As filed with the Securities and Exchange Commission on April 27, 2016

Securities Act File No.         

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549  

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

__________________________

 

RC-1, Inc.

(Name of small business issuer in its charter)

 

NEVADA   7948   26-1449268
(State or other Jurisdiction of
Incorporation or Organization)
  (Primary Standard  Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

 

110 Sunrise Center Drive

Thomasville, NC 27360

Address and telephone number of principal executive offices

and principal place of business)

 

Kevin P. O’Connell

Chief Executive Officer

110 Sunrise Center Dr.

Thomasville, NC 27360

(Name, address and telephone number of agent for service)

 

Copies to:

Brad Bingham Esq.

The Bingham Law Group APC

2173 Salk Avenue, Suite 250

Carlsbad, California 92008

(760) 230-1617 Office

(760) 579-7699 Fax  

 

As soon as practicable after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective registration statement for the same offering.   o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

 

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

 

Large accelerated filer o Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company) Smaller Reporting Company x

 

     
 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of

securities to be

registered

Amount to be

registered

Proposed

maximum

offering

price per

share (1)

Proposed

maximum a

aggregate

offering price (2)(3)

Amount of

registration fee (1)

Common Stock, $.001 par value 1,674,477 $.15 $251,172 $25.29

 

(1) Registration Fee has been paid via Fedwire.
(2) This is the initial offering and no current trading market exists for our common stock. The price paid for the currently issued and outstanding common stock was $0.001 per share for 190,000 shares to founding shareholders, officers and directors and $0.02 for shares to unaffiliated investors.
(3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

 

 
 

 

The information in this Prospectus is not complete and may be changed. We will not sell these securities until the registration statement filed with the SEC is effective.  This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

 

 

RC-1, INC.

 

1,674,477 SHARES OF COMMON STOCK

 

Date of Prospectus: April __, 2016

 

This prospectus relates to the resale by the selling stockholders of an aggregate of 1,674,477 shares of our common stock, par value $.001, per share all of which shares of common stock were issued to the selling stockholders. Selling stockholders will sell their shares at a price of $.15 per share until our shares are quoted on the OTC Bulletin Board or OTC Markets and thereafter at prevailing market prices or privately negotiated prices.

 

The shares of common stock are being registered to permit the selling stockholders to sell the shares from time to time in the public market. The stockholders may sell the shares through ordinary brokerage transactions, directly to market makers of our shares or through any other means described in the section entitled "Plan of Distribution". We cannot assure you that the selling stockholders will sell all or any portion of the shares offered in this prospectus.

 

No public market currently exists for the Shares and a public market may not develop, or, if any market does develop, it may not be sustained. Our common stock is not currently traded on any exchange or on the Over-The-Counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority (“FINRA”), for our common stock to be eligible for trading on the OTC Bulletin Board and/or OTC Markets.com (the “OTC Markets”). We do not yet have a market maker who has agreed to file such application, nor can there be any assurance that such an application for quotation will be approved. We will bear the expenses relating to the registration of the Shares. In the absence of a trading market or an active trading market, investors may be unable to liquidate their investment or make any profit from an investment in the Shares. 

 

We will pay the expenses of registering these shares. We will not receive any proceeds from the sale of shares of common stock in this offering. All of the net proceeds from the sale of our common stock will go to the selling stockholders.

 

Investing in these securities involves significant risks. Investors should not buy these securities unless they can afford to lose their entire investment.

 

All documents subsequently filed by the RC-1, Inc.(the "Company") pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the termination of this offering shall be deemed to be incorporated by reference into this prospectus.

 

SEE "RISK FACTORS" BEGINNING ON PAGE 6.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The date of this prospectus is _______, 2016 .

 

RED HERRING LANGUAGE---Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

 

 

 

 
 

 

TABLE OF CONTENTS

 

  Page #
PROSPECTUS SUMMARY 1
THE COMPANY 1
THE OFFERING 5
USE OF PROCEEDS 5
DILUTION 6
FORWARD-LOOKING STATEMENTS 6
RISK FACTORS 6
RELIANCE ON INFORMATION ONLY IN THIS PROSPECTUS 11
DIVIDEND POLICY 11
BUSINESS OF THE COMPANY 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 16
MANAGEMENT 23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 26
DESCRIPTION OF SECURITIES 26
PENNY STOCK 27
SELLING STOCKHOLDERS 28
PLAN OF DISTRIBUTION 29
LEGAL PROCEEDINGS 30
LEGAL MATTERS 30
FORWARD LOOKING STATEMENTS. 30
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 31
EXPERTS 31
AVAILABLE INFORMATION 31
FINANCIAL STATEMENTS 32

 

 

  i  
 

PROSPECTUS SUMMARY

 

The following summary is qualified in its entirety by reference to, and should be read in conjunction with, the more detailed information and financial statements (including the notes thereto) appearing elsewhere in this prospectus. Each prospective investor is urged to read this prospectus in its entirety. When used in this prospectus, the terms "Company," "R-Course Promotions, ", “RC-1” "we," "our," "ours" and "us" refer to RC-1, Inc., unless otherwise specified or the context requires otherwise.

 

THE COMPANY

 

SUMMARY

 

BUSINESS OF THE COMPANY

 

Background

 

We are a development stage small motorsports production company which was originally organized in 2007 to participate in “Road Racing” motorsports events organized by several motorsports sanctioning bodies such as The National Association for Stock Car Auto Racing ("NASCAR"), and The International Motorsports Association ("IMSA"). The Road Racing motorsports events require the use of “Stock Cars” that are professionally modified for Road Racing, and “Sports Cars” that are specifically manufactured for competition Road Racing.

 

We are focused on ways to attract new sponsors, agency clients and collect money purses for finishing positions. The Company engages in regional and national motorsports events involving road course racing. The Company has the potential to earn revenues in multiple ways. The Company owns three race cars which it uses for promotional and marketing operations as well as from time to time enters into races for a chance at winning purse money. Only if the Company race car finishes in a top position, will it earn purse money. The Company’s target revenue stream is to actively market its advertising services in the mobile billboard industry. The Company also plans to negotiate sponsorship deals with other race teams whereby the Company acts as an agent to sell advertising sponsorship packages.

 

In 2012, we commenced offering racing production and management services to potential clients that wish to participate in motorsports racing. Our production services range from producing a full "turnkey" motorsports racing team, to sourcing or providing management of, or access to, any part of equipment or human services required to participate in one or more racing events.  The following is a list of some of what services we offer to potential clients:

 

Acting as consultant and liaison between the client and the sanctioning body so that the client is able to participate in motorsport events.
 
Sourcing of:
fully prepared and ready for racing racecars
racing driver(s) 
crew chiefs
car chiefs
Mechanic crews
"Over the wall" pit crews
 
Producing pre- and post-race social events

 

Among our potential clients are racing drivers who wish to participate in sanctioned racing events; businesses that wish to market their brand through participation in sanctioned racing events; businesses which wish to stage hosting and promotional parties and events before, during and after sanctioned race events, and race teams that are unfamiliar with particular racing series event and require our assistance to participate in such racing series.

 

  1  
 

In 2012, we arranged to provide a "turnkey" racing vehicle and racing team for a client. We arranged for the client, to participate in the Grand Am Rolex Sports Car Series (now IMSA TUDOR Sports Car Championship Series), which is a NASCAR sanctioned series that features various types of sports cars racing in combined competition.  We provided directly, or through sub-contractors, all of the key management services and arranged for all of attributes that were necessary for the client to participate in motorsports racing events.  The client entered two major sports car events: 

 

23-Jun-12   Elkhart Lake, Wisconsin- Rolex 250 – Driven by VisitFlorida.com Rolex Sports Cars -- GT
27-Jul-12    Indianapolis, Indiana  Brickyard Grand Prix Rolex Sports Cars – GT

 

In 2013 and 2014, as part of our marketing efforts, and to bolster our credibility as a motorsports services production company, we participated in the following racing events using leased vehicles and independent mechanics, Crew Chiefs and crews, In certain race events, our President and Chief Executive Officer, Kevin P. O'Connell, who is a licensed NASCAR and International Motorsports Association ("IMSA") driver, was the driver of the racecar and acted as our representative at the event:

 

Date Series Track Name of Event
6/10/13 NASCAR Euro Series* Brands Hatch, England America SpeedFest
6/22/13 NASCAR Nationwide Series** Road America, Wisconsin Johnsonville Sausage 200
8/17/13 NASCAR Nationwide Series Mid-Ohio Sports Car Course Nationwide Children's Hospital 200
10/16/13 NASCAR Camping World TS Talladega, Alabama Fred's 250 Powered by Coke

* Now known as the NASCAR Whelen Euro Series

** Now known as the NASCAR Xfinity Series

 

In 2014, we participated in the following NASCAR sanctioned events:

 

Date Series Track Name of Event
6/21/14 NASCAR Xfinity Series Road America, Wisconsin Gardner Denver 200
8/9/14 NASCAR Xfinity Series Watkins Glen, New York Zippo 200

 

In June of 2014, we acquired 3 vehicles; a Chevrolet Monte Carlo Super Sport fully equipped Stock Car; a Chevrolet Monte Carlo Super Sport "Roller" (a Roller is a Stock Car that is complete with all of the required racing components, but without a competition engine and transmission; and a 2012 Ford BOSS Mustang R (the "Mustang R).  We intend to use the Mustang R in race events sanctioned by the Sportscar Vintage Racing Association ("SVRA").  We intend to use these vehicles as part of our production services offerings as well in racing events to market our motorsports production services.

 

In 2015, we participated in the following NASCAR sanctioned events:

 

Date Series Track Name of Event
3/13/15 NASCAR Mexico Series Phoenix International Raceway  
5/17/15 NASCAR Canadian Pinty Series Bowmanville, Canada  
8/29/2015 NASCAR Xfinity Series Road America, Wisconsin Road America 180
8/8/2015 NASCAR Xfinity Series Watkins Glen, New York Zippo 200

 

In 2016, when we enter a racing event for marketing purposes, we intend to use our own vehicles, and equipment, or lease a vehicle for the event.  Also, when we use our own vehicles in an event, we expect to offer advertising space on our vehicles to clients desiring to use our cars and equipment to display and market their product or services by having the client's logo prominently appear on the vehicle. Our ability to attract clients for our production services or advertising services will, in part, be dependent upon the success of our drivers and racecars in the races we may decide to enter. We believe that if we win, or finish within the top 20 finishing places in a race, our ability to attract clients for our production services and advertisers will be enhanced. There can be no assurance that we will be able to secure clients for our production services nor advertisers for our vehicles.

 

 

 

  2  
 

 

Corporate History

 

We were organized in October of 2007 as R-Course Promotions, LLC, a California limited liability company. At the time of our formation, Kevin O'Connell was the managing member of our company and the sole member of General Pacific Partners, LLC ("GPP"), also a California limited liability company. GPP owns a majority of our issued and outstanding common shares. In May of 2009, R-Course Promotions, LLC was merged with RC-1, Inc., a Nevada corporation with no prior operations. The reason for the merger was the potential liquidity for our shareholders.

 

On March 4, 2014, there was a "reverse split" of issued and outstanding common shares of the Company on a one "new"share for each 70 "old" shares. Thus, on March 4, 2014 the issued and outstanding shares of the Company were reduced from 21,302,207 to 304,336.  

 

For the years ended December 31, 2015 and 2014, we had $1,000 and $8,300 respectively in revenues.  In 2015 and 2014 we incurred losses of $306,957 and $647,868. Our cumulative losses thru December 31, 2015 were $2,779,812.

 

Lines of Credit

 

On October 1, 2009 General Pacific Partners, LLC ("GPP") our majority shareholder, established a line of credit of $600,000. The receipt of funds from this line of credit is subject to the approval of Mr. O'Connell. As of December 31, 2015, $444,636 of the Line of Credit was available. The terms of the line of credit provides that we are limited to a maximum quarterly draw down on the line of $100,000 per each calendar quarter. Mr. O'Connell may have a conflict of interest should we determine to draw upon the Line of Credit. He will have to determine, as the Managing Member of GPP, whether it is in the best interest of GPP to approve or decline the "draw down" or, as our controlling shareholder, it is in our best interest to approve the draw down.

 

On August 1, 2013, Devcap Partners, LLC, ("Devcap") a Texas limited liability company that is wholly owned and managed by Mr. O'Connell, established a line of credit of $300,000. The terms of the line of credit contain annualized interest of 8%, quarterly interest payments to be paid by the Company on the outstanding balance. Mr. O'Connell may have a conflict of interest should we determine to draw upon the Line of Credit. He will have to determine, as the Managing Member of Devcap, whether it is in the best interest of Devcap to approve or decline the "draw down" or, as our controlling shareholder, it is in our best interest to approve the draw down. At December 31, 2015 there is no credit available on this line.

 

On October 15, 2012 TVP Investments, LLC established a Line of Credit of $500,000. TVP Investments, LLC is a Georgia limited liability company. As of December 31, 2015, we had drawn $75,000 of principal on this Line of Credit and had accrued interest of $14,918. The terms of this Line of Credit contains annualized interest of 10%, quarterly interest payments paid by the Company on outstanding balances and provides that we are limited to a maximum quarterly draw down on the line of $100,000 per each calendar quarter.

 

Capital Requirements

 

Expected management estimates for the cost of operating the business through December 31, will require additional capital of up to Two Hundred Fifty Thousand dollars ($250,000) consisting of: $20,000 for registration and licenses required for entry in sanctioned racing events; $20,000 for travel and lodging; $20,000 for marketing and branding; $30,000 for legal and accounting; $15,000 for engineers and consultants; $15,000 for parts, $60,000 for engine and transmission leases. $30,000 for fuels and tires; $10,000 for racecar transporter travel; $20,000 for debt service of all Company notes payable; and $10,000 in airfare and rental cars.

 

There can be no assurance that we will be able to raise any or all of the capital required. These factors indicate that we may be unable to continue as a going concern, particularly in the event that we cannot generate sufficient cash flow or raise sufficient capital to conduct our operations. Our financial statements do not include any adjustments to the value of our assets or the classification of our liabilities that might result if we would be unable to continue as a going concern.

 

Meeting our capital requirements will be directly contingent on Mr. O'Connell and his related businesses and his decision to advance us capital in the event that we are not able to raise capital from other sources.

 

  3  
 

Additionally, our ability to attract lessees for our race cars and clients for our consulting and advertising business will, in part, be dependent upon the success of our lessees in the races in which they compete. The race event finishing positions, especially finishing among the first ten places, will enhance our ability to attract capital and event to offset the cost of competing in racing events. Should our lessees compete in races in which they finish in other than the first ten finishing places, those lessees ability to attract advertisers and advertising and promotion monies may be diminished.

 

Marketing

 

We depend upon our officers for all marketing activities. We intend to hire a marketing and sales person to pursue our offerings of motorsports production services. However, we will not be able to hire such a person until we have the financial resources to do so.

 

Competition

 

We principally compete with other racing teams and advertising companies that are much larger, well known, better established and have greater financial resources than us. We do not consider the Company to be a factor in the overall racing industry. We will also compete for advertising dollars with other sports such as football, baseball, basketball, hockey, tennis and golf and with other live entertainment and popular recreational activities. We also compete with other consultant and management companies that are much larger and have a longer history and are better established for clients in our Consulting and Management business. Depending on our success in funding our operations, we intend on entering between four and ten events on an annual basis. The events attended are dependent on our success in raising capital from sources other than our lines of credit from General Pacific Partners, LLC and TVP Investments LLC.

 

Relationship with our majority shareholder

 

Kevin O'Connell owns a majority interest in GPP, which owns approximately seventy one percent (71%) of our outstanding common stock. Mr. O'Connell is also licensed by NASCAR and IMSA for competition driving and has been the designated driver in events in which we have participated. Mr. O'Connell does not receive any remuneration for his services and does not receive any part of the purses from races that we have become entitled to because of the order of finish of our race car. Further, Mr. O'Connell has provided the majority of consulting and management services on behalf of the Company since inception without compensation.

 

On June 2, 2014, $295,306 of related party debt from the GPP line of credit was converted into 1,968,704 shares of common stock in the Company. As of December 31, 2015 the GPP line of credit had a debt balance with the Company of $155,364.

 

On June 2, 2014, Devcap Partners, LLC converted $85,690 in loans into common stock in the Company and was issued 571,267 shares. As of December 31, 2015 the Devcap line of credit had a debt balance with the Company of $302,913.

 

The Company has recurring losses from operations and our auditor has stated that there is substantial doubt about the Company's ability to continue as a going concern. Further, continued losses could cause the Company to be unable to continue in the racing industry or to meet certain debt obligations. (See "Risk Factors" below). The Company believes that our business requires significant capital outlays on a continual basis to successfully fund operations, but with adequate funding that profitable operations can be achieved. Without additional funding, the Company could discontinue operations.

