, threatened or actual legal proceedings of a material nature in
which the Company is a party.



ITEM
4. MINE SAFETY DISCLOSURES



Not
applicable.





6







PART
II



ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



There
is no public market for the Company’s common stock. The Company has filed with the Securities and Exchange Commission a registration
statement on Form S-1 pursuant to the Securities Act of 1933 for the offer and sale of up to 1,600,000 shares of its common stock
owned by current shareholders. The registration statement is not yet effective and the Company cannot predict when, if at all,
such registration statement will become effective.



The
Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of December 31,
2014, 7,500,000 shares of common stock and no preferred stock were issued and outstanding.



The
Company has not paid any dividends to date. The Company intends to employ all available funds for the growth and development of
its business, and accordingly, does not intend to declare or pay any dividends in the foreseeable future.



The
Company has not made any sales of unregistered stock in the period covered by this report.



Recent
Sales of Unregistered Securities; Use of proceeds From Registered Securities.



None.



ITEM
6. SELECTED FINANCIAL DATA



There
is no selected financial data required to be filed for a smaller reporting company.



ITEM
7. 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 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 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," "First Rate," or "the Company" refers to the business
of First Rate Staffing Corporation.



Overview



The
Company was incorporated in the State of Delaware in April 2011. Each of First Rate Staffing, LLC, a California limited liability
company (“First Rate California”), and First Rate Staffing, Inc., a Nevada corporation (“First Rate Nevada”),
merged into the Company in separate mergers (collectively, and together, the “Mergers”) that were concurrently completed
in November 2012. References to the financial condition and performance of the Company below in this section “Management’s
Discussions and Analysis of Financial Condition and Results of Operation” are to First State California and First State Nevada,
respectively.





7







On
February 11, 2014, the Company entered into an agreement to purchase all the assets of Loyalty Staffing Services, a California
corporation for an aggregate purchase price valued at $1,500,000 consisting of $100,000 in cash and $400,000 in note payable and
500,000 shares of the Company's common stock, valued at a price of $2 per share.



The
agreement provides that:



(1)
$100,000 of the cash portion of the purchase price shall be paid $50,000 within five business days of the release of certain Uniform
Commercial Code liens and personal guarantees and an additional $50,000 sixty days from the date of such release.



(2)
The Company shall execute a promissory note in favor of Loyalty Staffing for the remaining $400,000 with $75,000 payable six months
after the closing date of the agreement (February 11, 2014) and $325,000 payable 30 months after such closing date.



Loyalty
Staffing has the option of converting all or any part of the $400,000 balance into the Company's common stock at the then prevailing
trading price or market value at the time of closing of the agreement or $2 per share. It has agreed to a reduction in the promissory
note of an amount equal to 5% of $1,500,000 and a return of common stock of an amount equal to 2.5% of $1,500,000 for every reduction
of $1,500,000 in annual revenues generated by the loss a client or clients acquired as part of the asset agreement within 12 months
from the closing date.



The
Company is currently 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 parties are currently negotiating in good faith to resolve.
The Company expects this settlement to occur during the second quarter of 2015.



Critical Accounting
Policies and Estimates



Our
significant accounting policies are more fully described in the notes to our consolidated financial statements. Those material
accounting estimates that we believe are the most critical to an investor's understanding of our financial results and condition
are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations
and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the
determination of certain estimates.



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 as of December 31, 2014 and 2013 was $0.



During
2012, the Company entered into a new 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 non-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 receivable assigned to Factor, plus interest to be calculated at 0.011806% per day. The total amount of accounts receivable
factored was $1,824,376 and $756,718 at December 31, 2014 and December 31, 2013, respectively.





8







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 Accounting Standards Codification (“ASC”) No. 605, Revenue
Recognition. 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.



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.



Income Taxes



The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. Accordingly,
deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances
are established when it is more likely than not that some or all of the deferred tax assets will not be realized.



ASC
740 also clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to
meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification,
interest and penalties, accounting in interim periods, disclosure and transition. We believe that our income tax filing positions
and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial
position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, we did
not record a cumulative effect adjustment related to the adoption of ASC 740. Our policy for recording interest and penalties associated
with income-based tax audits is to record such items as a component of income taxes.



Results of Operations
and Financial Condition for the Year Ended December 31, 2014 as Compared to the Year Ended December 31, 2013



The following are the
consolidated results of our operations for the year ended December 31, 2014 compared to the year ended December 31, 2013.





|                                |  | Year Ended   |            |  |              |   |           |          | 
|------------------------------- |  | ------------ | ---------- |  | ------------ | - | --------- | -------- | 
|                                |  | December 31, |            |  | December 31, |   |           |          | 
|                                |  | 2014         |            |  | 2013         |   |           | $ Change | 
|                                |  |              |            |  |              |   |           |          | 
|Revenues                        |  | $            | 18,003,628 |  |              | $ | 9,177,841 |          | 
|Cost of revenues                |  |              | 16,137,224 |  |              |   | 8,300,029 |          | 
|Gross profit                    |  |              | 1,866,404  |  |              |   | 877,812   |          | 
|Operating expenses              |  |              | 1,604,707  |  |              |   | 900,588   |          | 
|Income (loss) from operations   |  |              | 261,697    |  |              |   | (22,776   | )        | 
|Interest and other expense, net |  |              | 185,255    |  |              |   | 19,123    |          | 
|Income (loss) before income tax |  |              | 76,442     |  |              |   | (41,899   | )        | 
|Income tax expense              |  |              | 66,676     |  |              |   | -         |          | 
|Net income (loss)               |  | $            | 9,766      |  |              | $ | (41,899   | )        | 







9







Revenues



Our revenues increased by $8,825,787, or
96.2%, during the year ended December 31, 2014 as compared to the same period in 2013. The increase in revenues is due primarily
to the addition of additional customers from the acquisition of Loyalty on February 11, 2014. As a result of the Loyalty acquisition,
the Company acquired approximately 60 additional customers which are expected to generate annual revenues of approximately $8 million.



Cost
of revenues



Our cost of revenues, which represent primarily
staffing salaries and workers compensation insurance costs, increased by $7,837,195, or 94.4%, during the year ended December 31,
2014 as compared to the same period in 2013. The increase in cost of revenues is due to the increase in revenues for the period.
The percentage increase in cost of revenues is consistent with the percentage increase in revenues. We expect the cost of revenues
to continue to increase as our revenues increase.



Operating
expenses



Operating expenses increased by $704,119,
or 78.2%, during the year ended December 31, 2014 as compared to the same period in 2013. The increase in operating expenses in
2014 was due to higher expenses associated with increased payroll and other costs from the acquisition of Loyalty subsequent to
the purchase date of February 11, 2014, as well as amortization expense of $259,438 on other intangible assets recorded in connection
with the acquisition.



Notes
Payable



The Company owes an aggregate total of
$500,000 to the seller of Loyalty, consisting of $100,000 within of sixty days of obtaining the necessary UCC and personal guarantee
releases, as well as a promissory note of $400,000 due in four payment installments of $75,000 commencing every six months after
the purchase date of February 11, 2014, as well as one final payment of $100,000 due thirty months after the purchase date. The
notes have not paid according to terms due to an internal issue, and the Company is currently renegotiating the terms of the outstanding
notes.