 

We have $49,118 in cash as of December 31, 2015 and $866,723 available from our three lines of credit. Our monthly expenses are approximately $20,800. We estimate that we will need additional financing on July 1, 2016.

 

Implications of Being an Emerging Growth Company

 

We are an “Emerging Growth Company,” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2013, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

 

  4  
 

 

We could remain an “emerging growth company” for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

 

We are also considered a "smaller reporting company,"  If we are still considered a "smaller reporting company" at such time as we cease to be an "emerging growth company," we will be subject to increased disclosure requirements. However, the disclosure requirements will still be less than they would be if we were not considered either an "emerging growth company" or a "smaller reporting company."

 

For more information, please see our Risk Factor entitled “ As an “emerging growth company” under the Jumpstart our Business Startups Act (JOBS Act), we are permitted to rely on exemptions from certain disclosure requirements.”

 

Decision to Go Public

 

The Company’s officers and directors believe that potential investors are more inclined to invest in the Company if the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides investors with update material information about the Company and the ability of the company’s investors to resell their shares through the facilities of the securities markets, assuming the Company finds a market maker in order to have it shares of common stock quoted on the OTC Bulletin Board or the OTCQX tier of the OTC Markets.  Our officers and director believe that the disadvantages of becoming a public company are the continuing reporting costs of being a reporting issuer under the Exchange Act and reluctance of persons qualified to serve as directors of the Company because of director’s exposure to possible legal claims.  Additional disadvantages include management’s lack of experience in the business of the Company as well as in running a public company, the Company’s status as a development stage company, and management’s limited amount of time that will be devoted to the Company.

 

THE OFFERING

 

Common stock offered by selling stockholders: 1,674,477 (These shares represent approximately 21% of our current outstanding common stock.)
   
Common stock to be outstanding after the offering: 7,929,581
   
Offering Price Per Share $.15. (Until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices.)

 

Use of proceeds: We will not receive any proceeds from the sale of any common stock sold by the selling stockholders.
   
Proposed Over-The-Counter Bulletin Board Symbol: RCRS

 

USE OF PROCEEDS

 

We will not receive any of the proceeds from the sale of the shares of our common stock being offered for sale by the selling stockholders. We will incur all costs associated with this registration statement and prospectus.

 

Tax Considerations  

 

You should consult your own tax advisor regarding tax consequences that might be associated with your investment in the shares of common stock.

 

  5  
 

DILUTION

 

The common stock to be sold by the selling security holders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution of equity interests to our existing stockholders.

 

FORWARD-LOOKING STATEMENTS

 

This Prospectus contains forward-looking statements, which relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors,” that may cause our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

RISK FACTORS

 

An investment in these securities involves a high degree of risk and is speculative in nature. In addition to the other information regarding the Company contained in this Prospectus, you should consider many important factors in determining whether to purchase Shares. Following are what we believe are material risks related to the Company and an investment in the Company. Investors are urged to perform their own due diligence, with the help of their investment, accounting, legal and/or other professionals and to make an independent decision regarding an investment in the Shares.

 

We have a limited operating history, with historical losses.

 

We have a short operating history and must be considered to be in the development stage. We have no history of earnings or profits and there is no assurance that we will operate profitably in the future. There is no meaningful historical financial data upon which to base planned operating expenses. As a result of this limited operating history, it is difficult to accurately forecast our potential revenue. We intend to use race cars to market and promote the services of potential clients. We contemplate that we will further develop our racing operations into which we will reinvest all profits, if any, into the Company.

 

We estimate that for the 12 months ending December 31, 2015, the cost of operating the business will require additional capital of a minimum of two hundred fifty thousand dollars ($250,000) and there can be no assurance that any or all of that additional capital will be available to the Company.

 

Our auditors have expressed substantial doubt as to whether our Company can continue as a going concern .

 

We have generated only limited revenues since our inception and have incurred substantial losses. Our business plans estimate that we will need to raise $250,000 in additional capital to fund our operations through December 31, 2016 and there can be no assurance that we will be able to raise any or all of the capital required. These factors indicate that we may be unable to continue as a going concern, particularly in the event that we cannot generate sufficient cash flow or raise sufficient capital to conduct our operations. Our financial statements do not include any adjustments to the value of our assets or the classification of our liabilities that might result if we would be unable to continue as a going concern.

 

Our existing principal stockholders exercise control of our Company.

 

General Pacific Partners, LLC, ("GPP") and other affiliates of Kevin P. O'Connell, together are the beneficial owners of approximately 67.6% of our issued and outstanding common stock. GPP and other affiliates, have membership interests and economic interests that are held and controlled by Kevin P. O'Connell.

 

  6  
 

In addition, GPP has established a line of credit of $600,000. The receipt of funds from this line of credit is subject to the approval of Mr. O'Connell. As of December 31, 2015 there is $444,636 available on this Line of Credit. The terms of the line of credit contains annualized interest of 10%, quarterly interest payments paid by the Company on outstanding balances and requires a maximum quarterly draw down on the line of $100,000 per quarter. Mr. O'Connell may have a conflict of interest should we determine to draw upon the line of credit. He will have to determine, as the Managing Member of GPP, whether it is in the best interest of GPP to approve or decline the "draw down" or, as our controlling shareholder, it is in our best interest to approve the draw down.

 

Further, Mr. O’Connell, will be able to determine the election of directors and all other matters subject to stockholder votes. This concentration of ownership may have the effect of delaying or preventing a change in control of the Company, even if this change in control would benefit stockholders.

 

We must enter into and maintain a good working relationship with the NASCAR, IMSA and SVRA as well as other sanctioning bodies relevant to our business.

 

To be successful, we must create and maintain a good working relationship with the sanctioning body of our racing events we participate in with NASCAR, IMSA, and SVRA being of most importance. Without a good relationship with the sanctioning bodies, they may, at their sole discretion disallow our company and clients from competing in any or all of their sanctioned events for an indefinite period of time. We do not have any continuing contractual relationship with these sanctioning bodies and may not be able to enter into any agreements to participate in racing events on terms acceptable to us.

 

Our racecars are subject to changes in technology and competitiveness.

 

In June of 2014, we acquired 3 vehicles; a Chevrolet Monte Carlo Super Sport fully equipped Stock Car; a Chevrolet Monte Carlo Super Sport "Roller" (a Roller is a Stock Car that is complete with all of the required racing components, but without a competition engine and transmission; and a 2012 Ford BOSS Mustang R (the "Mustang R). These vehicles contain current technologies that may cease to be legal or competitive as the rules, and regulations of NASCAR, IMSA and SVRA are modified and technologies are updated. Additionally, governing sanctioning bodies are expected to regularly hold discussions with the manufacturers and competitors regarding implementing updated models and technologies that may have an adverse effect on our Company. To the extent that sanctioning bodies may change their rules and regulations so that our racecars do not comply with the changed rules or regulations, our business will be adversely affected.

   

Our racing operations face competition for marketing and advertising dollars.

 

We compete for marketing and advertising dollars with other motorsports teams and with sports such as football, baseball, basketball, hockey, tennis and golf and with other entertainment and recreational activities. In the event that fan interest in motorsports declines motorsports might not be as attractive to the potential clients, which could have an adverse effect on our operations.

 

There can be no assurance that our team will be competitive or qualify for each, or any NASCAR, IMSA or SVRA sanctioned event entered. Qualification, by speed trial racing in NASCAR races, is only required in special events. IMSA sanctioned events are not limited by qualifying, but rather may be limited by the racing venue and the size of the paddocks that would be used to support the race cars and teams before, during and after the racing events. If we are not successful competitively, we could have a more difficult time attracting and maintaining clients, quality drivers and crews which in turn could impact our ability to attract production, marketing and advertising dollars. We compete with well-established teams and there can be no assurance that we will be able to create or maintain a competitive position.

 

We may not be able to lease or obtain certain race cars as needed for specific events.

 

Our ability to compete in race events is contingent upon our ability to configure our owned vehicles, or lease vehicles for specific series when needed. There can be no assurance that our vehicles will be able meet specifications for a race series we would intend to enter or that we would be able to lease a suitable race vehicle when needed or be able to negotiate a lease fee that we deem reasonable.

 

The success of our operations will be dependent upon the success of our racing team.

 

Our ability to fully implement our business plan and the success of our operations will be dependent upon the success of our racing team. If our racing team fails to qualify for races or finishes poorly in races on a regular basis, the success of our operations will be adversely impacted. Racing teams that fail to qualify for events cannot generate any purse revenue and may experience a reduction in fan and advertisers interest. We believe that if we win, or finish within the top 10 finishing places in a race, our ability to attract advertisers will be enhanced. However, our past record of sporadic "Top 20" finishing places has diminished our ability to attract advertisers. There can be no assurance that we will win or compete successfully in any event.

 

  7  
 

 

In racing events that we determined to enter, we have always qualified to race. However, we have finished poorly in these events and have not received any purse money if finishing positions fall outside of the top 30 places. A low finishing position for any event may or may not be a direct result of the team’s activities and efforts, and all racing teams in competition face the same uncertain results. There can be no assurance that we will win any purse money and the denomination of such purse money could have any effect upon our ability to fund our operations.

 

We may incur liability for personal injuries.

 

Racing events can be dangerous to participants and to spectators. We maintain insurance policies that provide coverage within limits that in our judgment are sufficient to protect us from material financial loss due to liability for personal injuries sustained by, or death of, our personnel or spectators in the ordinary course of our business. Our insurance may not be adequate or available at all times and in all circumstances. In the event that damages for injuries sustained by our participants or spectators exceed our liability coverage or the insurance company denies coverage, our financial condition, results of operations and cash flows could be adversely affected to the extent claims and associated expenses exceed insurance recoveries.

 

We do not have total loss insurance for the racecars we own.

 

Due to the high cost of property damage insurance, we have chosen not to carry total loss insurance for the racecars we lease or own. In the event of a loss occurrence, we may lose or be liable for as much as the total value of the racecar which is damaged. The loss could be as much as $250,000, which would be a material loss to us and could cause us to cease operations.

 

We have only recently sought advertising revenue and we may not be able to attract and maintain advertisers as a source of revenues.

 

We have no advertising revenue since our inception in 2007 and we may not be able to attract and maintain advertisers as a source of revenues. Further, our ability to attract advertising clients will be a significant factor in our success or failure.

 

We will need additional financing, which may not be available.

 

Our future success will depend on our ability to raise additional funds and our ability to raise future advertising money, which includes attracting advertisers or Funded Drivers for our racing teams. No commitments to provide additional funds have been made by management and no agreements with advertisers or funded Drivers have been entered into. Our ability to arrange financing in the future will depend in part upon the prevailing capital market conditions, as well as our business performance. There can be no assurance that we will be successful in our efforts to arrange additional financing on satisfactory terms. If additional financing is raised by the issuance of our shares, control of the Company may change and stockholders may suffer additional dilution. If adequate funds are not available, or are not available on acceptable terms, we may not be able to take advantage of opportunities, or otherwise respond to competitive pressures and remain in business.

 

We are dependent on our key personnel.

 

Our success will depend in large part upon the continued services of Mr. Kevin P. O'Connell, who presently devotes only 30% or less of his time to our business. The death or loss of Mr. O'Connell would have a material adverse effect on our business, financial condition and results of operations. We do not have key man life insurance on Mr. O'Connell.

We face significant racing competition.

 

We principally compete for clients and purses with other motorsports teams and advertising and public relations companies. In addition, there are relatively low barriers to entry into these markets and we expect to continue to face competition from new entrants into these same markets. There can be no assurance that we will be able to compete successfully in these markets.

 

We will incur additional costs for being a small, public reporting company.

 

We intend to be a fully reporting and publicly traded company. There will be additional non-operating costs associated with being a public company. Additionally, we have a management team that is inexperienced in managing publicly traded companies.

 

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Risks Associated with this Offering

 

There is no active trading market for our common stock and if a market for our common stock does not develop, our investors will be unable to sell their shares.

 

There currently is no trading market for our stock. While we intend to utilize a marker maker to apply for quotation on the OTC Markets following completion of this offering, we cannot assure you that a public market will ever develop. There is no guarantee that the Shares will ever be quoted on the OTC Markets or any exchange. Furthermore, you will likely not be able to sell your securities if a regular trading market for our securities does not develop and we cannot predict the extent, if any, to which investor interest will lead to the development of a viable trading market in our shares. We expect the initial market for our stock to be limited, if a market develops at all. Even if a limited trading market does develop, there is a risk that the absence of potential buyers will prevent you from selling your shares if you determine to reduce or eliminate your investment. Additionally, the offering price of $.15 share may not reflect the current value of our shares after this offering.

 

Because we do not intend to pay any dividends on our common shares, investors seeking dividend income or liquidity should not purchase shares in this offering .

 

We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our working capital. Prospective investors seeking or needing dividend income or liquidity should, therefore, not purchase our common stock. There can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, who currently do not intend to pay any dividends on our common shares for the foreseeable future.

 

Our shares may not become eligible to be traded electronically which would result in brokerage firms being unwilling to trade them.

 

If we become able to have our shares of common stock quoted on the OTCQB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCQB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all companies on the OTCBB). While DTC-eligibility is not a requirement to trade on the OTCQB, it is a necessity to process trades on the OTCQB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.

 

Sales of a substantial number of shares of our common stock into the public market by the selling stockholders may result in significant downward pressure on the price of our common stock and may affect the ability of our stockholders to realize any trading price of our common stock when and if a trading market develops for our common stock.

 

Sales of a substantial number of shares of our common stock in the public market could cause a reduction in the market price of our common stock, when and if such market develops. When this registration statement is declared effective, the selling stockholders may be reselling up to 30% of the issued and outstanding shares of our common stock. As a result of such registration statement, a substantial number of our shares of common stock which have been issued may be available for immediate resale when and if a market develops for our common stock, which could have an adverse effect on the price of our common stock. As a result of any such decreases in price of our common stock, purchasers who acquire shares from the selling stockholders may lose some or all of their investment.

 

Any significant downward pressure on the price of our common stock as the selling stockholders sell the shares of our common stock could encourage short sales by the selling stockholders or others. Any such short sales could place further downward pressure on the price of our common stock. 

 

State Securities Laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this prospectus.

 

There is no public market for our securities, and there can be no assurance that any public market will develop in the foreseeable future. Secondary trading in securities sold in this offering will not be possible in any state in the U.S. unless and until the common shares are qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our securities for secondary trading, or identifying an available exemption for secondary trading in our securities in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of the securities in any particular state, the securities could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our securities, the market for our securities could be adversely affected.

 

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Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.

 

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

 

Risk Factors Related to the JOBS Act

 

We are an ‘Emerging Growth Company” and we intend to take advantage of reduced disclosure and governance requirements applicable to Emerging Growth Companies, which could result in our stock being less attractive to investors.

 

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company, which in certain circumstances could be for up to five years.

 

The Company’s election to take advantage of the jobs act’s extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to take advantage of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board ("PCAOB") or the Securities & Exchange Commission ("SEC"). The Company has elected take advantage of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard on the private company timeframe. This may make comparison of the Company's financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

  10  
 

The Jobs Act will also allow the Company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and reduce the amount of information provided in reports filed with the

 

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting.

 

be exempt from the "say on pay" provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute" provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Act and certain disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer;

 

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934 and instead provide a reduced level of disclosure concerning executive compensation; and

 

be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements

 

The Company currently intends to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”.

 

As long as the Company qualifies as an Emerging Growth Company, the Company’s independent registered public accounting firm will not be required to attest to the effectiveness of the company’s internal control over financial reporting.


Because the Company has elected to take advantage of the extended time periods for compliance with new or revised accounting standards provided for under Section 102(b) of the JOBS Act, among other things, this means that the Company's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company's internal control over financial reporting so long as it qualifies as an emerging growth company, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an emerging growth company, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers that would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

 

RELIANCE ON INFORMATION ONLY IN THIS PROSPECTUS

 

Please read this prospectus carefully. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information provided by the prospectus is accurate as of any date other than the date on the front of this prospectus.

 

DIVIDEND POLICY

 

We do not intend to pay any dividends in the foreseeable future. We intend to retain any future earnings, if any, for use in the operation and expansion of our business. Any future decision to pay dividends on common stock will be at the discretion of our board of directors and will be dependent upon our fiscal condition, results of operations capital requirements and other factors our board of directors may deem relevant.

 

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BUSINESS OF THE COMPANY

History

 

We were organized in October of 2007 as R-Course Promotions, LLC, a California limited liability. At the time of our formation, Mr. Kevin O'Connell was the managing member of our company and the sole member of General Pacific Partners, LLC ("GPP"), also a California limited liability company. GPP owns a majority of our issued and outstanding common shares. In May of 2009, R-Course Promotions, LLC was merged with RC-1, Inc., a Nevada corporation with no prior operations. The reason for the merger was the potential liquidity for our shareholders.

 

We are a development stage small motorsports company which was organized to participate in “Road Racing” motorsports events organized by several motorsports sanctioning bodies such as The National Association for Stock Car Auto Racing ("NASCAR"), and The International Motorsports Association ("IMSA") and the Sports Car Vintage Racing Association (SVRA . The Road Racing motorsports events require the use of “Stock Cars” that are professionally modified for Road Racing, and “Sports Cars” that are specifically manufactured for competition Road Racing. From inception through December 31, 2015, we participated in racing events by exclusively leasing vehicles from unaffiliated third parties for each racing event in which we participated. In June of 2014, we acquired 3 vehicles; a Chevrolet Monte Carlo Super Sport fully equipped Stock Car; a Chevrolet Monte Carlo Super Sport "Roller" (a Roller is a Stock Car that is complete with all of the required racing components, but without a competition engine and transmission; and a 2012 Ford BOSS Mustang R (the "Mustang R). We intend to use the Mustang R in race events sanctioned by the Sportscar Vintage Racing Association ("SVRA").

 

In 2012, we commenced offering racing production services to potential clients that wish to participate in motorsports racing. Our production services include producing a full motorsports racing team for clients by providing ,a full "turnkey" Racing Team, to enable a client to participate in one or more racing event as a Team Owner, or providing management of, or access to, any part of equipment or human services required to participate in a racing event, including:

 

· fully prepared racing cars
· decaling the race cars
· driver(s)
· crew chiefs
· car chiefs
· mechanic crews
· "over the wall" pit crews
· liaison between the client and the sanctioning body (entry fees, equipment specifications and membership)
·

pre- and post-race social events

 

Background

 

The National Association for Stock Car Auto Racing (NASCAR) is a family-owned and -operated business that sanctions and governs multiple auto racing sports events. NASCAR is the largest sanctioning body of stock car in the United States. The three largest racing series sanctioned by NASCAR are the Sprint Cup Series, the Nationwide Series and the Camping World Truck Series. NASCAR also oversees the Whelen Modified Tour and the NASCAR Iracing.com Series. NASCAR sanctions over 1500 races at over 100 tracks in 39 US states and Canada. NASCAR has presented exhibition races at the circuits in Japan, Mexico and Australia. NASCAR is a separate and distinct entity from us and we do not have any formal contractual arrangements with NASCAR. We have participated in over twenty five NASCAR sanctioned and embodied road racing events both regionally and nationally to date.

 

The International Motor Sports Association ("IMSA") is an auto racing sanctioning body based in Daytona Beach, Florida, United States. Beginning in 2014, IMSA became the sanctioning body of the Tudor United SportsCar Championship, the premier road racing series resulting from the merger of the former Grand-Am Road Racing and the American Le Mans Series.

 

The Sports Car Vintage Racing Association ("SVRA") is the largest and one of the oldest Vintage Racing organization in the United States. SVRA now has to over 1,200 members. SVRA conducts Vintage events at legendary race tracks throughout the country The series accepts entries that feature classic MGs, Triumphs, BMWs, Allards, Jaguars, and Lotuses as well as contemporary Camaros, Audis, Porsches and Corvettes among others.

 

The Vintage Auto Racing Association ("VARA") is the largest vintage car racing member organization on the West Coast of the United States. Race fields are made up of production and sports cars through 1979. 

 

The "Toyota Southwest Superlates" Series (SWS) is owned by the operators of Willow Springs International Raceway in Rosamond, California. It is presently run only at the Willow Springs International Raceway in Lancaster, California

 

In addition to motorsports production services, we expect revenue to be derived from the sale of advertising space on each vehicle we enter in race and from winning a share of the “cash purses” that are provided by Sanctioning Organizations, Promoters and Sponsors of the events. In addition, we expect to utilize our race cars to provide marketing and public corporate branding services to clients desiring to use our cars and equipment to market their product or service by having our vehicles promote their brand by carrying their logo. Our ability to attract advertisers will, in part, be dependent upon the success of our racecars in the races we may decide to enter. We believe that if we win, or finish within the top 10 finishing places in a race, our ability to attract advertisers will be enhanced. Further, our past record of sporadic "Top 10" finishing places, has diminished our ability to attract advertisers.

 

Competition Events Attended

 

Since inception, we have participated in various NASCAR, IMSA and SVRA road course events using road racing prepared race cars. For these events, we either entered our own race cars for competition in the event or leased race cars as a part of an overall vendor relationship.

 

We participated in limited road racing events 2013, 2014 and 2015. We did have a regular racing schedule with a regional sanctioning body, the Toyota Southwest Superlate Model Series. Below is a list of 2013 and 2014 and 2015 events attended:

 

  Toyota Southwest Superlates  
  2013 Schedule  
Date Location Purse
4/20/2013 Willow Springs Raceway, Rosamond CA $0
6/1/2013 Willow Springs Raceway, Rosamond CA $ 0
6/22/2013 Willow Springs Raceway, Rosamond CA $0
7/20/2013 Willow Springs Raceway, Rosamond CA $0
8/31/2013 Willow Springs Raceway, Rosamond CA $0
9/21/2013 Willow Springs Raceway, Rosamond CA $0
11/9/2013 Willow Springs Raceway, Rosamond CA $0
12/14/2013 Willow Springs Raceway, Rosamond CA $0
  Toyota Southwest Superlates  
  2014 Schedule  
Date Location Purse
4/19/2014 Willow Springs Raceway, Rosamond, CA $400
5/31/2014 Willow Springs Raceway, Rosamond, CA $ 0
6/21/2014 Willow Springs Raceway, Rosamond, CA $600
7/19/2014 Willow Springs Raceway, Rosamond, CA $400
8/30/2014 Willow Springs Raceway, Rosamond, CA $0
9/21/2014 Willow Springs Raceway, Rosamond, CA $1,500
11/9/2014 Willow Springs Raceway, Rosamond, CA $ 400
12/14/2014 Willow Springs Raceway, Rosamond, CA $ 5,000

 

** The race in which we participated in November of 2014 in the VARA Annual Big Bore event at Willow Springs International Raceway.

 

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  Toyota Southwest Superlates  
  2015 Schedule  
Date Location Purse
5/30/2015 Willow Springs Raceway, Rosamond, CA $0
6/27/2015 Willow Springs Raceway, Rosamond, CA $0
7/18/2015 Willow Springs Raceway, Rosamond, CA $0
8/29/2015 Willow Springs Raceway, Rosamond, CA $0
9/19/2015 Willow Springs Raceway, Rosamond, CA $0
11/7/2015 Willow Springs Raceway, Rosamond, CA $0

 

  NASCAR  
     
3/13/2015 Phoenix International Raceway $0
5/17/2015 Canadian Tire Motorsports Park $0
8/8/2015 Xfinity Series Watkins Glen,NY $0
8/29/2015 Xfinity Series,Road America Wisconsin $0
     

 

 

Sanctioning Bodies

 

Sports Car Vintage Racing Association (SVRA)

 

The Sports car Vintage Racing Association (SVRA) is the largest and one of the oldest Vintage Racing organization in the United States. SVRA now has to over 1,200 members. SVRA conducts Vintage events at legendary race tracks throughout the country The series accepts entries that feature classic MGs, Triumphs, BMWs, Allards, Jaguars, and Lotuses as well as contemporary Camaros, Audis, Porsches and Corvettes among others.

 

NASCAR Sprint Cup Series

 

The NASCAR Sprint Cup Series is the sport's highest level of professional competition. It is consequently the most popular and most profitable NASCAR series. Since 2001, the Sprint Cup season has consisted of 36 races over 10 months.

 

NASCAR Xfinity Series

 

The NASCAR Xfinity Series (formerly Nationwide Series) is the second-highest level of professional competition in NASCAR today.

 

International Motor Sports Association (IMSA)

 

The International Motorsports Association (IMSA) is an auto racing sanctioning body based in Daytona Beach, Florida, United States. Beginning in 2014, IMSA s the sanctioning body of the Tudor United Sports Car Championship the premier series resulting from the merger of Grand Am and the American LeMans Series presented by Tequilia Patron.

 

ARCA

 

The ARCA Racing Series powered by Menards is American stock car series, the premier division of the ARCA. It is considered professional league of stock car racing, perhaps two steps down from the top-level NASCAR Sprint Cup & Nationwide Series. Though some events occur the same weekend as NASCAR events, the Series is not affiliated with NASCAR.

 

Revenues

 

We expect to have three revenue streams for our business.

 

PRODUCTION SERVICES

 

In 2012, we commenced offering consulting and management services to potential clients that wish to participate in motorsports racing. Our services include providing, sourcing and managing a full "turnkey" racing car and race team, and all ancillary equipment and services to enable a client to participate in a racing event as a Team Owner, or providing management of, or access to, any part of equipment or human services required to participate in a racing event, including:

 

· fully prepared racing cars
· decaling the race cars
· driver(s)
· crew chiefs
· mechanic crews
· "over the wall" pit crews
· liaison between the client and the sanctioning body (entry fees, equipment specifications and membership)
· pre- and post-race social events

 

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Our fees for this management ranges from 5% to 10% of the total budget for the event.

 

On January 1, 2014, the Company entered into an event services agreement with Carolina Pro Am Services, Inc., ("Carolina") a company owned and controlled by Richard Ware who is also the owner and controller of a Rick Ware Racing LLC. Rick Ware Racing LLC is the owner of 16.6% of our issued and outstanding common shares. During the year ended December 31, 2015 the Company paid $125,500 to Carolina and $109,750 in 2014.

 

During the years ended December 31, 2014 a the company paid race consulting expenses to Speedsport Branding., Inc., a company in which the majority of outstanding shares were owned and controlled by companies owned and operated by Kevin O'Connell, the majority shareholder and CEO of the Company.

 

ADVERTISING REVENUE

 

The second potential source of revenue is from direct advertising from companies interesting advertising their product or service on our racing equipment. Though this part of our business, we offer a client access to national television, spectator sports and social media concurrently or individually depending on the racing series and venue. We believe we can attract advertising clients because the client's brand will be displayed on the following outlets:

 

National Television – NASCAR and IMSA races are live broadcasts. With their logos and brands displayed on our race vehicles, our client can expose their products or services to consumers.

 

Spectator Sports – In each racing event there are spectators that pay a gate attendance ticket fees to view events in person. With our client’s logos and brands displayed on our race vehicles, the client can expose their products or services to consumers, in this case live spectators.

 

Social Media – Through the proliferation of social media, fans, teams, sanctioning bodies, driver and spectators have access to real time information and a place to share their ideas and messaging. Our clients benefit from these activities as their logo and brand receive additional exposure and real time commentary.

 

In certain cases where a custom solution is required to accommodate the client, we will modify or revenue model and adjust fees accordingly either increased, decreased or with terms.

 

RACE PURSES

 

Revenue is expected to be derived from our winning a share of cash purses that are provided by event advertisers and sanctioning bodies. Purse for the events we participate in can range from $zero to $100,000 for the sanctioning bodies we compete within. The winning purses we have received have been in regional events only.

 

We have had no present commitments from prospective advertisers. There can be no assurance that we will be able to obtain any such sponsor revenue or management clients in the future. We have conducted limited operations to date, and our operations will continue to be limited until such time as we are able to obtain additional funds to carry out our overall business plans

 

Acquisitions of Competition Equipment

 

In June of 2014, we acquired two (2) NASCAR type stock cars for competition in SVRA vintage racing events. The first race car is considered a “complete roller”. A “complete roller” is a purpose built race car that is complete with all of the required racing components in place minus a competition engine and transmission. The engine and transmission can be purchased or leased.

 

The second racing vehicle our company acquired is a “turnkey “ NASCAR type road course stock car acquired in with all racing components including a racing engine and transmission.

 

The NASCAR stock cars were acquired from Cassin Farlow, LLC for 1,200,000 common shares on May 1, 2014. Cassin Farlow’s majority shareholder is Augustus B. O’Connell, father of Kevin O’Connell.

 

In addition, in June of 2014, we acquired a Ford "BOSS" road racing Mustang race car used in competition in the Grand Am Rolex Series. This model Boss Mustang is a custom built model specially configured for road racing. We intend to use this vehicle in SVRA Vintage racing competition. We acquired the Ford BOSS Mustang for $200,000. The debt of $200,000 was immediately converted into 1,333,333 common shares of the Company at a conversion rate of $0.15 per share pursuant to a debt to equity conversion agreement executed on May 1, 2014.

 

Operating Budget

 

Expected management estimates for the cost of operating the business through March 31, 2017 will require additional capital of up to Two Hundred Fifty Thousand dollars ($250,000) consisting of: $20,000 for registration and licenses required for entry in sanctioned racing events; $20,000 for travel and lodging; $20,000 for marketing and branding; $30,000 for legal and accounting; $15,000 for engineers and consultants; $15,000 for parts, $60,000 for engine and transmission leases. $30,000 for fuels and tires; $10,000 for racecar transporter travel; $20,000 for debt service of all Company notes payable; and $10,000 in air and rental cars.

 

  14  
 

 

In future events, we will determine what chassis, car, engine and transmission we intend enter. Our decision will be based upon the characteristics of the race venue and the suitability of the chassis and combination to race at the particular track and expected conditions. The limitations of our operating budget will also be a factor.

 

Our ability to attract advertisers and management clients will be dependent upon the success of our racecars in the races we enter. We believe that if our cars are successful, or finish within the top 10 finishing places in any race, our ability to attract business will be enhanced. Our past record of inconsistent finishing places, has diminished our ability to attract regular business.

 

In addition, we have received revenue for the events in which we qualified to enter for races during the periods of 2008 through 2015. Our losses from inception through the period ended December 31, 2015 was $2,779,812.

 

For the year ended December 31, 2015 we had limited revenue from marketing or sponsorships and had limited NASCAR purse winnings. We incurred a loss of $306,957 which represented a decrease from ($647,868) for the year ended December 31, 2014. The decrease in loss for 2015 is attributable to a decrease in racing events entered during the year for which the Company incurred race related expenses and a decrease in related party expenses.

 

Our auditor's report has expressed substantial doubt about our ability to continue as a going concern.

 

Relationship with our majority shareholder

 

Mr. O’Connell, through his majority control of GPP, which owns 5,357,754 shares or (67.6%) of our outstanding common stock, controls the majority of our outstanding shares of common stock. Our director and officers collectively own 5,357,754 shares or 67.6% of our outstanding common stock.


Since the inception of the company we have borrowed monies from General Pacific Partners, LLC, (“GPP”), Devcap Partners, LLC, Kevin P. O’Connell and his affiliates.

 

On September 1, 2009, the Company established a $600,000 unsecured line of credit with GPP. The terms of the Line of Credit provide for interest at 8% per annum on all balances; quarterly interest payments outstanding balances and is limited to a maximum quarterly draw down on the line of $100,000. On June 2, 2014 $295,306 due on the Line of Credit was converted into 1,968,704 shares of common stock in the Company. As of December 31, 2015 there was $444,636 available on the GPP line of credit. GPP is a company whose management and majority membership interests are held by Mr. O’Connell, the President of the Company.

 

On August 1, 2013 the Company established a $300,000 unsecured line of credit with Devcap. The terms of the Line of Credit provide for interest interest free loan. at. On June 2, 2014, $85,690 due on the Line of Credit was converted into 571,267 shares of common stock in the Company. As of December 31, 2015, there was $0 available on the Devcap line of credit. Devcap is a company whose management and majority membership interests are held by Mr. O’Connell,

 

The Company has recurring losses from operations and our auditor has stated that there is substantial doubt about the Company's ability to continue as a going concern. Further, continued losses could cause the Company to be unable to continue in the racing industry or to meet debt obligations. (see "Risk Factors" starting on Page 6 above). The Company believes that racing requires significant capital outlays on a continual basis to successfully fund operations, but with adequate funding that profitable operations can be achieved.

 

Without additional funding, the Company could discontinue operations. We have $49,118 in cash as of December 31, 2015 and our monthly expenses are approximately $21,000. We will need to obtain additional funding to maintain continuing operations and there can be no assurance that such funding is, or will become available.

 

  15  
 

Facilities and Maintenance

 

Maintenance and race set up is an ongoing effort in auto racing. Mr. O'Connell manages the staff of independent technicians to maintain a regular schedule updates and changes to back up parts and various pit equipment needed at racing events.  Our race cars are managed for racing from a facility in Thomasville, North Carolina owned by Rick Ware, a non-affiliated party. We do not pay for our leased space.

 

There can be no assurance that our vehicles will be competitive or qualify for each, or any sanctioned event entered. If we are not as successful competitively, we could have a more difficult time attracting and maintaining advertisers, drivers and crews which in turn could impact our ability to attract and maintain advertisers. We will compete with well-established teams and there can be no assurance that we will be able to create or maintain a competitive position. In addition, there are relatively low barriers to entry into these markets and we expect to continue to face competition from new entrants into these same markets. There can be no assurance that we will be able to compete successfully in these markets.