The
Company has promissory notes outstanding of $4,509. These notes consist of monies advanced by Cliff Blake, an officer and director
of the Company, to the Company, as listed. Each of these promissory notes consists of a single payment at the end of the term.



|Origination   |  | Principal |       |  | Interest       |           |         
|------------- |  | --------- | ----- |  | -------------- | --------- | --------
|Date          |  | Amount    |       |  | Rate per annum |           | Due Date
|December 2012 |  | $         | 4,509 |  |                | 6% simple |         



The
Company does not anticipate that it will borrow monies from related parties in the future. Such earlier loans were required to
fund certain non-recurring expenses, such as costs associated with filing its registration statement. In addition, as the Company
obtained a new factoring/financing facility in 2012 which lowered its costs of capital, the Company expects to realize significant
cost savings (and corresponding improvement to cash flow) from obtaining this new facility.



Capital
Resources



As
of December 31, 2014, the Company had cash of $787,238 and accounts receivable of $330,538.



The
Company’s proposed expansion plans and business process improvements over the next two years will necessitate additional
capital and financing. 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.





10







The
Company anticipates that it will require approximately $1.0 to $ 1.5 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 collected from the client. Factoring internally
would mean self-financing, resulting in a savings to the Company of approximately $150,000 per year. No additional material or
regulatory costs would be incurred at this point. If the Company was to offer factoring to other entities (i.e. outside of the
Company) then the 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
$35,000 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.



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 November 2013, the factor
commitment increased to $2,000,000. We also expect the acquisition of Loyalty in February 2014 to continue to provide additional
working capital from the additional customers acquired. In addition, the Company may borrow from time to time as available, sources
of funds from its officers and/or directors as needed.



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 $884,793 for the year ended December 31, 2014 compared to net cash used in operating
activities of $23,922 for 2013.The significant change between the years was a result of the proceeds generated from additional
sales related to the acquisition of Loyalty during the year ended December 31, 2014.



We
had no cash used in investing activities during the year ended December 31, 2014. We had cash flows used in investing activities
during 2013 of $37,101, which consisted of $28,713 for the acquisition of property and equipment and $8,388 in notes receivable
lending.



We had net cash used in financing activities
of $151,598 during the year ended December 31, 2014 resulting from payments of our outstanding notes payable. We
had net cash used in financing activities of $70,521 during the year ended December 31, 2013 resulting from the payments of our
outstanding notes payable of $99,021, partially offset by capital contributions of $28,500.



As
of December 31, 2014, we had cash of $787,238 and accounts receivable of $330,538. Our current liabilities of $1,399,652 exceeded
our current assets of $1,126,164 primarily due to the note payable balance of $474,837 (net of discounts) due to the seller of
Loyalty Staffing Services (“Loyalty”) being presented as a current liability while the terms are being renegotiated.
Until a settlement has been reached, the outstanding balances have been presented as a current liability.





11







ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not
applicable for smaller reporting companies.



ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



FIRST
RATE STAFFING CORPORATION

CONSOLIDATED
FINANCIAL STATEMENTS

December
31, 2014 and 2013



INDEX
TO FINANCIAL STATEMENTS



|Report of Independent Registered Public Accounting Firm                                              | 13
|---------------------------------------------------------------------------------------------------- | --
|Consolidated Balance Sheets as of December 31, 2014  and December 31, 2013                           | 14
|Consolidated Statements of Operations for the Years Ended December 31, 2014 and 2013                 | 15
|Consolidated Statement of Changes in Stockholders’ Equity (Deficit) as of December 31, 2014 and 2013 | 16
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013                 | 17
|Notes to Consolidated Financial Statements                                                           | 18



12













REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors
and Shareholders of



First Rate Staffing Corporation:



We
have audited the accompanying consolidated balance sheets of First Rate Staffing Corporation (the “Company”) as of
December 31, 2014 and 2013, and the related consolidated statements of operations, changes in shareholders’ equity (deficit),
and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In
our opinion, the consolidated financial statements referred to the above present fairly, in all material respects, the consolidated
financial position of First Rate Staffing Corporation as of December 31, 2014 and 2013, and the consolidated results of their operations
and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As
described in the Note 4 to the consolidated financial statements, the Company has incurred an accumulated deficit from inception
to December 31, 2014. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s
plans in regard to this matter are also described in Note 4. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



/s/ Anton & Chia,
LLP



Newport Beach, California



March 31, 2015





13







|FIRST
    RATE STAFFING CORPORATION
|-----------------------------------
|CONSOLIDATED
    BALANCE SHEETS    





|                                                                                                                                                                 |  | December 31, |           |   | December 31, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ------------ | -
|                                                                                                                                                                 |  | 2014         |           |   | 2013         |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Assets                                                                                                                                                           |  |              |           |   |              |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Current assets                                                                                                                                                   |  |              |           |   |              |  
|Cash                                                                                                                                                             |  | $            | 787,238   |   |              | $
|Accounts receivable                                                                                                                                              |  |              | 330,538   |   |              |  
|Prepaid expenses                                                                                                                                                 |  |              | -         |   |              |  
|Notes receivable - related party, current portion                                                                                                                |  |              | 8,388     |   |              |  
|Total current assets                                                                                                                                             |  |              | 1,126,164 |   |              |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Property and equipment, net                                                                                                                                      |  |              | 19,823    |   |              |  
|Notes receivable - related party, net of current portion                                                                                                         |  |              | -         |   |              |  
|Intangible assets, net                                                                                                                                           |  |              | 1,206,429 |   |              |  
|Deposits and other assets                                                                                                                                        |  |              | 6,200     |   |              |  
|Total assets                                                                                                                                                     |  | $            | 2,358,616 |   |              | $
|                                                                                                                                                                 |  |              |           |   |              |  
|Liabilities and Stockholders' Equity (Deficit)                                                                                                                   |  |              |           |   |              |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Current liabilities                                                                                                                                              |  |              |           |   |              |  
|Accounts payable                                                                                                                                                 |  | $            | 385,571   |   |              | $
|Other current liabilities                                                                                                                                        |  |              | 534,735   |   |              |  
|Notes payable, net of discount                                                                                                                                   |  |              | 474,837   |   |              |  
|Notes payable - related parties, current portion                                                                                                                 |  |              | 4,509     |   |              |  
|Total current liabilities                                                                                                                                        |  |              | 1,399,652 |   |              |  
|Notes payable - related parties, net of current portion                                                                                                          |  |              | -         |   |              |  
|Total liabilities                                                                                                                                                |  |              | 1,399,652 |   |              |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Commitments and contingencies                                                                                                                                    |  |              |           |   |              |  
|                                                                                                                                                                 |  |              |           |   |              |  
|Stockholders' equity (deficit)                                                                                                                                   |  |              |           |   |              |  
|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 and 7,000,000 shares issued and authorized at December 31, 2014 and 2013, respectively |  |              | 750       |   |              |  
|Additional paid-in capital                                                                                                                                       |  |              | 1,089,802 |   |              |  
|Accumulated deficit                                                                                                                                              |  |              | (131,588  | ) |              |  
|Total stockholders' equity (deficit)                                                                                                                             |  |              | 958,964   |   |              |  
|Total liabilities and stockholders' equity (deficit)                                                                                                             |  | $            | 2,358,616 |   |              | $





The accompanying notes are an integral part of these consolidated financial statements