 

Employees

 

As of December 31, 2015, we had no full-time employees. Our only employees consist of three management personnel, all of whom devote 30% or less of their time to our business affairs. We intend to hire full time employees when and if we have the financial resources to do so. Until such time as we are in a position to hire full time employees, we will hire independent contractors to perform work for us on an as needed basis. None of our employees are represented by a labor union or a collective bargaining agreement. We consider our relations with our Management employees to be good.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

Overview

 

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

 

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

 

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

 

Election under JOBS Act of 2012

 

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

 

Jumpstart Our Business Startups Act

 

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

 

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

 

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

 

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

 

  16  
 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  17  
 

 

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

 

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

 

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

 

Off-balance sheet arrangements

 

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

 

Significant Accounting Policies

 

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

 

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

 

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

 

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

 

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

 

  18  
 

 

Revenue Recognition --The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

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

 

Our revenues, to date, has been derived from advertising, and from race purses. Revenue is recognized on an accrual basis as earned under contract terms.

 

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

 

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

 

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

 

Plan of Operations

 

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

 

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

 

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

 

Going Concern

 

As of December 31, 2015, RC-1, Inc. had an accumulated deficit during development stage of $2,779,812. Also, during the year ended December 31, 2015, we used net cash of $181,788 for operating activities. These factors raise substantial doubt about our ability to continue as a going concern.

 

Management expects to raise $250,000 in capital through the issuance of debt and equity and believes it will be able to raise sufficient capital over the next twelve months to finance operations. However, there can be no assurances that the Company will be successful in this regard or will be able to eliminate its operating losses. The accompanying financial statements do not contain any adjustments which may be required as a result of this uncertainty.

 

Expected management estimates for the cost of operating the business through the middle of 2016 will require additional capital of up to Two Hundred Fifty Thousand dollars ($250,000) consisting of: $20,000 for registration and licenses required for entry in sanctioned racing events; $20,000 for travel and lodging; $20,000 for marketing and branding; $30,000 for legal and accounting; $15,000 for engineers and consultants; $15,000 for parts, $60,000 for engine and transmission leases. $30,000 for fuels and tires; $10,000 for racecar transporter travel; $20,000 for debt service of all Company notes payable; and $10,000 in air and rental cars.

 

  19  
 

 

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

 

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

 

The Company’s capital requirements consist of general working capital needs, scheduled principal and interest payments on debt when required, obligations, and capital expenditures. The Company’s capital resources consist primarily of cash generated from proceeds through the issuances of common stock. At December 31, 2015, the company had cash of approximately $49,118.

 

In September of 2009, the Company established an unsecured line of credit, with a maximum draw down limit of $600,000, with General Pacific Partners. The terms of the line of credit provide for interest at 8% per annum on all balances; quarterly interest payments on outstanding balances and is limited to a maximum quarterly draw down on the line of $100,000. The availability of funds from this line of credit is subject to the approval of Mr. O'Connell. As of December 31, 2015, a total of $155,364 has been drawn on the line of credit.

 

Results of Operations for the Years Ended December 31, 2015 and 2014

 

Revenues

 

In the years ended December 31, 2015 and 2014, we had revenues in the amounts of $1,000 and $8,300 respectively, which was a decrease of $7,300. The Company earned all of its $8,300 in revenues in 2014 from purse winnings. The Company earned all of its $1,000 in revenues in 2015 from NASCAR consulting services. The Company provided consulting services to a race team competing in a NASCAR race event. Services included management of pit crew, communications with driver, and coordinating supplies and equipment rendered to a related party to support a race team.

 

Operating Expenses.

 

Race Expenses

 

For the year ended December 31, 2015, race expenses increased to $43,118 as compared to $37,661 from the prior year ended December 31, 2014 which was an increase of $5,457. The increase was primarily the result of the increase in trying to establish race events in 2015.

 

Consulting

 

For the year ended December 31, 2015, consulting expenses decreased to $0 as compared to $138,750 from the prior year ended December 31, 2014 which was a decrease of $138,750. Consulting expense decreased primarily due to less stock being issued to consultants as compensation for services rendered as we became less dependent on outside services.

 

Consulting to related parties

 

For the year ended December 31, 2015, consulting to related parties expense decreased to $168,000 as compared to $188,850 from the prior year ended December 31, 2014 which was a decrease of $20,850. The decrease in services in 2015, which consisted of event planning, was due to a decrease in the number of events to which services were provided in 2015 as compared to 2014.

 

  20  
 

 

General and Administrative Expense

 

For the year ended December 31, 2015, general and administrative expenses increased to $57,358 as compared to $45,890 from the prior year ended December 31, 2014 which was an increase of $11,468. The increase was primarily due to depreciation expense increase.

 

Gain from sale of asset

 

For the year ended December 31, 2014 the Company had gain from the sale of assets in the amounts of $5,600 which was not present in 2015. On July 1, 2014, the Company sold an engine for $20,000 which resulted in a gain of $5,600. The buyer was an existing minority shareholder who qualifies as a related party.

 

Interest Expense

 

For the year ended December 31, 2015, interest expense increased to $39,481 as compared to $25,617 for the year ended December 31, 2014, an increase of $957. The increase in interest expense was because of slightly higher due to related parties’ balances.

 

Net Loss

 

Our net loss from operations decreased to $306,957 for the year ended December 31, 2015, from $647,868 for the year ended December 31, 2014.

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate adequate amounts of cash to meet its needs for cash. The following table provides certain selected balance sheet comparisons between December 31, 2015, and December 31, 2014:

 

    December 31,     December 31,     $     Percent  
    2015     2014     Change     Change  
Working Capital   $ (670,858 )   $ (403,901 )   $ (266,957 )     (61.9% )
Cash     49,118       27,725       21,393       56.4%  
Total current assets     49,118       27,725       21,393       56.4%  
Total assets     185,785       204,392       (18,610 )     (9.2% )
Accounts payable and accrued liabilities           14,050       (14,050 )     (100.0% )
Related Party Interest Payable     50,322       18,555       31,767       171.2%  
Lines of credit & due to related parties     534,736       391,555       143,181       26.8%  
Total current liabilities     719,976       431,626       288,350       66.8%  
Total liabilities   $ 719,976     $ 431,626     $ 288,380       66.8%  

 

Our working capital decreased by $266,957 from December 31, 2014 to December 31, 2015 mainly from additional related party debt and accrued interest on said related party debt. The Company’s assets decreased from $204,392 as of December 31, 2014 to $185,785 as of December 31, 2015 mainly from depreciation on a race vehicle which is used in marketing and operational activities.

 

Operating Activities

 

Net cash used for continuing operating activities during 2015 was $181,788 as compared to $279,761 for fiscal 2014.

 

Investing Activities

 

Net cash provided by investing activities was $20,000 for 2014 and net cash used in investing activities was $0 for fiscal 2015.

 

Financing Activities

 

For the year ended December 31, 2015, net cash provided by financing activities was $203,181 which consisted of $203,949 in proceeds from related party debt and a negative $768 in net line of credit borrowings. For the year ended December 31, 2014, net cash provided by financing activities was $256,515 which consisted of $2,186 in net proceeds from line of credit, and $254,329 in proceeds from related party debt.

 

  21  
 

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

 

We have not had any disagreements with our accountants.

 

MANAGEMENT

 

Name Age Position
Kevin P. O’Connell 48 President
David M. Jackson 72 Chief Operation Officer
Rayna Austin 25 Secretary & Treasurer

 

Kevin P. O’Connell - From 1997 through the present, Mr. O’Connell has led venture capital investments and asset management (real estate & securities) strategies with particular focus in the general capital markets consisting of private and public financing, mergers and acquisitions, and corporate restructurings. He is the founder and managing partner of General Pacific Partners, LLC, and a Southern California firm providing advisory services, direct investment and capital markets consulting. Mr. O’Connell has been a direct principal investor and active board member having managed the strategic decisions, equity/debt financing and developmental stage efforts of companies engaged in the technology, healthcare and environmental industries. He received a Bachelor of Arts (BA) from California State University, Northridge (CSUN), earned his Masters of Business Administration (MBA) from Pepperdine University and completed the Corporate Governance Program at Harvard Business School (HBS) in Boston, Ma.

 

  22  
 

 

David M. Jackson – Mr. Jackson has been involved with stock car racing for forty four years. He actively fields race cars on the West Coast for both short track and road course racing with the family business, Jackson Race Cars. In the late 1970's, he was the first car builder to construct a fiberglass body for oval track cars. Additionally, Mr. Jackson was the first West Coast car builder to construct a coil over chassis and the first racer to utilize an adjustable Watts link as a new assembly that was mounted on the back of a quick change rear end primarily used on ovals. In 1972, Jackson Race Cars was founded in Southern California by Mr. Jackson. Mr. Jackson was an early adopter of modern stock car concepts. and led early developmental efforts for the establishment of the Southwest Tour Series later sanctioned by NASCAR.

 

As a team owner, Mr. Jackson’s team is the only racing team in the history of Irwindale Speedway to win a championship in the same year in both the Late model and Superlate model divisions. His team has five Superlate Model championships as a team owner and chassis builder at Irwindale Speedway, accomplished in the first eleven years of operation. Mr. Jackson’s teams and cars have competed and won championships at many historical West Coast tracks including: Saugus Speedway, Mesa Marin, Craig Road Speedway, El Cajon Speedway, Orange Show, Riverside Raceway and Willow Springs International.

 

Mr. Jackson is the co-founder, of the Toyota Southwest Superlates Series -- a series he founded in 1993 that races exclusively at Willow Springs International Raceway. Mr. Jackson is a graduate from the University of Nevada where he earned a Bachelor of Science (BS) in Engineering.

 

Rayna Austin From February of 2014 through the present, has led an administrative support team for the Managing Director at Capstone Partners Financial and Insurance Services Firm. Ms. Austin is a graduate from the University of Nevada, Las Vegas and earned a Bachelor of Arts (BA) in Criminal Justice and a minor in Psychology.

 

Management Compensation

 

There are no written employment agreements with management. Management compensation will be determined by the board of directors based upon revenues and profits, if any, of the Company.

 

Executive Compensation

 

Our current officers receive no compensation. There are no current employment agreements between the Company and its executive officer or understandings regarding future compensation.

 

The directors and principal officers have agreed to work with no remuneration until such time as the Company receives sufficient revenues necessary to provide proper salaries. The officers and directors have the responsibility to determine the timing of remuneration for key personnel.

 

The Company does not intend to pay employee directors a separate fee for their services.

 

The following table summarized our executive compensation for the years ended December 31, 2015 and 2014.

 

Name and

Principal Position

Year Salary ($) Bonus ($)

Other Annual

Compensation ($)
(1)

All Other

Compensation ($)

 Kevin P. O'Connell

2015

2014

-0-

-0-

-0-

-0-

-0-

-0-

-0-

-0-

           
 Rayna Austin

2015

2014

-0-

-0-

-0-

-0-

-0-

-0-

-0-

-0-

           
 David M. Jackson

2015

2014

-0-

-0-

-0-

-0-

-0-

-0-

-0-

-0-

__________________

(1) Rayna Austin was appointed Secretary and Treasurer of the Company on December 1, 2014

 

Director Independence

 

Our board of directors is currently composed of three members, who do not qualify as independent directors in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information regarding the beneficial ownership of the issued and outstanding shares of our common stock as of the date of this Registration Statement by the following persons:

 

1. Each person who is known to be the beneficial owner five percent (5%) or more of our issued and outstanding shares of common stock;
2. Each of our Directors and executive Officers; and

3. All of our Directors and Officers as a group

 

Name  

No. of Shares

Owned

 

% of Stock

Outstanding

Kevin O'Connell*   5,357,754   67.6%
Rayna Austin   0   0.0%
David M. Jackson   0   0.0%
Cassin Farlow, LLC   1,210,000   9.5%
Rick Ware Racing, LLC   1,333,333   16.6%
Directors and Officers as a Group   5,357,754   63.3%

 

*Kevin P. O’Connell is the managing member of, and the majority shareholder of:

a. General Pacific Partners, LLC, which owns 2,768,704 shares.

b. Revete Capital Partners, LLC which owns 128,572 shares

c. Continental EC, LLC which owns 64,286 shares

d. Devcap Partners, LLC which owns 571,267 shares

 

Long Term Incentive Awards

 

Option Grants in Last Fiscal Year

 

We did not award options to our executive officers in 2013, 2014 and 2015 under any incentive plans.


Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

 

There have been no option exercises by our executive officers from inception to December 31, 2015.

 

  24  
 

Employment Contract and Termination of Employment Agreements

 

We have no employment agreements with any officers or employees.

 

Limitations on liability and indemnification of officers and directors

 

Our certificate of incorporation includes a provision that eliminates the personal liability of our directors for monetary damages for breach of fiduciary duty as a director, to the fullest extent permitted by Nevada Revised Statutes. Our certificate of incorporation also provides that we must indemnify our directors and officers to the fullest extent permitted by Nevada law and advance expenses to our directors and officers in connection with a legal proceeding to the fullest extent permitted by Nevada law, subject to certain exceptions. We are in the process of obtaining directors’ and officers’ insurance for our directors, officers and some employees for specified liabilities.

 

The limitation of liability and indemnification provisions in our certificate of incorporation may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. They may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though an action of this kind, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. However, we believe that these indemnification provisions are necessary to attract and retain qualified directors and officers.

 

SEC Policy on Indemnification

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

Long Term Incentive Plans

 

There are no long term -incentive plans.

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

DESCRIPTION OF SECURITIES

 

Common Stock

 

We are authorized to issue up 200,000,000 shares of which 190,000,000 are common stock, par value $0.001 and 10,000,000 are preferred stock. There are no shares of preferred stock outstanding. As of December 31, 2015, there were 7,929,581 shares of common stock outstanding. Holders of the common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available therefore. Upon the liquidation, dissolution, or winding up of our Company, the holders of common stock are entitled to share ratably in all of our assets which are legally available for distribution after payment of all debts and other liabilities and liquidation preference of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights.

 

Our Articles of Incorporation do not provide for cumulative voting rights for the election of directors, However, Section 2115 of the California General Corporation Law subjects certain foreign corporations doing business in California to various substantive provisions of the California General Corporation Law in the event that the average of its property, payroll and sales is more than 50% in California and more than one-half of its outstanding voting securities are held of record by persons residing in the State of California. Some of the substantive provisions include laws relating to annual election of directors, removal of directors without cause, removal of directors by court proceedings, indemnification of officers and directors, directors standard of care and liability of directors for unlawful distributions. The aforesaid Section does not apply to any corporation which, among other things, has outstanding securities designated as qualified for trading as a national market security on NASDAQ if such corporation has at least eight hundred holders of its equity securities as of the record date of its most recent annual meeting of shareholders. It is currently anticipated that we may be subject to Section 2115 of the California General Corporation Law which, in addition to other areas of the law, will subject us to Section 708 of the California General Corporation Law which mandates that shareholders have the right of cumulative voting at the election of directors.

 

  25  
 

Preferred Stock

 

We are authorized to issue up to 10 million shares of preferred stock. We currently have no outstanding shares of preferred stock. The board of directors has the authority, without further action by our stockholders, to issue up to 10 million shares of preferred stock in one or more series and to fix the rights, preferences and privileges thereof, including dividend rates and preferences, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by the stockholders. Although they presently have no intention to do so, the board of directors, without stockholder approval, could issue preferred stock with voting and conversion rights which could adversely affect the voting power of the holders of common stock. The issuance of preferred stock may also have the effect of delaying or preventing a change of control of us.

 

General

 

Our board of directors has the authority, without stockholder approval, to issue up to 10,000,000 shares of preferred stock in one or more series and to determine the rights, privileges and limitations of the preferred stock. The rights, preferences, powers and limitations on different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions, and purchase funds and other matters. As of the date of this Prospectus, there were no Series of Preferred Stock designated by the board of directors, nor was there any Preferred Stock outstanding.

 

PENNY STOCK

 

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

 

  · that a broker or dealer approve a person's account for transactions in penny stocks; and

 

  · the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

 

  · obtain financial information and investment experience objectives of the person; and

 

  · make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

 

  · sets forth the basis on which the broker or dealer made the suitability determination; and

 

  · that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

  · disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules will discourage investor interest in and limit the marketability of our common stock.

 

  26  
 

SELLING STOCKHOLDERS

 

The table below sets forth information concerning the resale of the shares of common stock by the Selling Stockholders. The term “Selling Stockholders” includes the persons and entities named below, and their transferees, pledges, donees, or their successors. We will file a supplement to this prospectus to name any successors to the Selling Stockholders who will use this Prospectus to resell their securities. We will not receive any proceeds from the resale of the common stock by the Selling Stockholders. Assuming the Selling Stockholders sell all the shares registered below, none of the Selling Stockholders will continue to own any shares of our common stock.

 

   

Total Number

of shares

owned prior

to offering

 

Number of

Shares being

Offered

 

Percentage of

shares owned

prior to offering

 

Percentage of

shares owned

after the offering

assuming all of the

shares are sold

 B & K Way Trust(1)   3,253    3,253   .0004   0
Craig Bentham   3,496   3,496   .0004   0
Bernard Rubin Living Trust 1995(2)   1,556   1,556   .0002   0
Greg Olafson TR Blue Sand Holding Trust DT(3)   2,460   2,460   .0003   0
Clark Claydon   2,829   2,829   .0004   0
Alan Cohen   2,499   2,499   .0003   0
Colonial Stock Transfer Company(4)   18,778   18,778   .002   0
Harrison Figueroa LLC(5)   68   68   .0000   0
Timothy Hodges   2,143   2,143   .0003   0
Rodney Hoffman   3,960   3,960   .0004   0
Barbara H Jenkins   1,259   1,259   .0001   0
Kimball Family Trust(6)   5,633   5,633   .0007   0
William T Klope   1,515   1,515   .0002   0
Michael Kuehne   1,786   1,786   .0002   0
Craig Matesky   1,786   1,786   .0002   0
Michael L. Meyer TR Michael L. Meyer Living TR(7)   4,911   4,911   .0006   0
Philip Roger Millennium Trust Co LLC Cust FBO(8)   2,014   2,014   .0003   0
Chester Montgomery   3,540   3,540   .0004   0
George Mottel   1,981   1,981   .0002   0
Russell Neinast   3,974   3,974   .0004   0
Douglas B. O'Dell   714   714   .0001   0
Rafael Penenuri   4,944   4,944   .0007   0
RJW Investments LLC(9)   2,462   2,462   .0003   0
Robert D Harrison TR (Patro)(10)   3,959   3,959   .0004   0
Phillip Rogers   2,381   2,381   .0003   0
Richard Salvato   1,927   1,927   .0002   0
Steve Shaffer   2,536   2,536   .0003   0
Stradtman Family Trust(12)   499   499   .0001   0
Andrew Stupin   3,571   3,571   .0004   0
Richard Tantimoto   2,450   2,450   .0003   0
Edward Thein   2,927   2,927   .0004   0
USMTL, LLC(13)   10,000   10,000   .001   0
Rick Ware   1,333,333   1,333,333   16.8   0
Jeffry Bash   233,333   233,333   3.00   0
Totals   1,674,477   1,674,477   19.8125   0
                 

 

(1) Bruce & Kay Way has full investment authority

(2) Bernard Rubin has full investment authority 

(3) Greg Olafson has full investment authority

(4) Jason Carter has full investment authority

(5) Robert Harrison has full investment authority

(6) Dr. Steven Kimball has full investment authority

(7) Michael L. Meyer has full investment authority

(8) Philip Rogers has full investment authority

(9) Robert Waltos has full investment authority

(10) Robert Harrison has full investment authority

(11) Martin Stradtman has full investment authority

(12) Roy Montgomery has full investment authority

 

  27  
 

PLAN OF DISTRIBUTION

 

The selling stockholders may, from time to time, sell all or a portion of the shares of common stock on any market upon which the common stock may be quoted, in privately negotiated transactions or otherwise. Our common stock is not currently listed on any national exchange or electronic quotation system. To date, no actions have been taken to list our shares on any national exchange or electronic quotation system. Because there is currently no public market for our common stock, the selling stockholders will sell their shares of our common stock at prevailing market prices or privately negotiated prices. There can be no assurance that the Company will be approved for listing on the OTC Bulletin Board. The shares of common stock may be sold by the selling stockholders by one or more of the following methods, without limitation:

 

(a) block trades in which the broker or dealer so engaged will attempt to sell the shares of common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

(b) purchases by broker or dealer as principal and resale by the broker or dealer for its account pursuant to this prospectus;

 

(c) an exchange distribution in accordance with the rules of the exchange or quotation system;

 

(d) ordinary brokerage transactions and transactions in which the broker solicits purchasers;

 

(e) privately negotiated transactions; and

 

(f) a combination of any aforementioned methods of sale.

 

The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144.

 

In the event of the transfer by any selling stockholder of his or her shares to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling stockholder who has transferred his or her shares.

 

In effecting sales, brokers and dealers engaged by the selling stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from the selling stockholders or, if any of the broker-dealers act as an agent for the purchaser of such shares, from the purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with the selling stockholders to sell a specified number of the shares of common stock at a stipulated price per share. Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfill the broker-dealer commitment to the selling stockholders if such broker-dealer is unable to sell the shares on behalf of the selling stockholders. Broker-dealers who acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above. Such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. In connection with such re-sales, the broker-dealer may pay to or receive from the purchasers of the shares, commissions as described above.

 

No broker dealer received any securities as underwriting compensation.

 

The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

   

From time to time, the selling stockholders may pledge their shares of common stock pursuant to the margin provisions of their customer agreements with their brokers. Upon a default by a selling stockholder, the broker may offer and sell the pledged shares of common stock from time to time. Upon a sale of the shares of common stock, the selling stockholders intend to comply with the prospectus delivery requirements, under the Securities Act, by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act which may be required in the event any selling stockholder defaults under any customer agreement with brokers.

 

All documents subsequently filed by the RC-1, Inc.(the "Company") pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the termination of this offering shall be deemed to be incorporated by reference into this prospectus.

 

To the extent required under the Securities Act, a post-effective amendment to this registration statement will be filed, disclosing, the name of any broker-dealers, the number of shares of common stock involved, the price at which the common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out in this prospectus and other facts material to the transaction. In addition, a post-effective amendment to this Registration Statement will be filed to include any additional or changed material information with respect to the plan of distribution not previously disclosed herein.

 

  28  
 

 

 

We, and the selling stockholders, will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as the selling stockholders are distribution participants and we, under certain circumstances, may be a distribution participant, under Regulation M.

 

The anti-manipulation provisions of Regulation M under the Securities Exchange Act of 1934 will apply to purchases and sales of shares of common stock by the selling stockholders, and there are restrictions on market-making activities by persons engaged in the distribution of the shares. Under Regulation M, a selling stockholder or its agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while they are distributing shares covered by this prospectus. Accordingly, the selling stockholder is not permitted to cover short sales by purchasing shares while the distribution it taking place. We will advise the selling stockholders that if a particular offer of common stock is to be made on terms materially different from the information set forth in this Plan of Distribution, then a post-effective amendment to the accompanying registration statement must be filed with the Securities and Exchange Commission. All of the foregoing may affect the marketability of the common stock.

 

All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling stockholders, the purchasers participating in such transaction, or both.

 

Any shares of common stock covered by this prospectus that qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.

 

LEGAL PROCEEDINGS

 

We are not currently a party to any legal proceedings nor are any contemplated by us at this time.

 

LEGAL MATTERS

 

The validity of the shares of common stock being offered hereby will be passed upon for us by The Bingham Law Group APC., Carlsbad, California.

 

FORWARD-LOOKING STATEMENTS

 

This prospectus, any prospectus supplement and the documents incorporated by reference in this prospectus contain forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events.

 

In some cases, you can identify forward-looking statements by words such as "may," "should," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

 

Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

 

  29  
 

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Our Articles of Incorporation, as amended, provide to the fullest extent permitted by Nevada law, our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director's or officers fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended, is to eliminate our rights and our shareholders (through shareholders' derivative suits on behalf of our Company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our Articles of Incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

 

EXPERTS

 

Pritchett, Siler & Hardy PC, have audited, as set forth in their report thereon appearing elsewhere herein, our financial statements at December 31, 2015 and 2014 that appear in this prospectus. The financial statements referred to above are included in this prospectus with reliance upon the auditors' opinion based on their expertise in accounting and auditing.

 

The Bingham Law Group, Carlsbad California has acted as legal counsel for us in connection with this Offering.

 

AVAILABLE INFORMATION

 

We have filed a registration statement on Form S-1 under the Securities Act of 1933, as amended, relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of RC-1, Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission.

 

Our fiscal year ends on December 31. We plan to furnish our shareholders annual reports containing audited financial statements and other appropriate reports, where applicable. In addition, we intend to become a reporting company and file annual, quarterly and current reports, and other information with the SEC, where applicable. You may read and copy any reports, statements, or other information we file at the SEC's public reference room at 100 F. Street, N.E., Washington D.C. 20549-3561. You can request copies of these documents, upon payment of a duplicating fee by writing to the SEC or by requesting copies from the Company by submitting your request to the Company at 110 Sunrise Ceneter Drive, Thomasville, NC 27360. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC's Internet site at http\\www.sec.gov.

 

 

  30  
 

 

 

RC-1, INC.

 

 

 

INDEX TO FINANCIAL STATEMENTS F-1
   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-2
   
Balance Sheets as of December 31, 2015 and December 31, 2014 F-3
   
Statements of Operations for the years ended December 31, 2015 and December 31, 2014 F-4
   
Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2015 and December 31, 2014 F-5
   
Statements of Cash Flows for the years ended December 31, 2015 and December 31, 2014 F-6
   
Notes to Financial Statements F-7
   
   
   
   

 

 

 

 

 

  F- 1  
 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Board of Directors

RC-1, Inc.

110 Sunrise Center Drive

Thomasville, NC 27360

 

We have audited the accompanying balance sheets of RC-1 Inc. as of December 31, 2015 and 2014 and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all material respects, the financial position of RC-1 as of December 31, 2015 and 2014 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered continuing losses and has yet to establish a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Pritchett, Siler and Hardy PC

 

Pritchett, Siler and Hardy PC

Farmington Utah

April 27, 2016

 

 

 

 

  F- 2  
 

 

RC-1, Inc.

BALANCE SHEETS

 

 

 

    December 31, 2015     December 31, 2014  
ASSETS            
             
Current assets            
Cash   $ 49,118     $ 27,725  
Total current assets     49,118       27,725  
                 
Fixed assets – net     136,667       176,667  
                 
Total Assets   $ 185,785     $ 204,392  
                 
LIABILITIES & STOCKHOLDERS' DEFICIT                
                 
Current liabilities                
Accounts payable   $     $ 14,050  
Accrued payables - related party     120,000       60,000  
Line of credit     76,459       77,226  
Due to related parties     458,277       254,329  
Accrued interest payable     14,918       7,466  
Accrued interest payable - related party     50,322       18,555  
                 
Total current liabilities     719,976       431,626  
                 
Total Liabilities     719,976       431,626  
                 
Stockholders' Deficit                
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding            
Common stock, $.001 par value; 190,000,000 shares authorized; 7,929,581 and 7,929,581 shares issued and outstanding, respectively     792       792  
Additional paid in capital     2,244,829       2,244,829  
Accumulated Deficit     (2,779,812 )     (2,472,855 )
                 
Total Stockholders' Deficit     (534,191 )     (227,234 )
                 
Total Liabilities and Stockholders' Deficit   $ 185,785     $ 204,392  

 

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

 

 

 

  F- 3  
 

 

RC-1, Inc.

STATEMENTS OF OPERATIONS

 

 

    Year Ended     Year Ended  
    December 31, 2015     December 31, 2014  
             
Revenues   $ 1,000     $ 8,300  
Cost of revenues           -  
      1,000       8,300  
                 
Race Expenses     43,118       37,661  
Consulting     -       138,750  
Consulting - related parties     168,000       188,850  
General and administrative     57,358       45,890  
      268,476       411,151  
                 
Gain (loss) from operations     (267,476 )     (402,851 )
                 
Other income (expense):                
Credit Guarantee Fee           (225,000)  
Gain on sale of fixed assets – related party           5,600  
Interest expense     (39,481 )     (25,617 )
      (39,481 )     (245,017 )
                 
Income (loss) before income taxes     (306,957 )     (647,868 )
                 
Provision for income tax            
                 
Net income (loss)   $ (306,957 )   $ (647,868 )
                 
Net income (loss) per share                
(Basic and fully diluted)   $ (0.04 )   $ (0.13 )
                 
Weighted average number of common shares outstanding     7,929,581       5,096,931  

 

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

 

  F- 4  
 

 

RC-1, Inc.

STATEMENTS OF STOCKHOLDERS' DEFICIT

For the years ended December 31, 2014 and 2015

 

 

    Common Stock                    
          Amount ($.0001)     Additional Paid in     Accumulated     Stockholders’  
    Shares     Par)     Capital     Deficit     Deficit  
                                         
Balances at December 31, 2013     304,336     $ 30     $ 1,281,804     $ (1,824,987 )   $ (543,153 )
Shares issued for cancellation of related party debt     3,339,971       334       500,663             500,996  
Asset purchase     2,533,333       253       199,747             200,000  
Shares issued for services     251,941       25       37,765             37,790  
Shares issued for related party LOC guarantee fee     1,500,000       150       224,850             225,000  
Loss for the year                       (647,868 )     (647,868 )
                                         
Balances at December 31, 2014     7,929,581     $ 792     $ 2,244,829     $ (2,472,855 )   $ (227,234 )
                                         
Loss for the year                       (306,957 )     (306,957 )
                                         
Balances December 31, 2015     7,929,581     $ 792     $ 2,244,829     $ (2,779,812 )   $ (534,191 )

 

 

 

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

 

 

 

 

 

 

  F- 5  
 

 

RC-1, Inc.

STATEMENTS OF CASH FLOWS

   

 

    Year Ended     Year Ended  
    Dec. 31, 2015     Dec. 31, 2014  
Cash Flows From Operating Activities:                
Net income (loss)   $ (294,050 )   $ (647,868 )
                 
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:                
Gain on sale of assets - related party           (5,600)  
Depreciation     40,000       25,133  
Stock issued for services           37,791  
Credit guarantee fee           225,000  
Increase (decrease) in accounts payable     (14,050)       6,550  
Increase in accrued payables - related party     60,000       60,000  
Increase in accrued interest     5,576       1,692  
Increase in accrued interest - related party     20,736       17,541  
Net cash provided by (used for) operating activities     (181,788 )     (279,761 )
                 
Cash Flows From Investing Activities:                
Proceeds from sale of asset - related party           20,000  
Net cash provided by (used for) investing activities           20,000  
                 
                 
Cash Flows From Financing Activities:                
Line of credit – borrowings     2,366       4,934  
Line of credit – payments     (3,134 )     (2,748 )
Due to related parties (net)     203,949       254,329  
Net cash provided by (used for) financing activities     203,181       256,515  
                 
Net Increase (Decrease) In Cash     21,393       (3,246 )
                 
Cash At The Beginning Of The Period     27,725       30,971  
                 
Cash At The End Of The Period   $ 49,118     $ 27,725  
                 
                 
Schedule Of Non-Cash Investing And Financing Activities                
Common stock issued for services   $     $ 37,791  
Related party debt converted to capital   $     $ 500,996  
Assets acquired with equity   $     $ 200,000  
                 
Supplemental Disclosure                
Cash paid for interest   $     $ 6,383  
Cash paid for income taxes   $     $  

 

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

 

 

  F- 6  
 

 

RC-1, Inc.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended December 31, 2015 and 2014

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

 

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

 

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

 

On March 4, 2014, the Company declared a reverse stock split of 1 share for 70 shares outstanding. The authorized number of shares was increased to 200,000,000 and the par value was changed to $.0001 per share. All references to the number of shares have been retroactively restated to reflect the split, to all periods presented.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

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

  

Use of Estimates

 

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

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits.

 

Property and equipment

 

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

 

Long-Lived Assets

 

In accordance with FASB ASC 360, “Property, Plant, and Equipment” which establishes the accounting for impairment of long-lived tangible and intangible assets other than goodwill, the Company reviews for impairment when facts or circumstances indicate that the carrying value of long-lived assets to be held and used may not be recoverable. If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on various valuation techniques, including the discounted value of estimated future cash flows. The Company reports impairment cost as a charge to operations at the time it is identified. During the years ended December 31, 2015 and 2014 the Company determined that there was no impairment of long-lived assets.

 

 

  F- 7  
 

 

Financial Instruments

 

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

 

Revenue recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

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

 

Income tax

 

The Company accounts for income taxes pursuant to FASB ASC 740, “Income Taxes”. Under FASB ASC 740 deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

FASB ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under FASB ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. At December 31, 2015 and 2014, there were no unrecognized tax benefits.

 

Net income (loss) per share

 

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive For the years ended December 31, 2015 and 2014, there were no potentially dilutive shares.

 

Products and services, geographic areas and major customers

 

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

 

 

  F- 8  
 

 

Concentrations of debt financing

 

The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 85.7% of the Company line of credit balances. See Note 7 for further discussion of line of credit terms and relationships.