14









|FIRST RATE STAFFING CORPORATION          
|-----------------------------------------
|CONSOLIDATED
    STATEMENTS OF OPERATIONS





|                                     |  | Year Ended   |           
|------------------------------------ |  | ------------ | ----------
|                                     |  | December 31, |           
|                                     |  | 2014         |           
|                                     |  |              |           
|Revenues                             |  | $            | 18,003,628
|Cost of revenues                     |  |              | 16,137,224
|Gross profit                         |  |              | 1,866,404 
|Operating expenses                   |  |              | 1,604,707 
|Income (loss) from operations        |  |              | 261,697   
|Interest and other expense, net      |  |              | 185,255   
|Income (loss) before income tax      |  |              | 76,442    
|Income tax expense                   |  |              | 66,676    
|Net income (loss)                    |  | $            | 9,766     
|                                     |  |              |           
|                                     |  |              |           
|Net income (loss) per share:         |  |              |           
|Basic and diluted                    |  | $            | -         
|                                     |  |              |           
|Weighted average shares outstanding: |  |              |           
|Basic and diluted                    |  |              | 7,442,466 





The accompanying notes are an integral part of these consolidated financial statements







15









|FIRST RATE STAFFING CORPORATION                            
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES
        IN STOCKHOLDERS’
|EQUITY (DEFICIT)                                           





|                                        |  |                 |   |  |              |   |   |         |  |  |           |  |  | Additional |     |  | Accumulated |   |           |       | 
|--------------------------------------- |  | --------------- | - |  | ------------ | - | - | ------- |  |  | --------- |  |  | ---------- | --- |  | ----------- | - | --------- | ----- | 
|                                        |  | Preferred Stock |   |  | Common Stock |   |   | Paid-in |  |  | Earnings  |  |  |            |    
|                                        |  | Shares          |   |  | Amount       |   |   | Shares  |  |  | Amount    |  |  | Capital    |     |  | (Deficit)   |   |           | Total | 
|                                        |  |                 |   |  |              |   |   |         |  |  |           |  |  |            |     |  |             |   |           |       | 
|Balance, December 31, 2012              |  |                 | - |  |              | $ | - |         |  |  | 7,000,000 |  |  | $          | 700 |  |             | $ | 61,352    |       | 
|                                        |  |                 |   |  |              |   |   |         |  |  |           |  |  |            |     |  |             |   |           |       | 
|Contribution by stockholder             |  |                 | - |  |              |   | - |         |  |  | -         |  |  |            | -   |  |             |   | 28,500    |       | 
|Net
    loss                            |  |                 | - |  |              |   | - |         |  |  | -         |  |  |            | -   |  |             |   | -         |       | 
|Balance, December 31, 2013              |  |                 | - |  |              |   | - |         |  |  | 7,000,000 |  |  |            | 700 |  |             |   | 89,852    |       | 
|                                        |  |                 |   |  |              |   |   |         |  |  |           |  |  |            |     |  |             |   |           |       | 
|Common stock issued
    for acquisition |  |                 | - |  |              |   | - |         |  |  | 500,000   |  |  |            | 50  |  |             |   | 999,950   |       | 
|Net
    income                          |  |                 | - |  |              |   | - |         |  |  | -         |  |  |            | -   |  |             |   | -         |       | 
|Balance, December 31, 2014              |  |                 | - |  |              | $ | - |         |  |  | 7,500,000 |  |  | $          | 750 |  |             | $ | 1,089,802 |       | 





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







16











|FIRST RATE STAFFING
    CORPORATION      
|-----------------------------------------
|CONSOLIDATED
    STATEMENTS OF CASH FLOWS





|                                                                                                   |  | Year Ended   |          
|-------------------------------------------------------------------------------------------------- |  | ------------ | ---------
|                                                                                                   |  | December 31, |          
|                                                                                                   |  | 2014         |          
|                                                                                                   |  |              |          
|Cash flows from operating activities                                                               |  |              |          
|Net income (loss)                                                                                  |  | $            | 9,766    
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |              |          
|Depreciation and amortization expense                                                              |  |              | 266,098  
|Amortization of discount on note payable                                                           |  |              | 30,474   
|Changes in operating assets and liabilities:                                                       |  |              |          
|Accounts receivable                                                                                |  |              | (176,508 
|Prepaid expenses                                                                                   |  |              | 67,484   
|Deposits and other assets                                                                          |  |              | 80       
|Accounts payable                                                                                   |  |              | 327,912  
|Other current liabilities                                                                          |  |              | 359,487  
|                                                                                                   |  |              |          
|Net cash provided by (used in) operating activities                                                |  |              | 884,793  
|                                                                                                   |  |              |          
|                                                                                                   |  |              |          
|Cash flows from investing activities                                                               |  |              |          
|Borrowings on notes receivable - related party                                                     |  |              | -        
|Payments from acquisition of property and equipment                                                |  |              | -        
|                                                                                                   |  |              |          
|Net cash used in investing activities                                                              |  |              | -        
|                                                                                                   |  |              |          
|Cash flows from financing activities                                                               |  |              |          
|Payments on note payable - related party                                                           |  |              | (151,598 
|Capital contributions                                                                              |  |              | -        
|                                                                                                   |  |              |          
|Net cash used in financing activities                                                              |  |              | (151,598 
|                                                                                                   |  |              |          
|Net change in cash                                                                                 |  |              | 733,195  
|Cash, beginning of the year                                                                        |  |              | 54,043   
|Cash, end of the year                                                                              |  | $            | 787,238  
|                                                                                                   |  |              |          
|Supplemental disclosure of cash flow information:                                                  |  |              |          
|Interest paid                                                                                      |  | $            | 1,630    
|Income taxes paid                                                                                  |  |              | -        
|                                                                                                   |  |              |          
|Supplemental disclosures of non-cash investing and financing transactions:                         |  |              |          
|Issuance of common stock for acquisition of Loyalty Staffing Services, Inc.                        |  | $            | 1,000,000
|Issuance of note payable for acquisition of Loyalty Staffing Services, Inc.                        |  | $            | 500,000  





The accompanying notes are an integral part of these consolidated financial statements







17







|FIRST RATE STAFFING
    CORPORATION           
|----------------------------------------------
|NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS



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 financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America (“GAAP”), and include all the notes required by generally accepted accounting principles
for complete financial statements.



The consolidated financial statements include the accounts of
the Company and Loyalty Staffing Services, Inc. All significant intercompany transactions have been eliminated in consolidation.



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.



Reclassifications



Certain
prior year amounts have been reclassified to conform with the current year presentation.  The reclassifications have
not impacted the previously reported results of operations or total assets, liabilities or stockholders’ equity (deficit).



Cash



The
Company considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of December 31, 2014 or 2013.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 December 31, 2014, the Company had $537,238 of balances that exceeded the FDIC insurance limits.





18







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 as of December 31, 2014 and 2013 was $0.



During 2012, the Company entered into a
new 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 non-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 $1,824,376
and $756,718 at December 31, 2014 and 2013, respectively.



Business
Acquisitions



The Company has accounted for its business
acquisitions in accordance with Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) No. 805, Business Combinations.Assets acquired and liabilities
assumed are recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets
are based on valuations using the income approach. The excess of the purchase price, if any, over the tangible assets, identifiable
intangible assets and assumed liabilities, is recorded as goodwill.



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 amortized over their estimated useful lives of 5 years using the straight-line method, which represents the economic benefit
pattern of the intangible assets.