 

Stock based compensation

 

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

 

Recent Accounting Pronouncements

 

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

 

NOTE 3. GOING CONCERN

 

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

  

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

 

NOTE 4. FIXED ASSETS

 

Fixed asset values recorded at cost are as follows:

 

    December 31, 2015     December 31, 2014  
                 
Equipment   $ 200,000     $ 200,000  
Less: Accumulated depreciation     (63,333 )     (23,333 )
                 
Fixed assets, net   $ 136,667     $ 176,667  

 

Depreciation expense for the year ended December 31, 2015 and 2014 was $40,000 and $25,133, respectively. During the year ended December 31, 2014, the Company acquired race cars to be used in promotional operations. The Company recorded a cost basis of $200,000.

 

In July 2014, the Company sold an engine for $20,000 resulting in a gain of $5,600. The buyer was an existing minority shareholder who qualifies as a related party.

 

 

 

 

  F- 9  
 

 

NOTE 5. LINES OF CREDIT

  

    December 31, 2015     December 31, 2014  
TVP Investments, LLC   $ 75,000     $ 75,000  
Wells Fargo     1,458       2,226  
      76,458       77,226  
Less: current portion     (76,458 )     (77,226 )
Long-term portion   $     $  

 

On October 15, 2012, the Company entered into a revolving line of credit agreement with TVP Investments, LLC, a Georgia Limited Liability Company in the amount up to $500,000. The line of credit is unsecured, bears interest of 8% and had a maturity date of October 15, 2014. On October 15, 2014, the Company and TVP Investments, LLC agreed that it was in the best interest of both parties to extend the maturity date until October 15, 2017.

 

The Company has a business line of credit up to $3,000 with Well Fargo bank. The line of credit is unsecured with a variable interest rate of approximately 27.99%.

 

As of December 31, 2015 and 2014, the Company had line of credit balances of $76,458 and $77,226, respectively. As of December 31, 2015 and 2014, the Company had accrued interest on these lines of credit in the amounts of $14,918 and $7,466, respectively.

 

NOTE 6. STOCKHOLDERS’ EQUITY

 

 

The Company was incorporated on May 9, 2009 at which time the Company authorized 125,000,000 shares of common stock with $.001 par value. On March 4, 2014, the Company declared a reverse stock split of 1 share for 70 shares outstanding. The authorized number of common shares was increased to 190,000,000 and the par value was changed to $.0001 per share. All references to the number of shares have been restated to reflect the split. There are 10,000,000 shares of preferred stock authorized with a $.001 par value, none of which are outstanding.

 

On March 15, 2014, the Company paid a guarantee fee of $225,000 with 1,500,000 shares of common stock as part of its line of credit agreement with a related party owned and operated by the CEO and majority shareholder.

 

On May 1, 2014, the Company purchased two race cars for promotional operations in exchange for 1,200,000 post reverse split shares. The race cars were purchased from a company owned by a close relative of the CEO at the related party’s historical cost basis determined to be nominal.

 

On May 1, 2014, the Company purchased a race car valued at historical cost for promotional operations for a $200,000 note, and entered into a debt conversion agreement on June 15, 2014 to convert the $200,000 of outstanding debt into 1,333,333 shares. As a result of this purchase, the owner of the company that sold the race car became an existing minority shareholder who qualifies as a related party as of December 31, 2014.

 

On June 2, 2014, the Company entered into a debt conversion agreement to convert $295,306 of outstanding debt into 1,968,704 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

 

  F- 10  
 

 

 

On June 2, 2014, the Company entered into a debt conversion agreement to convert $85,690 of outstanding debt into 571,267 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

On June 5, 2014, the Company entered into a debt conversion agreement to convert $120,000 of outstanding related party accounts payable into 800,000 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

On June 5, 2014, the Company issued 233,333 for consulting services rendered by a third party totaling $35,000.

 

On December 19, 2014, the Company issued 18,608 for transfer agent services rendered by its transfer agent totaling $2,791.

  

NOTE 7. RELATED PARTY TRANSACTIONS

 

Consulting expense to related parties

 

On January 1, 2012, the Company executed a three (3) year consulting agreement with a company owned and operated by the CEO and majority shareholder to provide consulting services in the motor sports marketing industry. The consulting agreement requires a $5,000 monthly fee and can be terminated by either party pursuant to a 60 day notice. As of December 31, 2015 and 2014, the Company had an accrued payable balance due to this related party of $120,000 and $60,000, respectively. During the years ended December 31, 2015 and 2014, the Company incurred $60,000 of related party consulting expense respectively.

 

On January 1, 2014, the Company entered into an event services agreement with an event services company that is owned and controlled by an individual who is also the owner and controller of a separate company that became an owner of 16.6% of the Company's issued and outstanding common shares on June 15, 2014. For the year ended December 31, 2015 the Company paid $125,500 in related party consulting services. From June 15, 2014 to the year ended December 31, 2014, the Company paid $109,750 in consulting fees to this event services company.

 

During the year ended December 31, 2014, the Company paid race consulting expenses of $16,100 to Speedsport Branding, Inc., a company in which the majority of outstanding shares were owned and controlled by companies owned and operated by Kevin O'Connell, the majority shareholder and CEO of the Company.

 

Purchases and sales of fixed assets from related parties

 

On May 1, 2014, the Company purchased two race cars to be used in operational activities in exchange for 1,200,000 common shares of the Company. The two automobiles sold to the Company were owned by a relative of the CEO and majority shareholder of the Company.

 

On May 1, 2014, the Company purchased a custom built 2012 Ford Boss Mustang race car to be used in operational activities for a total price of $200,000 paid with a promissory note and valued at the historical cost to the related party. The debt of $200,000 was converted into 1,333,333 common shares of the Company at a conversion rate of $0.15 per share pursuant to a debt to equity conversion agreement executed on June 15, 2014. The automobile sold to the Company was owned by an existing minority shareholder who qualifies as a related party.

 

On July 1, 2014, the Company sold an engine for $20,000 which resulted in a gain of $5,600. The buyer was an existing minority shareholder who qualifies as a related party.

 

Due to related parties

 

On October 1, 2009, the Company entered into a line of credit agreement for up to $600,000 with a related party owned and operated by the CEO and majority shareholder that also provides motor sports marketing industry consulting services to the Company as needed. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. The loan bears interest at eight percent (8%) per annum. Interest for this line of credit has been waived by the lender. As of December 31, 2015 and 2014, the Company owed $155,364 and $0 respectively, in operating advances to this related party. On June 2, 2014, the Company entered into a debt conversion agreement with this related party to convert $295,306 of outstanding debt into 1,968,704 shares based on a share price of $0.15 share. As part of the Company’s line of credit arrangements with this company, the Company paid a guarantee fee of $225,000 on March 15, 2014. This fee was paid with 1,500,000 shares of common stock based on a share price of $0.15 per share. As of December 31, 2015 and 2014, the Company had accrued interest of $5,532 and $0, respectively.

 

 

 

 

  F- 11  
 

 

On August 5, 2013, the Company entered into a line of credit agreement for up to $600,000 with a related party owned and operated by the CEO and majority shareholder. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. Starting January 1, 2014, the loan began bearing interest of eight (8%) interest per annum. As of December 31, 2015 and 2014, the Company owed $302,914 and $254,329, respectively, in operating advances to this related party. On June 2, 2014, the Company entered into a debt conversion agreement with this related party to convert $85,690 of outstanding debt into 571,267 shares based on a share price of $0.15 per share. As of December 31, 2015 and 2014, the Company had accrued interest on this line of credit in the amounts of $44,790 and $18,556, respectively.

 

NOTE 8. INCOME TAXES

 

The following table presents the current and deferred income tax provision (benefit) for federal and state income taxes:

 

    2015     2014  
Current tax provision:                
Federal   $     $  
                 
Deferred tax provision (benefit):                
Net Operating Losses     (46,044 )     (97,180 )
Change in valuation allowance     46,044     97,180
                 
Total provision for income tax   $     $  

 

Current income taxes are based upon the year’s income taxable for federal and state tax reporting purposes. Deferred income taxes (benefits) are provided for certain income and expenses, which are recognized in different periods for tax and financial reporting purposes.

 

Deferred tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income. The Company’s deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers would be limited under the Internal Revenue Code should a significant change in ownership occur within a three year period. In 2014 and 2013 the Company’s tax losses were reduced by stock for services expense. There were no depreciation differences.

 

At December 31, 2015 and 2014, the Company had net operating loss carryforwards of approximately $2,780,000 and $2,473,000, respectively, which begin to expire in 2029. The deferred tax assets arising from the net operating loss carryforwards are approximately $416,972 and $370,928 as of December 31, 2015 and 2014, respectively. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income and tax planning strategies in making this assessment. Based on management’s analysis, they concluded not to retain a deferred tax asset since it is uncertain whether the Company can utilize this asset in future periods. Therefore, they have established a full reserve against this asset. The change in the valuation allowance in 2015 and 2014 was approximately $46,044 and $97,180, respectively.

 

 

 

  F- 12  
 

 

 

A reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total benefit for income taxes at December 31, 2015 and 2014 is as follows:

  

    2015     2014  
Expected tax at 15%   $ 46,044     $ (97,180 )
Change in valuation allowance     (46,044 )     97,180  
Provision for income taxes   $     $  

 

The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2015 and 2014, the Company had no accrued interest and penalties related to uncertain tax positions.

 

The Company is subject to taxation in the U.S. and North Carolina. Our tax years for 2009 and forward are subject to examination by tax authorities. The Company is not currently under examination by any tax authority.

 

Management has evaluated tax positions in accordance with FASB ASC 740, and has not identified any tax positions, other than those discussed above, that require disclosure.

 

NOTE 9. SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that there are no material subsequent events that exist through the date of this filing.

 

 

 

 

  F- 13  
 

 

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

 

ITEM 13. EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The following table sets forth our expenses in connection with this registration statement. All of these expenses are estimates, other than the fees and expenses of legal counsel and filing fees payable to the Securities and Exchange Commission. All expenses of this offering are being paid by the Company.

 

Expense or Fee    

Amount

to Be Paid

 
SEC Registration Fee   $ 21  
Printing and Edgarizing Expenses   $ 3,500  
Legal Fees and Expenses   $ 25,000  
Accounting Fees and Expenses   $ 10,000  
Transfer Agent   $ 2,500  
Miscellaneous   $ 1,500  
TOTAL   $ 42,521  

 

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

ARTICLE VI of our Bylaws states that to the extent and in the manner  permitted  by the  laws of the State of Nevada, and  specifically   as  is  permitted  under  the  Nevada Revised Statutes pertaining to Corporations, the  corporation  shall  indemnify  any person who was or is a party  or is  threatened  to be  made a  party  to any  threatened,  pending  or completed action, suit or proceeding, whether civil, criminal, administrative or investigative,  other than an action by or in the right of the  corporation,  by reason of the fact that such person is or was a director,  officer,  employee or agent of the corporation, or is or was serving at the request of the corporation as a director,  officer, employee or agent of another corporation,  partnership, joint venture, trust or other enterprise against expenses,  including attorneys' fees, judgments, fines and amounts paid in settlement.

 

We have been advised that in the opinion of the Securities and Exchange Commission, insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, such indemnification is against public policy as expressed in the Act and is therefore unenforceable. In the event a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

 

The following sets forth information regarding all sales of our unregistered securities during the past three years. All of these shares were exempt from registration under the Securities Act by reason of Section 4(2) of the Securities Act, or Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution of the securities, and appropriate legends were affixed to the share certificates and warrants issued in such transactions. All recipients had adequate access, through their relationships with us or otherwise, to information about us. Unless otherwise indicated, the issuances of the securities described below were affected without the involvement of underwriters .

 

On March 14, 2013, the Company issued 2,829 shares for cash of $29,712.

 

On March 14, 2013, the Company repurchased and retired 1,620 shares at a cost of $17,000.

 

On September 16, 2013, the Company issued 19,623 shares for services rendered by unrelated parties valued at $206,009.

 

On September 16, 2013, the Company issued 28,571 shares for consulting services rendered by an entity 100% owned by the CEO and majority shareholder of the Company totaling $166,600. This resulted in a loss on settlement of $133,400 based on the Company’s contemporaneous share price history.

 

On October 14, 2013, the Company canceled 10,000 founder shares at no cost.

 

  II- 1  
 

On May 1, 2014, the Company purchased two race cars for promotional operations from a significant shareholder of the Company in exchange for 1,200,000 post reverse split shares. The race cars were purchased from a company owned by a close relative of the CEO as payment for purchases of two race cars purchased.

 

On May 1, 2014, the Company purchased a race car for promotional operations, and entered into a debt conversion agreement on June 15, 2014 to convert $200,000 of outstanding debt into 1,333,333 shares. As a result of this purchase, the owner of the company that sold the race car became an existing minority shareholder who qualifies as a related party as of December 31, 2014.

 

On June 2, 2014, the Company entered into a debt conversion agreement to convert $295,306 of outstanding debt into 1,968,704 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

On June 2, 2014, the Company entered into a debt conversion agreement to convert $85,690 of outstanding debt into 571,267 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

On June 5, 2014, the Company entered into a debt conversion agreement to convert $120,000 of outstanding related party accounts payable into 800,000 shares. The outstanding debt was owed to a company 100% owed by the CEO and majority shareholder.

 

On June 5, 2014, the Company issued 233,333 for consulting services rendered by a third party totaling $35,000.

 

On December 19, 2014, the Company issued 18,608 for transfer agent services rendered by its transfer agent totaling $2,791.

 

All of the above offerings and sales were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of the Company or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment.

 

  II- 2  
 

ITEM 16. EXHIBITS.

 

The following exhibits are included as part of this Form S-1. References to "the Company" in this Exhibit List mean RC-1, Inc., a Nevada corporation.

 

Exhibit #   Description
3(i).1   Articles of Incorporation of RC-1, Inc., as amended
3(ii).1   Corporate Bylaws for RC-1, Inc.
5.1   Legal opinion and consent of The Bingham Law Group, APC.
10.1   Line of Credit Agreement with General Pacific Partners, LLC on October 1, 2009
10.2   Consulting Agreement with General Pacific Partners, LLC on January 1, 2012
10.3   Line of Credit Agreement with TVP Investments, LLC on October 15, 2012
10.4   Management Service Agreement with Carolina Pro AM Drivers, Inc. dated January 1, 2014
10.5   Line of Credit Agreement with Devcap Partners, LLC dated August 1, 2013
23.1   Consent of the Bingham Law Group, APC. (included with Exhibit 5.1)
23.2   Consent of RC-1, Inc.’s Auditors

 

ITEM 17. UNDERTAKINGS

 

(A) The undersigned Registrant hereby undertakes:

 

(1)    ) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

i.     To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

 

ii.     To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

 

iii.     To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

Provided, however , that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial  bona fide  offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(B) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial  bona fide  offering thereof.

 

(C) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

  II- 3  
 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Riverside, State of California, on April 27, 2016.

 

  RC-1, Inc  
       
  By:  /s/ Kevin  P. O'Connell  
    Chief Executive Officer  

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

  RC-1, Inc.  
       
Date April 27, 2016 By:  /s/ Kevin P. O'Connell  
       

 

  RC-1, Inc.  
       
Date: April 27, 2016 By:  /s/ Kevin P. O'Connell  
   

Director and Chief Financial

and Accounting Officer

 

 

 

  II- 4  
 

EXHIBIT INDEX


Exhibit #   Description
3(i).1   Articles of Incorporation of RC-1, Inc., as amended
3(ii).1   Corporate Bylaws for RC-1, Inc.
5.1   Legal opinion and consent of The Bingham Law Group, APC.
10.1   Line of Credit Agreement with General Pacific Partners, LLC on October 1, 2009
10.2   Consulting Agreement with General Pacific Partners, LLC on January 1, 2012
10.3   Line of Credit Agreement with TVP Investments, LLC on October 15, 2012
10.4   Management Service Agreement with Carolina Pro AM Drivers, Inc. dated January 1, 2014
10.5   Line of Credit Agreement with Devcap Partners, LLC dated August 1, 2013
23.1   Consent of the Bingham Law Group, APC. (included with Exhibit 5.1)
23.2   Consent of RC-1, Inc.’s Auditors

 

 

 

 

 

Exhibit 3.(i).1

 

 

Certificate to Accompany Restated Articles or Amended and Restated Articles

 

 
 

 

CERTIFICATE OF

 

AMENDED AND RESTATED ARTICLES OF INCORPORATION

 

OF

 

RC-I, INC.

 

Pursuant to the provisions of Section 78.403 of the Nevada Revised Statutes , the undersigned does hereby declare and certify that:

 

1. He is the duly elected President of RC-1, Inc., a Nevada corporation.

 

2. He has been authorized and directed to execute this Certificate of Amended and Restated Articles of Incorporation of RC-1, Inc. (this "Certificate") by resolution of the board of directors adopted on March 4, 2014.

 

3. The shareholders of the corporation voted in favor of the amendments to the corporation's articles of incorporation, as set forth in the amended and restated articles of incorporation included in this Certificate, by a vote representing 71% of the voting power entitled to vote .

 

4. This Certificate correctly sets forth the text of the articles of incorporation as amended to date, and the amended and restated articles of incorporation are as follows:

 

FIRST : The name of the corporation (hereinafter called the corporation) shall be RC-1, Inc.

 

SECOND : The name of the corporation's resident agent in the State of Nevada is Registered Agents Inc. and the street address of the said resident agent where process may be served on the corporation is 401 Ryland St. Ste. 200-A Reno, NV. 89502. The mailing address and the street address of the said resident agent are identical.

 

THIRD : The corporation shall have perpetual existence.

 

FOURTH : The purposes for which the corporation is organized are to engage in any activity or business not in conflict with the laws of the State of Nevada or of the United States of America, and without limiting the generality of the foregoing, specifically, to have and to exercise all the powers now or hereafter conferred by the laws of the State of Nevada upon corporations organized and any and all acts amendatory thereof and supplemental thereto.

 

FIFTH : The aggregate number of shares of all classes of capital stock, which the corporation has authority to issue is 200,000,000 of which 190,000,000 are to be shares of common stock, $.001 par value, and 10,000,000 are to be preferred stock, 8.001 par value. The shares may be issued by the corporation from time to time as approved by the board of directors of the corporation without the approval of the stockholders except as otherwise provided by the Nevada Revised Statutes, these Articles of Incorporation, or the rules of a national securities exchange if applicable. The consideration for the issuance of the shares shall be paid to or received by the corporation in full before their issuance and shall not be less than the par value per share. The consideration for the issuance of shares shall be cash, services rendered, personal property (tangible or intangible), real property, leases of real property or any combination of the foregoing. In the absence of actual fraud in the transaction, the judgment of the board of directors as to the value of such consideration shall be conclusive. Upon payment of such consideration such shares shall be deemed to be fully paid and non-assessable. In the case of a stock dividend, the part of the surplus of the corporation, which is transferred to stated capital upon the issuance of shares as a stock dividend shall be deemed to be the consideration for their issuance.

 

(a) Except as provided in these Articles of Incorporation, or in the powers, designations preferences and relative rights of any preferred stock, the holders of the common stock shall exclusively possess all voting power. Subject to the provisions of each holder of shares of common stock shall be entitled to one vote for each share held by such holders entitled to one vote for each share held by such holders.

 

  1  
 

 

Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class or series of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and sinking fund or retirement fund or other retirement payments, if any, to which such holders are respectively entitle in preference to the common stock, then dividends may be paid on the common stock, and on any class or series of stock entitled to participate therewith as to dividends, out of any assets legally available for the payment of dividends, but only when and as declared by the board of directors of the corporation.

 

In the event of any liquidation, dissolution or winding up of the corporation, after there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class having preference over the common stock in any such event, the full preferential amounts to which they are respectively entitled, the holders of the common stock and any class or series of stock entitled to participate therewith, in whole or in part, as to distribution of assets shall be entitled, after payment or provision for payment of all debts and liabilities of the corporation, to receive the remaining assets of the corporation available for distribution, in cash or in kind.

 

Each share of common stock shall have the same relative powers, preferences and rights as, and shall be identical in all respects with, all the other shares of common stock of the corporation.

 

(b) Except as provided in these Articles of Incorporation, the board of directors of the corporation is authorized, by resolution or resolutions from time to time adopted, to provide for the issuance of preferred stock in series and to fix and state the powers, designations, preferences and relative, participating, optional or other special rights of the shares of each such series, and the qualifications, limitation or restrictions thereof, including, but not limited to determination of any of the following:

 

(1) the distinctive serial designation and the number of shares constituting such series;

 

(2) the rights in respect of dividends, if any, to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment or date or dates for dividends, and the participating or other special rights, if any, with respect to dividends;

 

(3) the voting powers, full or limited, if any, of the shares of such series;

 

(4) whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions upon which such shares may be redeemed:

 

(5) the amount or amounts payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation;

 

(6) whether the shares of such series shall be entitled to the benefits of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such funds;

 

(7) whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation and, if so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;

 

(8) the subscription or purchase price and form of consideration for which the shares of such series shall be issued; and

 

(9) whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of preferred stock and whether such shares may be reissued as shares of the same or any other series of preferred stock.

 

  2  
 

 

Each share of each series of preferred stock shall have the same relative powers, preferences and rights as, and shall be identical in all respects with, all the other shares of the corporation of the same series, except the times from which dividends on shares which may be issued from time to time of any such series may begin to accrue.

 

SIXTH : No holder of any of the shares of any class of the corporation shall be entitled as of right to subscribe for, purchase, or otherwise acquire any shares of any class of the corporation which the corporation proposes to issue or any rights or options which the corporation proposes to grant for the purchase of shares of any class of the corporation or for the purchase of any shares, bonds, securities, or obligations of the corporation which are convertible into or exchangeable for, or which carry any rights, to subscribe for, purchase, or otherwise acquire shares of any class of the corporation; and any and all of such shares, bonds, securities, or obligations of the corporation, whether now or hereafter authorized or created, may be issued, or may be reissued or transferred if the same have been reacquired and have treasury status, and any and all of such rights and options may be granted by the Board of Directors to such persons, firms, corporations, and associations, and for such lawful consideration, and on such terms, as the board of directors in its discretion may determine, without first offering the same, or any thereof, to any said holder.

 

SEVENTH : The following provisions shall apply to the conduct of meetings of and voting by the stockholders of the corporation:

 

(a) Meetings of the stockholders may be held at such place as the bylaws may provide.

 

(b) Any action required or permitted to be taken at any annual or special meeting of stockholders may be effected by written consent of stockholders entitled to vote and constituting the requisite voting power to take such an action at a meeting.

 

(c) Special meetings of the stockholders of the corporation for any purpose or purposes may be called at any time by the board of directors of the corporation, or by a committee of the board of directors which has been duly designated by the board of directors and whose power and authority include the power and authority to call such meetings but special meetings may not be called by another person or persons.

 

(d) No shares of any class or series shall have cumulative voting rights in the election of directors.

 

EIGHTH : The governing board of the corporation shall be the "Board of Directors", and any member of said board shall be a "Director."

 

The number of directors of the corporation may be increased or decreased in the manner provided in the bylaws of the corporation; provided, that the number of directors shall never be greater than 15 nor less than one (exclusive of directors, if any, to be elected by holders of preferred stock of the corporation). Exclusive of directors, if any, elected by the holders of preferred stock, all vacancies, including vacancies caused by an increase in the number of directors and including vacancies resulting from the removal of directors by the stockholders entitled to vote which are not filled by said stockholders, may be filled by the vote of a majority of the remaining directors, though less than a quorum.

 

NINTH : The personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by the Nevada Revised Statutes, as the same may be amended and supplemented.

 

TENTH : The corporation shall, to the fullest extent permitted by the Nevada Revised Statutes, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Law from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

 

  3  
 

 

TWELFTH : Upon written demand of the Corporation, each record holder of any shares of the capital stock of any class or series of the Corporation shall provide the Corporation with the name and address of each person for whom such person holds such shares as the beneficial owner, the number, class and series of the shares so held, and manner of holding such shares. Likewise, upon written demand of the Corporation, each beneficial holder of any shares of the capital stock of any class or series of the Corporation shall provide the Corporation with the name and address of any person who has an interest in such shares, directly or indirectly, and the nature of such interest. As used herein, the terms "beneficial owner" shall mean and include any person who has the sole or joint right to dispose of the shares or direct the disposal of shares, the sole or joint economic interest in the shares, or the sole or joint right to receive or direct the receipt of dividends or other distributions relating to the shares.

 

I, the undersigned, being the President of RC-1, Inc., a Nevada corporation, caused this Certificate to be executed in such capacity on December 9, 2014.

 

 

/s/ Kevin O’Connell

Kevin O’Connell, President

 

 

  4  

 

Exhibit 3.(ii).1

 

BYLAWS

 

OF

 

RC-1 INC.

 

ARTICLE I

 

Shareholders

 

Section 1.1. Annual Meetings . An annual meeting of shareholders shall be held for the election of directors on a date and at a time and place either within or without the State of California fixed by resolution of the Board of Directors. Any other proper business may be transacted at the annual meeting, except as limited by the notice requirements of subdivisions (a) and (d) of Section 601 of the California General Corporation Law.

 

Section 1.2. Special Meetings . Special meetings of the shareholders may be called at any time by the Board of Directors, the Chairman of the Board or the holders of shares entitled to cast not less than ten percent of the votes at the meeting, such meeting to be held on a date and at a time and place either within or without the State of California as may be stated in the notice of the meeting.

 

Section 1.3. Notice of Meetings . Whenever shareholders are required or permitted to take any action at a meeting a written notice of the meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each shareholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include a list of the names of the nominees intended at the time of the mailing of the notice to be presented by the Board for election.

 

Notice of a shareholders' meeting or any report shall be given either personally or by first-class mail or other means of written communication, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. The notice or report shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. An affidavit of mailing of any notice or report in accordance with the provisions of this by-law, executed by the Secretary, Assistant Secretary or any transfer agent, shall be prima facie evidence of the giving of the notice or report.

 

  1  
 

 

If any notice or report addressed to the shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders.

 

Except as otherwise prescribed by the Board of Directors in particular instances and except as otherwise provided by subdivision (c) of Section 601 of the California General Corporation Law, the Secretary shall prepare and give, or cause to be prepared and given, the notice of meetings of shareholders.

 

Section 1.4. Adjournments . When a shareholders' meeting is adjourned to another time or place, except as otherwise provided in this Section 1.4, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

 

Section 1.5. Validating Meeting of Shareholders; Waiver of Notice . The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice but not so included, if such objection is expressly made at the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof, except as required by subdivision (f) of Section 601 of the California General Corporation Law.

 

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Section 1.6. Quorum . A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders. The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. In the absence of a quorum, any meeting of shareholders may be adjourned from time to time by the vote of a majority of the shares represented either in person or by proxy, but no other business may be transacted, except as provided in this Section 1.6.

 

Section 1.7. Organization . Meetings of shareholders shall be presided over by the Chairman of the Board of Directors, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary, an Assistant Secretary, shall act as secretary of the meeting, or in their absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

Section 1.8. Voting . Unless otherwise provided in the articles of incorporation, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of shareholders. Except as otherwise provided by California law or by the articles of incorporation or these bylaws, the affirmative vote of the holders of a majority of the shares entitled to vote on the subject matter at a meeting in which a quorum is present shall be the act of the shareholders.

 

Any holder of shares entitled to vote on any matter may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, other than elections to office, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares such shareholder is entitled to vote.

 

Except as otherwise provided in the articles of incorporation and subject to the requirements of this Section 1.8, every shareholder entitled to vote at any election of directors may cumulate such shareholder's votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among as many candidates as the shareholder thinks fit. No shareholder shall be entitled to cumulate votes unless such candidate or candidates' names have been placed in nomination prior to the voting and the shareholder has given notice at the meeting prior to the voting of the shareholder's intention to cumulate the shareholder's votes. If any one shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination. In any election of directors, the candidates receiving the highest number of votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares are elected. Elections for directors need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins.

 

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Section 1.9. Shareholder's Proxies . Every person entitled to vote shares may authorize another person or persons to act by proxy with respect to such shares. Any proxy purporting to be executed in accordance with the provisions of Section 705 of the California General Corporation Law shall be presumptively valid. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this Section 1.9. Such revocation may be effected by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by the person executing the prior proxy and presented to the meeting, or as to any meeting by attendance at such meeting and voting in person by the person executing the proxy. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the corporation. A proxy may be made irrevocable under the circumstances set forth in subdivision (e) of Section 705 of the California General Corporation Law. Any form of proxy distributed to ten or more shareholders shall conform to the requirements of Section 604 of the California General Corporation Law.

 

Section 1.10. Inspectors . In advance of any meeting of shareholders the Board of Directors may appoint inspectors of election to act at the meeting and any adjournment thereof. If inspectors of election are not so appointed, or if any persons so appointed fail to appear or refuse to act, the chairman of any meeting of shareholders may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election (or persons to replace those who so fail or refuse) at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed.

 

The inspectors of election shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies, receive votes, ballots or consents, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes or consents, determine when the polls shall close, determine the result and do such acts as may be proper to conduct the election or vote with fairness to all shareholders.

 

The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

 

  4  
 

 

Section 1.11. Fixing Date for Determination of Shareholders of Record . In order that the corporation may determine the shareholders entitled to notice of any meeting or to vote or to express consent to corporate action in writing without a meeting or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days prior to the date of such meeting nor more than sixty days prior to any other action.

 

If no record date is fixed: (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held; (2) the record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given; and (3) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto or the sixtieth day prior to the date of such other action, whichever is later. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting, but the Board shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting.

 

Section 1.12. Consent of Shareholders in Lieu of Meeting . Except as otherwise provided in the articles of incorporation or in this Section 1.12, any action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

 

Directors may not be elected by written consent except by unanimous consent of all shares entitled to vote for the election of directors. Notwithstanding the foregoing sentence, except for vacancies created by removal, shareholders may fill any vacancy in the Board of Directors not filled by the Board of Directors by electing a director through written consent of a majority of outstanding shares entitled to vote.

 

Any shareholder giving a written consent, or such shareholder's proxyholder, or a transferee of the shares or a personal representative of such shareholder or its respective proxyholder, may revoke the consent by a writing received by the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary of the corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the Secretary of the corporation.

 

  5  
 

 

Unless all shareholders entitled to vote consent in writing, notice of any shareholder approval without a meeting shall be given as provided in subdivision (b) of Section 603 of the California General Corporation Law, or any successor thereof.

 

Any form of written consent distributed to ten or more shareholders shall conform to the requirements of Section 604 of the California General Corporation Law, or any successor thereof.

 

ARTICLE II

 

Board of Directors

 

Section 2.1. Powers; Number; Qualifications . The business and affairs of the Corporation shall be managed by, and all corporate powers shall be exercised by or under, the direction of the Board of Directors, except as otherwise provided in these by-laws or in the articles of incorporation. The number of directors comprising the Board of Directors shall be one (1).

 

Section 2.2. Election; Term of Office; Resignation; Removal; Vacancies. At each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. Any director may resign effective upon giving written notice to the Chairman of the Board, the Secretary or the Board of Directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

 

Any or all of the directors may be removed without cause if such removal is approved by a majority of the outstanding voting shares then entitled to vote on the election of directors, except that no director may be removed (unless the entire Board of Directors is removed) when the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.

 

Any reductions in the authorized number of directors does not remove any director prior to the expiration of such director's term in office.

 

  6  
 

 

A vacancy in the Board of Directors shall be deemed to exist (a) if a director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in Sections 303 or 304 of the California General Corporation Law; (b) if the Board of Directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders' meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting. Unless otherwise provided in the articles of incorporation or these by-laws and except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by appointment by the Board. A vacancy on the Board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created by the Board declaring an office of a director vacant because a director has been convicted of a felony or declared of unsound mind by an order of court may be filled by the Board.

 

The shareholders may elect a director at any time to fill a vacancy not filled by the Board of Directors.

 

If the number of directors then in office is less than a quorum, vacancies on the Board of Directors may be filled by the unanimous written consent of the directors then in office, the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section 2.4 hereof or a sole remaining director.

 

Section 2.3. Regular Meetings . Regular meetings of the Board of Directors may be held without notice at such places within or without the State of California and at such times as the Board may from time to time determine.

 

Section 2.4. Special Meetings; Notice of Meetings; Waiver of Notice . Special meetings of the Board of Directors may be held at any time or place within or without the State of California whenever called by the Chairman of the Board, by the Vice Chairman of the Board, if any, or by any two directors. Special meetings shall be held on four days' notice by mail or 48 hours' notice delivered personally or by telephone, telegraph or any other means of communication authorized by Section 307 of the California General Corporation Law. Notice delivered personally or by telephone may be transmitted to a person at the director's office who can reasonably be expected to deliver such notice promptly to the director.

 

Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A notice, or waiver of notice, need not specify the purpose of any regular or special meeting of the Board.

 

  7  
 

 

Section 2.5. Participation in Meetings by Conference Telephone Permitted . Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, through the use of conference telephone or similar communications equipment permitted by Section 307 of the California General Corporation Law, so long as all members participating in such meeting can hear one another, and participation in a meeting pursuant to this Section 2.5 shall constitute presence in person at such meeting.