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 presented on the Consolidated Balance Sheets at fair value on a recurring basis using significantly unobservable inputs (Level 3) as of December 31, 2014 or 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





19







The Company has determined that the book value of its outstanding
financial instruments as of December 31, 2014 and 2013 is the approximate fair value.



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 results in the
period that such determination was made.



Revenue
Recognition



The
Company’s revenue is derived from providing temporary staffing services to its clients. The Company recognizes revenue in
accordance with FASB ASC No. 605, Revenue Recognition. 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 (loss) 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 (loss) per share reflect per share amounts that would have resulted if diluted potential common stock
had been converted to common stock.  There have been no common stock equivalents included in the diluted earnings per
share computation for the years ended December 31, 2014 or 2013 as the amounts are anti-dilutive.



Income Taxes



The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. Accordingly,
deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances
are established when it is more likely than not that some or all of the deferred tax assets will not be realized.



ASC
740 also clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to
meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification,
interest and penalties, accounting in interim periods, disclosure and transition. We believe that our income tax filing positions
and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial
position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, we did
not record a cumulative effect adjustment related to the adoption of ASC 740. Our policy for recording interest and penalties associated
with income-based tax audits is to record such items as a component of income taxes.





20







Recent Accounting
Pronouncements



In May 2014, the FASB issued Accounting
Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 creates a new
topic in the ASC Topic 606 and establishes a new control-based revenue recognition model, changes the basis for deciding when revenue
is recognized over time or at a point in time, provides new and more detailed guidance on specific topics, and expands and improves
disclosures about revenue. In addition, ASU 2014-09 adds a new Subtopic to the Codification, ASC 340-40, Other Assets and Deferred
Costs: Contracts with Customers, to provide guidance on costs related to obtaining a contract with a customer and costs incurred
in fulfilling a contract with a customer that are not in the scope of another ASC Topic. The guidance in ASU 2014-09 is effective
for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein. Early application
is not permitted. Management is in the process of assessing the impact of ASU 2014-09 on the Company’s financial statements.



4.
GOING CONCERN



The Company has an accumulated deficit
of $131,588 since inception. This accumulated deficit is primarily the result of increased operating expenses during 2012 associated
with professional fees necessary to complete its merger transaction in November 2012, as well as revenues being at below break-even
levels. Going forward, the Company expects these annual expenses to be lower. In addition, on February 11,2014, the
Company also acquired substantially all of the assets 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’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.



5.
PROPERTY AND EQUIPMENT



Property
and equipment consisted of the following as of December 31, 2014 and 2013.





|                               |  | December 31, |        |  | December 31, |  
|------------------------------ |  | ------------ | ------ |  | ------------ | -
|                               |  | 2014         |        |  | 2013         |  
|                               |  |              |        |  |              |  
|Furniture and equipment        |  | $            | 5,658  |  |              | $
|Vehicles                       |  |              | 28,000 |  |              |  
|                               |  |              | 33,658 |  |              |  
|                               |  |              |        |  |              |  
|Less: accumulated depreciation |  |              | 13,835 |  |              |  
|                               |  |              |        |  |              |  
|                               |  | $            | 19,823 |  |              | $





Depreciation
expense for the years ended December 31, 2014 and 2013 amounted to $6,660 and $6,439, respectively.





21







6. ACQUISITION



On February 11, 2014, the Company entered
into an agreement to purchase the assets 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 is payable as follows; 1) $50,000 of the purchase price will be paid
within five days of the release of certain Uniform Commercial Code liens and personal guarantees, 2) an additional $50,000 will
be paid sixty days from the date of such release, 3) the Company has 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 seller has the option of converting
all or any part of the $400,000 promissory note balance into the Company's common stock at the then prevailing trading price or
market value at the time of closing of the agreement or $2 per share. The Seller has agreed to a reduction in the promissory note
of an amount equal to 5% of $1,500,000 and a return of common stock of an amount equal to 2.5% of $1,500,000 for every reduction
of $1,500,000 in annual revenues generated by the loss a client or clients acquired as part of the asset agreement within 12 months
from the closing date.



The
Company is currently 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 parties are currently negotiating in good faith to resolve.
The Company expects this settlement to occur during the second quarter of 2015.



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 excess of the purchase price over the tangible assets, identifiable intangible
assets and assumed liabilities was recorded as goodwill.



The purchase price allocation was allocated as follows:





|Recognized amounts of identifiable assets acquired
|--------------------------------------------------
|and liabilities assumed, at fair value            
|                                                  
|Intangible assets                                 
|Accounts payable                                  
|                                                  





Intangible assets acquired represented
customer relationships which have an estimated useful life of 5 years. The estimated useful life is based on the patterns in which
the economic benefits related to such assets are expected to be realized.



Amortization expense for intangible assets
amounted to $259,438 and $0 for the years ended December 31, 2014 and 2013, respectively. Estimated future amortization of intangible
assets is as follows.





22









|Year Ended   |      |  |  |  
|------------ | ---- |  |  | -
|December 31, |      |  |  |  
|             | 2015 |  |  | $
|             | 2016 |  |  |  
|             | 2017 |  |  |  
|             | 2018 |  |  |  
|             | 2019 |  |  |  
|             |      |  |  | $





The amount of Loyalty’s revenue and earnings included
in the Company’s consolidated statement of operations for the year ended December 31, 2014, and the revenue and earnings
of the combined entity had the acquisition date been January 1, 2013 are as follows. The pro forma information includes the effects
of amortization of intangibles arising from the transaction, as well as interest expense from the note payable issued to the seller.
The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the
transactions been effected on the assumed dates.





|                                                   |  | Revenues |            |  | Earnings (Loss) |  
|-------------------------------------------------- |  | -------- | ---------- |  | --------------- | -
|                                                   |  |          |            |  |                 |  
|Actual from February 11, 2014 to December 31, 2014 |  | $        | 7,005,170  |  |                 | $
|                                                   |  |          |            |  |                 |  
|2014 supplemental pro forma (unaudited) from       |  |          |            |  |                 |  
|January 1, 2014 to December 31, 2014               |  | $        | 18,922,592 |  |                 | $
|                                                   |  |          |            |  |                 |  
|2013 supplemental pro forma (unaudited) from       |  |          |            |  |                 |  
|January 1, 2013 to December 31, 2013               |  | $        | 17,120,089 |  |                 | $





7.
NOTE RECEIVABLE – RELATED PARTY



In
March 2013, the Company issued a series of unsecured notes receivable to an officer of the Company. The borrowings are due in one
lump payment in March 2015 and earn interest at a rate of 15% per annum. As of December 2014 and 2013, the note receivable balance
was $8,388.



8.
DEPOSITS AND OTHER ASSETS



Deposits
and other assets consisted of the following as of December 31, 2014 and 2013.





|                                      |  | December 31, |      
|------------------------------------- |  | ------------ | -----
|                                      |  | 2014         |      
|Deposit on office lease and utilities |  |              | 3,200
|Other                                 |  |              | 3,000
|Total                                 |  | $            | 6,200







23







9.
SHAREHOLDERS’ EQUITY (DEFICIT)



The
Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of December 31,
2014 and 2013, 7,500,000 and 7,000,000 shares of common stock, respectively, were issued and outstanding. There was no preferred
stock were issued or outstanding as of December 31, 2014 or 2013.



During
the year ended December 31, 2013, Cliff Blake, the Chief Executive Officer and sole director of the Company, made a capital contribution
of $28,500 to the Company.



During
the year ended December 31, 2014, the Company issued 500,000 shares of common stock in connection with the acquisition of Loyalty
(see Note 6).



10.
NOTES PAYABLE - RELATED PARTY



During 2012, the Company obtained unsecured
promissory notes payable from one of its shareholders on various dates between March 2012 and December 2012. The total aggregate
amounts outstanding amounted to $4,509 and $156,107 as of December 31, 2014 and 2013, respectively. The notes bear interest at
a rate of 6% per annum and are due in full in one lump payment 3 years from the issuance dates. The remaining outstanding balances
are all due in December 2015. There are no financial covenant requirements under the notes.



11. NOTES PAYABLE – ACQUISITION



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





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | December 31, |        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | 2014         |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              |        
|Cash payments due to the seller of Loyalty within 60 days UCC and personal guarantee releases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $            | 100,000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |              |        
|Promissory Note due to seller - Payable in four payments of $75,000 every 6 months after the closing date, with a remaining and final payment of $100,000 made at 30 months from the closing date.  The note bears no interest and can be converted into shares of the company's common stock at any time at the prevailing trade price or the stock price at the closing of the transaction, which amounted to $2 per share.  The Company is currently in default under the terms of the note due to a dispute with the debt holder, and the terms are in the process of being renegotiated (see Note 13).  Until a settlement has been reached, the outstanding balances on the note have been presented as current liabilties. |  |              | 400,000
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | $            | 500,000





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 year ended December 31, 2014, amortization of the discount amounted to $30,474. As of December 31, 2014, the note payable
is presented net of a discount of $25,163. The note has not been paid due to an internal issue and the Company is currently in
the process of renegotiating the terms of the outstanding notes.





24







12.
INCOME TAXES



The components of the
provision for income taxes are summarized as follows for the years ended December 31:



|               |  | 2014 |        |  | 2013 |  
|-------------- |  | ---- | ------ |  | ---- | -
|               |  |      |        |  |      |  
|Current        |  |      |        |  |      |  
|Federal        |  | $    | 52,529 |  |      | $
|State          |  |      | 14,147 |  |      |  
|Total current  |  |      | 66,676 |  |      |  
|               |  |      |        |  |      |  
|Deferred       |  |      |        |  |      |  
|Federal        |  |      | -      |  |      |  
|State          |  |      | -      |  |      |  
|Total deferred |  |      | -      |  |      |  
|Total          |  | $    | 66,676 |  |      | $



Significant components
of deferred income tax assets and liabilities are as follows:



|                                 |  | 2014 |         |   | 2013 |  
|-------------------------------- |  | ---- | ------- | - | ---- | -
|                                 |  |      |         |   |      |  
|Net operating loss carryforwards |  | $    | -       |   |      | $
|State income taxes               |  |      | 3,837   |   |      |  
|Depreciation and amortization    |  |      | 72,072  |   |      |  
|Other                            |  |      | -       |   |      |  
|Total, net                       |  |      | 75,909  |   |      |  
|Valuation allowance              |  |      | (75,909 | ) |      |  
|Deferred tax assets, net         |  | $    | -       |   |      | $



At
December 31, 2014, the Company had utilized its Federal and State net operating loss carryforwards ("NOL") available
to offset future taxable income.



The
Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the
deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to
be more likely than not. Management considers many factors when assessing the likelihood of future realization of the Company's
deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable
income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.



At
December 31, 2014 and 2013, based on the weight of available evidence, management determined that it was unlikely that the Company's
deferred tax assets would be realized and have provided for a full valuation allowance associated with the net deferred tax assets.



The
Company periodically analyzes its tax positions taken and expected to be taken and has determined that since inception there has
been no need to record a liability for uncertain tax positions. The Company classifies income tax penalties and interest, if any,
as part of selling, general and administrative expenses in the accompanying consolidated statements of operations. There was no
accrued interest or penalties as of December 31, 2014 or 2013.



The
Company is neither under examination by any taxing authority, nor has it been notified of any impending examination. The Company's
tax years for its Federal and State jurisdictions which are currently open for examination are the years of 2011 - 2014.





25







13.
COMMITMENTS AND CONTINGENCIES



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 office located in Santa Fe Springs, California under a non-cancellable
operating lease extending through January 2018.



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





|      |  | Year Ended   |       
|----- |  | ------------ | ------
|      |  | December 31, |       
|      |  |              |       
|2015  |  | $            | 13,872
|2016  |  |              | 13,872
|2017  |  |              | 13,872
|2018  |  |              | 1,156 
|Total |  | $            | 42,772





Litigation



The
Company is currently 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 parties are currently negotiating in good faith to resolve.
The Company expects this settlement to occur during the second quarter of 2015. Management does not anticipate any material adverse
impacts from this dispute, and any gain will be recorded upon the finalization of a settlement.



During
the ordinary course of the Company’s business, it is subject to various claims and litigation. The Company settled an open
claim involving a former employee in 2013 for $35,625. As of December 31, 2014 and 2013, all obligations have been fulfilled by
the Company.



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



Not
applicable.



ITEM
9A. CONTROLS AND PROCEDURES



Disclosure Controls
and Procedures



We maintain disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the
Exchange Act, that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded,
processed, summarized and reported within the time periods specified in the Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our principal executive officer and our principal financial and accounting
officer, as appropriate, to allow timely decisions regarding required disclosure.



We carried out an evaluation
under the supervision and with the participation of our management, including our principal executive officer and principal financial
and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) as of the end of the period covered by this Annual Report. Based on this evaluation, we concluded that
our disclosure controls and procedures were effective as of December 31, 2014.





26







Internal Control
Over Financial Reporting



Our internal control over
financial reporting is designed 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. Our internal control
over financial reporting includes those policies and procedures that:



| | · | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.



Changes in Internal
Control Over Financial Reporting



There
were no changes in our internal control over financial reporting during the year ended December 31, 2014 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



Management's Report
on Internal Control Over Financial Reporting



The
Company’s management 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
December 31, 2014, 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 December 31, 2014, 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.



Anton
& Chia LLP, the independent registered public accounting firm, has not issued an attestation report on the effectiveness of
the internal control over financial reporting.





27









PART
III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE



The
following table sets forth information regarding the members of the Company’s board of directors, officers and management.



|Name          | Age | Position                             | Year Commenced with
    Company
|------------- | --- | ------------------------------------ | -------------------------------
|              |     |                                      |                                
|Cliff Blake   | 60  | Chief Executive Officer and Director | 2012                           
|Devon Galpin  | 36  | Chief Operating Officer              | 2012                           
|Michael Mautz | 48  | Vice President of Risk Management    | 2012                           
|Joy Mautz     | 39  | Vice President of Finance            | 2012                           
|Julie Galpin  | 37  | Assistant Secretary                  | 2012                           



Explanatory
Note



The
Company’s officers and directors were previously employed by Easy Staffing Services Inc. (formerly known as Excel Staffing
Service, Inc. prior to 2008). In March of 2009, Lumea, Inc. purchased Easy Staffing Services Inc. Mr. Blake was retained as President
and CEO of Easy Staffing Services Inc. by Lumea, Inc. The entity Lumea, Inc. was a subsidiary of Green Planet Group, Inc. The President
and CEO of Green Planet Group, Inc., and its Chief Financial Officer, retained the full financial control of Lumea, Inc. after
the acquisition of Easy Staffing Services Inc. by Lumea, Inc.



Mr.
Blake resigned from his employment with Easy Staffing Services Inc. in April 2010 after suspecting that the Lumea entities were
not properly paying certain tax obligations. Mr. Blake was also concerned that Lumea, Inc. had defaulted on promissory notes due
to Easy Staffing Services Inc. in March 2010. Under the advice of legal counsel and the consideration of these factors, Mr. Blake
believed that it was prudent for him to resign. Each of the other officers and directors of the Company thereafter resigned from
their employment with Easy Staffing Services Inc. based on factors similar to those prompting Mr. Blake to resign (including that
customers of Lumea, Inc. and its affiliates began learning in 2010 about the potential tax problems, and these customers were accordingly
terminating their respective relationships with Lumea, Inc. and its affiliates).



Other
than Mr. Blake, no other officer or director of the Company was party to any employment agreement with Lumea, Inc. or any of its
affiliated entities. Mr. Blake was a party to any employment agreement with Lumea, Inc. and its affiliated entities, but such agreement
was terminated when Mr. Blake resigned in 2010. A non-compete clause in Mr. Blake’s employment agreement expired on April
30, 2012.



Prior
to, and during, 2012, Lumea, Inc. and its affiliates threatened and pursued civil litigation against Mr. Blake. However, at present,
no such litigation against Mr. Blake is pending or threatened, and Lumea, Inc. filed for bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code on August 17, 2011 and dissolved all of its operations in August 2012. There are no pending or threatened legal
actions against Mr. Blake or the Company arising from or related to Lumea, Inc. or any of its affiliated entities.



Cliff
Blake



Cliff
Blake serves as Chief Executive Officer, President, official Secretary and Treasurer of the Company, and is the sole director of
the Company. Mr. Blake has over 22 years of experience in business and management, including in starting, building and operating
numerous businesses, including over 12 years in owning and operating staffing businesses. Mr. Blake founded and built his own staffing
company, Easy Staffing Services, Inc. (formerly known as Excel Staffing Service, Inc. prior to 2008), based in Scottsdale, Arizona,
in 1999, and he served as its President and CEO from 1999 to 2009. Through the direction of Mr. Blake, the company started with
an idea and was built in to a successful company employing over 50 internal employees and thousands of more temporary employees.
The company was a major competitor in several states across the United States with ending annual revenues of over $104 million
in 2009. The company was sold in 2009. From March 2009 to April 2010, Mr. Blake was employed as President and CEO of Easy Staffing
Services, Inc. by Lumea, Inc., which acquired Easy Staffing Services, Inc. (formerly known as Excel Staffing Service, Inc. prior
to 2008). From May 2010 to 2012 (when Mr. Blake joined the Company as an officer and director), Mr. Blake was self-employed. During
this time, Mr. Blake conducted research on the staffing marketplace and helped design the business plan and model for the Company.
Mr. Blake also provided advice and consultation (including with respect to workers’ compensation insurance, sales and marketing
,customer targeting and retention, risk management techniques, accounts receivable management, financing strategies and options,
data processing, staffing industry relationships and operational management) to each of First Rate California and First Rate Nevada,
respectively, and prepared the Company and these entities for potential merger and acquisition and going-public transactions. Mr.
Blake was not directly employed by, or an officer or director of, First Rate Staffing, Inc. or First Rate Staffing LLC; however,
he served as a valuable business advisor and consultant for these entities from 2010 to 2012. Mr. Blake did not receive any monetary
compensation for his advisory role with First Rate Staffing, Inc. and First Rate Staffing LLC, however, he was provided with health
care benefits. Mr. Blake received a Bachelor of Science degree from Louisiana Tech University in 1974 and a Master of Business
Administration degree in Finance from Florida State University in 1975.





28







Devon
Galpin



Devon
Galpin serves as Chief Operating Officer of the Company. Mr. Galpin supervises all operations of these entities, which includes
all office locations, recruiting, internal staffing, order fulfillment, payroll, invoicing compliance, along with client management.
Mr. Galpin served in the staffing industry since 2004 holding positions beginning in August 2005 at Easy Staffing Services, Inc.
(formerly known as Excel Staffing Service, Inc. prior to 2008). Mr. Galpin joined Lumea Staffing of California, Inc. in March 2009
in sales, account management and operations. At the time he left Easy Staffing Services, Inc. and Lumea Staffing of California,
Inc. in April 2010, Mr. Galpin oversaw the operations and management of $30 million is staffing business encompassing California
and Arizona. In 2010, Mr. Galpin was a co-founder and officer of each of First Rate California and First Rate Nevada, respectively,
a position in which he served until those entities merged into the Company. Upon such merger in 2012, Mr. Galpin became a part
of the management of the Company. Mr. Galpin worked hand in hand with all senior members of his company to procure business and
develop better operations for current and future clients. Mr. Galpin was also in charge of overseeing all payroll matters, delegating
and hiring/terminating positions, evaluating profitability of clients, and accounts renewals. Mr. Galpin received a Bachelor of
Arts degree in Political Science from Chapman College.



Michael
Mautz



Michael
Mautz serves as Vice President of Risk Management for the Company. Mr. Mautz supervises all risk management activities of these
entities, including the worker’s compensation program of the companies. Mr. Mautz is an OSHA-certified risk manager. Mr.
Mautz has been involved in the staffing industry for 12 years with his primary focus on risk management and loss prevention. His
previous tenure with rapidly growing staffing companies, Easy Staffing Services, Inc. (formerly known as Excel Staffing Service,
Inc. prior to 2008) and Lumea Staffing Inc., allowed him to gain critical knowledge on how to grow a business in a safe and productive
manner. Because of the steady growth of the company, the risk management department had to be very aggressive and effectively design
programs that protected the employees, thereby creating a more profitable business environment for the company. Mr. Mautz was with
Easy Staffing Services, Inc. (formerly known as Excel Staffing Service, Inc. prior to 2008) and Lumea Staffing Inc. from Janury
2004 to April 2010, just prior to Mr. Mautz becoming a co-founder and officer of each of First Rate California and First Rate Nevada,
respectively, a position in which he served until those entities merged into the Company. Upon such merger in 2012, Mr. Mautz became
a part of the management of the Company. During his time at Easy Staffing Services, Inc. (January 2004 to March 2009), Mr. Mautz
served first as a staffing coordination, then as a risk manager and later as a loss prevention specialist. Mr. Mautz continued
in his capacity as a loss prevention specialist with Lumea Staffing, Inc. from March 2009 to April 2010.



Joy
Mautz



Joy
Mautz serves as Vice President of Finance for the Company. Ms. Mautz heads all accounting functions, including cash flow management,
state and federal tax compliance, financial modeling, forecasting and Sarbanes-Oxley compliance. Ms. Mautz has served in the staffing
industry since 2005 holding positions as Controller and Assistant Controller of private and public companies, including Easy Staffing
Services, Inc. (formerly known as Excel Staffing Service, Inc. prior to 2008) during the period June 2005 to March 2010. Ms. Mautz
was employed by Lumea Staffing, Inc. as an accountant from 2009 to 2012, after Lumea Staffing, Inc. acquired Excel Staffing Services,
Inc. As Assistant Controller and Controller, she worked with the daily cash management and treasury management for a multitude
of business accounts. She worked directly with all banking relationship managers and directly with funding companies preparing
daily funding requests and other daily and quarterly reports. Ms. Mautz assisted outside auditors with audit processes for private
and public companies. She performed cash flow analysis, monthly financial statements and other miscellaneous management ad hoc
reports. She analyzed business performance to maximize operations and prepared budgets, payroll, and cash flow reports. Also, Ms.
Mautz performed monthly reconciliations for all bank accounts for management and for auditing purposes, and she researched and
resolved any out of balances. Ms Mautz managed accounts receivables and made collection calls when needed. She also assisted with
accounts payable and provided solutions to any deficiencies. In 2010, Ms. Mautz was a co-founder and officer of each of First Rate
California and First Rate Nevada, respectively, a position in which she served until those entities merged into the Company. Upon
such merger in 2012, Ms. Mautz became a part of the management of the Company. Ms. Mautz received a Bachelor of Arts degree from
the California State University at Fullerton in 2004.





29







Julie
Galpin



Julie
Galpin serves as Assistant Secretary for the Company. In this capacity, she also performs accounting and finance duties for these
companies. For the past several years, Ms. Galpin has worked in similar accounting roles and capacities, including at Easy Staffing
Services, Inc. (formerly known as Excel Staffing Service, Inc. prior to 2008), where she worked during the period April 2008 to
April 2010. Ms. Galpin has served in the staffing industry since 2005, holding the position of accounting manager. In 2010, Ms.
Galpin was a co-founder and officer of each of First Rate California and First Rate Nevada, respectively, a position in which he
served until those entities merged into the Company. Upon such merger in 2012, Ms. Galpin became a part of the management of the
Company. Her skills are in accounts receivables, reconciliations, and banking relationships. Ms. Galpin received a Bachelor of
Arts degree in Psychology from the University of California, Irvine in 2005.



Director
Independence



Pursuant
to Rule 4200 of The NASDAQ Stock Market one of the definitions of an independent director is a person other than an executive officer
or employee of a company. The Company's board of directors has reviewed the materiality of any relationship that each of the directors
has with the Company, either directly or indirectly. Based on this review, the board has determined that there are no independent
directors.



Corporate
Governance



The
Company does not have a nominating nor audit committee of the board of directors. The board of directors consists of one director.
At such time that the Company has a larger, board of directors and commences activities, the Company will propose creating committees
of its board of directors, including both a nominating and an audit committee.



Conflicts
of Interest



There
are no binding guidelines or procedures for resolving potential conflicts of interest. Failure by management to resolve conflicts
of interest in favor of the Company could result in liability of management to the Company. However, any attempt by shareholders
to enforce a liability of management to the Company would most likely be prohibitively expensive and time consuming.



Code
of Ethics



The
Company has not at this time adopted a Code of Ethics pursuant to rules described in Regulation S-K. The Company intends to adopt
a Code of Ethics to provide a manner of conduct.





30







ITEM
11. EXECUTIVE COMPENSATION



Remuneration
of Officers: Summary Compensation Table





|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  | Aggregate    |  |  |  |       |  |  |  |         |  |  |  | All       |  |  |  |          |  |  |  | Annual  | 
|------------------- |  |  | ---- |  |  | - | ------ |  |  | - | -------- |  |  |  | ------------ |  |  |  | ----- |  |  |  | ------- |  |  |  | --------- |  |  |  | -------- |  |  |  | ------- | 
|                    |  |  |      |  |  |   | Annual |  |  |   | Annual   |  |  |  | Accrued      |  |  |  |       |  |  |  | Stock   |  |  |  | Comp-     |  |  |  | Other    |  |  |  | Compen- | 
|                    |  |  |      |  |  |   | Earned |  |  |   | Payments |  |  |  | Salary Since |  |  |  |       |  |  |  | and     |  |  |  | -ensation |  |  |  | Comp     |  |  |  | sation  | 
|Name/Position       |  |  | Year |  |  |   | Salary |  |  |   | Made     |  |  |  | Inception    |  |  |  | Bonus |  |  |  | Options |  |  |  | Plans     |  |  |  | ensation |  |  |  | Total   | 
|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Cliff Blake         |  |  | 2014 |  |  | $ | 0      |  |  | $ | 0        |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|CEO and Director    |  |  | 2013 |  |  | $ | 0      |  |  | $ | 0        |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Devon Galpin        |  |  | 2014 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|COO                 |  |  | 2013 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Michael Mautz       |  |  | 2014 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Vice President      |  |  | 2013 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Joy Mautz           |  |  | 2014 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Vice President      |  |  | 2013 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|                    |  |  |      |  |  |   |        |  |  |   |          |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Julie Galpin        |  |  | 2014 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 
|Assistant Secretary |  |  | 2013 |  |  | $ | 44,200 |  |  | $ | 44,200   |  |  |  |              |  |  |  |       |  |  |  |         |  |  |  |           |  |  |  |          |  |  |  |         | 



The
officers noted above also received profits participation and earnings from their ownership interest in the equity of each of First
Rate California and First Rate Nevada; as such profits participation and earnings represent returns to these officers by virtue
of their equity ownership of these businesses, any such profits participation are not reflected in the table above.



As
of December 31, 2014, there was no accrued compensation that was due to the Company’s employees or officers. Upon successful
completion by the Company of a primary public offering in the future (or the completion of other financing or funding), however,
the Company may compensate officers and employees as is discussed below in “Anticipated Officer and Director Remuneration.”



Each
of the officers has received certain shares of common stock in the Company in connection with the change of control of the Company
and/or the mergers. Accordingly, the Company has not recorded any compensation expense in respect to any shares issued to the officers
as such shares do not represent compensation that was paid to any officer.



There
are no current plans to pay or distribute any cash or non-cash bonus compensation to officers of the Company, until such time as
the Company is profitable, experiences positive cash flow or obtains additional financing. However, the Board of Directors may
allocate salaries and benefits to the officers in its sole discretion. No officer is subject to a compensation plan or arrangement
that results from his or her resignation, retirement, or any other termination of employment with the Company or from a change
in control of the company or a change in his or her responsibilities following a change in control. The members of the Board of
Directors may receive, if the Board so decides, a fixed fee and reimbursement of expenses, for attendance at each regular or special
meeting of the Board, although no such program has been adopted to date. The Company currently has no retirement, pension, or profit-sharing
plan covering its officers and directors; however, the Company plans to implement certain such benefits after sufficient funds
are realized or raised by the Company (see “Anticipated Officer and Director Remuneration” below.)



Employment
Agreements



The
Company enters into and maintains customary employment agreements with each of its officers and employees.



Anticipated
Officer and Director Remuneration



The
Company pays reduced levels of compensation to its officers and director at present. The Company intends to pay regular, competitive
annual salaries to all its officers and will pay an annual stipend to its directors when, and if, it completes a primary public
offering for the sale of securities and/or the Company reaches greater profitability, experiences larger and more sustained positive
cash flow and/or obtains additional funding. At such time, the Company anticipates offering additional cash and non-cash compensation
to officers and directors. In addition, although not presently offered, the Company anticipates that its officers and directors
will be provided with additional fringe benefits and perquisites at subsidizes rates, or at the sole expense of the Company, as
may be determined on a case-by-case basis by the Company in its sole discretion. In addition, the Company may plan to offer 401(k)
matching funds as a retirement benefit at a later time.





31







ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.



The
following table sets forth information regarding the beneficial ownership of the Company’s common stock by each of its executive
officers and directors, individually and as a group and by each person who beneficially owns in excess of five percent of the common
stock after giving effect to any exercise of warrants or options held by that person.



|                                      |  | Number of Shares of |           |     | Percent of | 
|------------------------------------- |  | ------------------- | --------- | --- | ---------- | 
|Name/Position                         |  | Common Stock        |           |     | Class (1)  | 
|                                      |  |                     |           |     |            | 
|Cliff Blake (2)                       |  |                     | 1,000,000 |     |            | 
|Chief Executive Officer               |  |                     |           |     |            | 
|Director                              |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Devon Galpin (3)                      |  |                     | 1,000,000 |     |            | 
|COO                                   |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Michael Mautz (4)                     |  |                     | 1,000,000 |     |            | 
|Vice President                        |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Joy Mautz (4)                         |  |                     | 1,000,000 |     |            | 
|Vice President                        |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Julie Galpin (3)                      |  |                     | 1,000,000 |     |            | 
|Assistant Secretary                   |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Terry Blake (2)                       |  |                     | 1,000,000 |     |            | 
|33 Tall Oak                           |  |                     |           |     |            | 
|Irvine, California 92603              |  |                     |           |     |            | 
|                                      |  |                     |           |     |            | 
|Total owned by officers and directors |  |                     |           |     |            | 
|(5 persons)                           |  |                     | 6,000,000 | (2) |            | 



(1)
Based upon 7,500,000 shares outstanding.

(2)
Terry Blake is the spouse of Cliff Blake, the chief executive officer and sole director of the Company and thus the shares owned
by Ms. Blake may be deemed to be beneficially owned by Mr. Blake in which case Mr. Blake would own 2,000,000 shares or 28%.

(3)
Julie Galpin is the spouse of Devon Galpin, president and COO of the Company and thus the shares owned by Ms. Galpin may be deemed
to be beneficially owned by Mr. Galpin in which case Mr. Galpin would own 2,000,000 shares or 28%.

(4)
Joy Mautz is the spouse of Michael Mautz, vice president of the Company and thus the shares owned by Ms. Mautz may be deemed to
be beneficially owned by Mr. Mautz in which case Mr. Mautz would own 2,000,000 shares or 28%.



ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE



The
Company has promissory notes outstanding of $4,509 from monies advanced by Cliff Blake, an officer and sole director of the Company.The note bears interest at a rate of 6% per annum and is due in full in one lump payment in December 2015.



James
Cassidy, a partner in the law firm which acts as counsel to the Company, is the sole owner and director of Tiber Creek Corporation
which owns 250,000 shares of the Company's common stock. Tiber Creek Corporation has received consulting fees of $45,000 to date
from the Company (and is eligible to receive an additional $20,000) and also holds shares in the Company. Tiber Creek and its affiliate,
MB Americus LLC, a California limited liability company, each currently hold 250,000 shares in the Company.





32







James
Cassidy and James McKillop, who is the sole officer and owner of MB Americus, LLC, were both formerly officers and directors of
the Company. As the organizers and developers of Moosewood, Mr. Cassidy and Mr. McKillop were involved with the Company prior to
the Mergers. Mr. Cassidy provided services to the Company without charge, including preparation and filing of the charter corporate
documents and the registration statement on Form 10.



Certain
officers, directors and five percent shareholders have family relationships amongst them:



Cliff
Blake, an officer and director of the Company, and Terry Blake, a five percent shareholder of the Company, are married. Mr. and
Mrs. Blake are also parents/step-parents of Joy Mautz, an officer of the Company, and Julie Galpin, an officer of the Company.



Michael
Mautz, an officer of the Company, is married to Joy Mautz.



Devon
Galpin, an officer of the Company, is married to Julie Galpin.



ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES



Audit
Fees



The
aggregate fees incurred for each of the last two years for professional services rendered by the independent registered public
accounting firm for the audits of the Company's annual financial statements and review of financial statements included in the
Company's Form 10-K and Form 10-Q reports and services normally provided in connection with statutory and regulatory filings or
engagements were as follows:



|December 31, 2014 |        |  | December 31, 2013 |  
|----------------- | ------ |  | ----------------- | -
|$                 | 46,392 |  |                   | $



Tax
Fees



The
Company incurred $0 for tax related services.



All
Other Fees



The
Company incurred $0 for other fees by the principal accountant for the years ended December 31, 2014 and 2013.



The
Company does not currently have an audit committee serving and as a result its board of directors performs the duties of an audit
committee. The board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before
the auditor renders audit and non-audit services. The Company does not rely on pre-approval policies and procedures.





33







PART
IV



ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES



The
following exhibits are incorporated herein by reference.



|2.1++    | Agreement and Plan of Merger                                                                                                                                                                                                                 
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.2++    | Agreement and Plan of Merger                                                                                                                                                                                                                 
|3.1+     | Certificate of Incorporation                                                                                                                                                                                                                 
|3.2+     | By-laws                                                                                                                                                                                                                                      
|10.1+++  | Factoring Agreements with TAB Bank                                                                                                                                                                                                           
|10.2+++  | Guarantees regarding TAB Bank                                                                                                                                                                                                                
|10.3++++ | Agreement with Tiber Creek Corporation                                                                                                                                                                                                       
|10.4++++ | Promissory Note                                                                                                                                                                                                                              
|10.5++++ | Promissory Note                                                                                                                                                                                                                              
|10.6++++ | Promissory Note                                                                                                                                                                                                                              
|10.7++++ | Promissory Note                                                                                                                                                                                                                              
|10.8++++ | Promissory Note                                                                                                                                                                                                                              
|31#      | Certification of Chief Executive
    Officer and Chief Financial Officer                                                                                                                                                                     
|32#      | Certification of Chief Executive
    Officer     and Chief Financial Officer Pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002
    (Subsections (a) and (b) of     Section 1350, Title     18, United States Code)



| | # | Filed
herewith.
| | - | ---------------



| | + | Previously
filed on Form 10-12G on June 2, 2011 (File No.: 000-54427) as the same exhibit number as the exhibit number listed here, and incorporated
herein by this reference.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ++ | Previously
filed on Form S-1on November 13, 2012 (File No.: 333-184910) as the same exhibit number as the exhibit number listed here,
and incorporated herein by this reference.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | +++ | Previously
filed on Form S-1 on February 1, 2013 (File No. 333-184910) as the same exhibit number as the exhibit number listed here, and
incorporated herein by this reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ++++ | Previously
filed on Form S-1 on April 11, 2013 (File No. 333-184910) as the same exhibit number as the exhibit number listed here, and incorporated
herein by this reference.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------





34







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) 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 |                
|-------------------- | ------------------------------- | ---------------
|                     |                                 |                
|Dated: June 23, 2015 | By:                             | /s/ Cliff Blake
|                     |                                 |                
|                     | Chief Executive Officer         |                
|                     |                                 |                



|Dated: June 23, 2015 | By:                         | /s/ Cliff Blake | 
|-------------------- | --------------------------- | --------------- | 
|                     |                             |                
|                     | Principal Financial Officer |                



Pursuant
to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.



|NAME            | OFFICE   | DATE         
|--------------- | -------- | -------------
|                |          |              
|/s/ Cliff Blake | Director | June 23, 2015





35