 

Section 2.6. Quorum; Adjournment; Vote Required for Action . At all meetings of the Board of Directors one-half of the authorized number of directors shall constitute a quorum for the transaction of business. Subject to the provisions of Sections 310 and 317(e) of the California General Corporation Law, every act or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the articles of incorporation or these by-laws shall require a vote of a greater number.

 

A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.

 

Section 2.7. Organization . Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in their absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

Section 2.8. Action by Directors Without a Meeting . Any action required or permitted to be taken by the Board of Directors, or any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as a unanimous vote of such directors.

 

Section 2.9. Compensation of Directors . The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity.

 

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ARTICLE III

 

Executive and Other Committees

 

Section 3.1. Executive and Other Committees of Directors . The Board of Directors, by resolution adopted by a majority of the authorized number of directors, may designate an executive committee and other committees, each consisting of two or more directors, to serve at the pleasure of the Board, and each of which, to the extent provided in the resolution, shall have all the authority of the Board, except that no such committee shall have power or authority with respect to the following matters:

 

(1) The approval of any action for which the California General Corporation Law also requires the approval of the shareholders or of the outstanding shares;

 

(2) The filling of vacancies in the Board or in any committee thereof;

 

(3) The fixing of compensation of the directors for serving on the Board or on any committee thereof;

 

(4) The amendment or repeal of the by-laws, or the adoption of new by-laws;

 

(5) The amendment or repeal of any resolution of the Board which, by its terms, shall not be so amendable or repealable;

 

(6) The making of distributions to shareholders, except at a rate or in a periodic amount or within a price range set forth in the articles or determined by the Board of Directors;

 

(7) The appointment of other committees of the Board or the members thereof;

 

(8) The removal or indemnification of any director; or

 

(9) The changing of the number of authorized directors on the Board.

 

The Board of Directors may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.

 

Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these by-laws.

 

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ARTICLE IV

 

Officers

 

Section 4.1. Officers; Election . As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a President, a Treasurer and a Secretary. The Board may also elect one or more Vice Presidents, one or more Assistant Secretaries, and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person.

 

Section 4.2. Term of Office; Resignation; Removal; Vacancies . Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of shareholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the Chairman of the Board or the Secretary of the corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board at any regular or special meeting.

 

Section 4.3. Powers and Duties . The officers of the corporation shall have such powers and duties in the management of the corporation as shall be stated in these by-laws or in a resolution of the Board of Directors which is not inconsistent with these by-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Secretary shall have the duty to record the proceedings of the meetings of the shareholders, the Board of Directors and any committees in a book to be kept for that purpose. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

 

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ARTICLE V

 

Forms of Certificates; Loss
and Transfer of Shares

 

Section 5.1. Forms of Certificates . Every holder of shares in the corporation shall be entitled to have a certificate signed in the name of the corporation by (1) the President, any Vice President, Chairman of the Board or Vice Chairman, and (2) by the Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, of the corporation, certifying the number of shares and the class or series of shares owned by such shareholder. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

 

If the Corporation is authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences, relative or other special rights, qualifications, restrictions and limitations of each class or series shall be set forth in full or summarized on the face or back of the certificate representing such class or series of stock, provided that in lieu of the foregoing, there may be set forth on the back or face of the certificate a statement that the Corporation will furnish without charge to each stockholder who requests the powers, designations, preferences, relative or other special rights, qualifications, restrictions and limitations of such class or series.

 

Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates . The corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

ARTICLE VI

 

Records and Reports

 

Section 6.1. Shareholder Records . The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

 

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Section 6.2. By-laws . The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the by-laws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the by-laws as amended to date.

 

Section 6.3. Minutes and Accounting Records . The minutes of proceedings of the shareholders, the Board of Directors, and committees of the Board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the Board of Directors. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the corporation.

 

Section 6.4. Inspection by Directors . Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

 

Section 6.5. Annual Report to Shareholders . Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in Section 1501 of the California General Corporation Law is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

 

If at any time and for as long as, the number of shareholders shall exceed 100, the Board of Directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the corporation. This report shall be sent at least 15 days (if third-class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in these by-laws. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that the statements were prepared without audit from the corporation's books and records.

 

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Section 6.6. Financial Statements . The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation's principal office for 12 months; these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

 

Section 6.7. Form of Records . Any records maintained by the corporation in the regular course of its business, with the exception of minutes of the proceedings of the shareholders, and of the Board of Directors and its committees, but including the corporation's stock ledger and books of account, may be kept on, or be in the form of magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

 

ARTICLE VII

 

Miscellaneous

 

Section 7.1. Principal Executive or Business Offices . The Board of Directors shall fix the location of the principal executive office of the corporation at any place either within or without the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the Board shall designate one of these offices as the corporation's principal business office in California.

 

Section 7.2. Fiscal Year . The fiscal year of the corporation shall be determined by the Board of Directors.

 

Section 7.3. Seal . The corporation may have a corporate seal which shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

 

Section 7.4. Interested Directors; Quorum . No contract or transaction between the Corporation and one or more of its directors or between the corporation and any other corporation, firm or association in which one or more of its directors are directors, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or directors are present at the meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the shareholders and such contract or transaction is approved by the shareholders in good faith with the shares owned by the interested director or directors not being entitled to vote thereon; (2) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the Board or the committee, and the Board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it was authorized, approved or ratified; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

 

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Section 7.5. Indemnification . The corporation shall have the power to indemnify, to the maximum extent and in the manner permitted by the California General Corporation Law (the "Code"), each of its directors, officers, employees and agents against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, a "director" or "officer" of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

The corporation shall have the power, to the extent and in the manner permitted by the Code, to indemnify each of its employees and agents (other than directors and officers) against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, an "employee" or "agent" of the corporation includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

Section 7.6. Amendment of By-Laws . To the extent permitted by law these by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors. The shareholders entitled to vote, however, retain the right to adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

 

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Exhibit 5.1

 

The Bingham Law Group, APC

 

 

February 5, 2016

 

RC-1, Inc.

110 Sunrise Center Drive

Thomasville, NC 27360

 

Re:        RC-1, Inc. Form S-1 Registration Statement

 

 

Gentleman:


We refer to the Registration Statement on Form S-1 filed by RC-1, Inc., a Nevada corporation (the “ Company ”), with the United States Securities & Exchange Commission under the Securities Act of 1933, relating to the offer, by the selling shareholders listed therein, of 1,674,477  shares of common stock, $.001 par value per share (the “ Stock ”).

 

As counsel to the Company, we have examined such corporate records, documents and questions of law as deemed necessary or appropriate for the purpose of this opinion, including a review of applicable Federal Law. In such examinations, we have assumed the genuineness of signatures and the conformity to the originals of the documents supplied to us as copies. As to various questions of fact material to this opinion, we have relied upon statements and certificates of officers and representatives of the Company.

 

Upon the basis of this examination, we are of the opinion that under Nevada law, the 2,166,666 shares of Stock offered by the selling shareholders have been validly authorized, are legally issued, fully paid and are non-assessable.

 

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and with such State regulatory agencies in such States as may require such filing in connection with the registration of the Stock for offer and sale in those States, and further consent to statements made in the Registration Statement regarding our firm and use of our name under the heading "Legal Matters" in the Prospectus constituting a part of the Registration Statement.

 

Regards,

 

 

The Bingham Law Group, APC

 

/s/ The Bingham Law Group, APC

The Bingham Law Group, APC

 

 

 

 

The Bingham Law Group, APC Telephone: 760-230-1617
2173 Salk Ave., Suite 250 Facsimile: 760-579-7699
Carlsbad, California 92008  

Exhibit 10.1

 

LINE OF CREDIT PROMISSORY NOTE

 

$600,000 October 1, 2009

 

FOR VALUE RECEIVED, RC-1, Inc., ("Borrower") promises to pay to the order of General Pacific Partners, LLC ("Lender"), a California Limited Liability Company, the principal sum of Six Hundred Thousand Dollars ($600,000), or so much thereof as may be disbursed to, or for the benefit of the Borrower by Lender in Lender's sole and absolute discretion. It is the intent of the Borrower and Lender hereunder to create a line of credit agreement between Borrower and Lender whereby Borrower may borrow up to $300,000 or 50% from Lender; provided, however, that Lender has no obligation to lend Borrower any amounts hereunder and the decision to lend such money lies in the sole and complete discretion of the Lender.

 

INTEREST & PRINCIPAL: The unpaid principal of this line of credit shall bear simple interest at the rate of eight percent (8%) per annum. Interest shall be calculated based on the principal balance as may be adjusted from time to time to reflect additional advances made hereunder. Interest on the unpaid balance of this Note shall accrue monthly but shall not be due and payable until such time as when the principal balance of this Note becomes due and payable. The principal balance of this Note shall be due and payable bi-annually. There shall be no penalty for early repayment of all or any part of the principal.

 

SECURITY: This Note shall be secured by a mortgage ("Mortgage") upon all property owned by the Borrower located in the state of California%

 

DEFAULT: The Borrower shall be in default of this Note on the occurrence of any of the following events: (i) the Borrower shall fail to meet its obligation to make the required principal or interest payments hereunder. (ii) the Borrower shall be dissolved or liquidated; (iii) the Borrower shall make an assignment for the benefit of creditors or shall be unable to, or shall admit in writing their inability to pay their debts as they become due; (iv) the Borrower shall commence any case, proceeding, or other action under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, or any such action shall be commenced against the undersigned; (v) the Borrower shall suffer a receiver to be appointed for it or for any of its property or shall suffer a garnishment, attachment, levy or execution.

 

REMEDIES: Upon default of this Note, Lender may declare the entire amount due and owing hereunder to be immediately due and payable. Lender may also use all remedies in law and in equity to enforce and collect the amount owed under this Note.

 

Borrower hereby waives demand, presentment, notice of dishonor, diligence in collecting, grace and notice of protest.

 

 

Exhibit 10.2

 

Consulting Agreement

 

This agreement is made and will become effective as of January 1st, 2012 by and between the RC-1, Inc., a Nevada corporation (the "Company") and General Pacific Partners, LLC (the "Consultant") to assist the Company in general business management services.

 

The Company agrees to retain the Consultant for a period of three (3) years ("Consulting Term") and then a month to month, to be available and assist the Company as the Company may reasonably request, and the Consultant agrees to provide assistance.

 

Company agrees to provide Consultant access to all business materials to ascertain best practices in the motor racing marketing industry. The Company also agrees to reimburse preapproved business expenses in accordance with the Company's policies and procedures.

 

Either party may terminate this Agreement at any time on 60 days notice. If the Company terminates this Agreement for other than "Cause", the Consultant shall continue to receive the consulting fee. Each party shall be given 10 days to cure any breach.

 

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.

 

 

RC-1, Inc.

 

 

By: /s/ Kevin P. O’Donnell

Kevin P. O’Donnell, CEO

 

By: /s/ Kevin P. O’Donnell

Kevin P. O’Donnell, Managing Member

Exhibit 10.3

 

 

REVOLVING LINE OF CREDIT AGREEMENT

 

This Revolving Line of Credit Agreement (the "AGREEMENT") is made and entered into in this 15 th day of October 2012 by and between TVP Investments, LLC, a Georgia Limited Liability Company ("LENDER") and RC-1, Inc., a Nevada Corporation ("BORROWER").

 

In consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

 

1. LINE OF CREDIT. Lender hereby establishes for a period extending to October 15th, 2014 (the "MATURITY DATE") a revolving line of credit (the (“CREDIT LINE”) for Borrower in the principal amount of Five Hundred Thousand Dollars ($500,000.00) (the "CREDIT LIMIT"). In connection herewith, Borrower shall execute and deliver to Lender a Promissory Note in the amount of the Credit Limit and in form and content satisfactory to Lender. All sums advanced on the Credit Line or pursuant to the terms of this Agreement (each an "ADVANCE") shall become part of the principal of said Promissory Note.

 

2. ADVANCES. Any request for an Advance may be made from time to time and in such amounts as Borrower may choose; provided, however, any requested Advance will not, when added to the outstanding principal balance of all previous Advances, exceed the Credit Limit and further provided, that Lender has no obligation to lend Borrower any amounts hereunder and the decision to lend such money lies in the sole and complete discretion of the Lender.

 

Requests for Advances may be made orally or in writing by such officer of Borrower authorized by it to request such Advances, Until such time as Lender may be notified otherwise. Borrower hereby authorizes its president or any vice president to request Advances. Lender may deposit or credit the amount of any requested Advance to Borrower's checking account with Lender. Lender may refuse to make any requested Advance and the decision to lend such money lies in the sole and complete discretion of the Lender.

 

The funds from the Advances will be used by the Borrower for operating expenses in connection with the operations of the Borrower.

 

3. INTEREST. All sums advanced pursuant to this Agreement shall bear interest from the date each Advance is made until paid in full at the rate of ten percent (10%) per annum, simple interest (the "EFFECTIVE RATE").

 

4. REPAYMENT. Borrower shall pay accrued interest on the outstanding principal balance on a monthly basis commencing 30 days from the date of the advance, and continuing each month thereafter. The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the last business day of each Quarter ended and based on a calendar year ending December 2015.

 

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All payments shall be made to Lender at such place as Lender may, from time to time, designate. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder: second, to accrued interest; and third, to principal. Borrower may prepay principal at any time without penalty.

 

5. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into this Agreement and to make the advances provided for herein, Borrower represents and warrants to Lender as follows:

 

a. Borrower is a duly organized, validly existing, and in good standing under the laws of the State of Nevada with the power to own its assets and to transact business in California, and in such other states where its business is conducted.

 

b. Borrower has the authority and power to execute and deliver any document required hereunder and to perform any condition or obligation imposed under the terms of such documents.

 

c. The execution, delivery and performance of this Agreement and each document incident hereto will not violate any provision of any applicable law, regulation, order, judgment, decree, article of incorporation, by-law, indenture, contract, agreement, or other undertaking to which Borrower is a party, or which purports to be binding on Borrower or its assets and will not result in the creation or imposition of a lien on any of its assets.

 

d. There is no action, suit, investigation, or proceeding pending or, to the knowledge of Borrower, threatened, against or affecting Borrower or any of its assets which, if adversely determined, would have a material adverse affect on the financial condition of Borrower or the operation of its business.

 

6. EVENTS OF DEFAULT. An event of default will occur if any of the following events occurs:

 

a. Failure to pay any principal or interest hereunder within ten (10) days after the same becomes due.

 

b. Any representation or warranty made by Borrower in this Agreement or in connection with any borrowing or request for an Advance hereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made.

 

c. Default by Borrower in the observance or performance of any other covenant or agreement contained in this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 6.

 

d. Filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing.

 

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c. Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

 

7. REMEDIES. Upon the occurrence of an event of default as defined above, Lender may declare the entire unpaid principal balance, together with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind. Lender may suspend or terminate any obligation it may have hereunder to make additional Advances. To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of any kind in connection with this Agreement. No failure or delay on the part of Lender in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity. Borrower agrees to pay all costs of collection incurred by reason of the default, including court costs and reasonable attorney's fees.

 

8. NOTICE. Any written notice will be deemed effective on the date such notice is placed, first class, postage prepaid, in the United States mail, addressed to the party to which notice is being given as follows:

 

Lender: PO Box 386, Kennesaw, GA 30156


Borrower:

 

9. GENERAL PROVISIONS. All representations and warranties made in this Agreement and the Promissory Note and in any certificate delivered pursuant thereto shall survive the execution and delivery of this Agreement and the making of any loans hereunder, this Agreement will be binding upon and inure to the benefit of Borrower and Lender, their respective successors and assigns, except that Borrower may not assign or transfer its rights or delegate its duties hereunder without the prior written consent of Lender. This Agreement, the Promissory Note, and all documents and instruments associated herewith will be governed by and construed and interpreted in accordance with the laws of the State of North Carolina. Time is of the essence hereof. This Agreement will be deemed to express, embody, and supersede any previous understanding, agreements, or commitments, whether written or oral, between the parties with respect to the general subject matter hereof. This Agreement may not be amended or modified except in writing signed by the parties.

 

EXECUTED on the day and year first written above.

 

 

 

 

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Promissory Note

 

$500,00.00 October 20, 2012

 

This Promissory Note (the "NOTE") is made and executed as of the date referred to above, by and between RC-1, Inc., a Nevada corporation (the "BORROWER"), and TVP Investments, LLC ("LENDER"). By this Note, the Borrower promises and agrees to pay to the order of Lender, at such place as Lender may designate in writing, the principal sum of Five Hundred Thousand and 00/100 Dollars ($500.000.00). or the aggregate unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of a Revolving Line of Credit Agreement (the "LOAN AGREEMENT”) of even date herewith, whichever is less, together with interest thereon from the date each advance is made until paid in full, both before and after judgment, at the rate of 10 percent (10%) per annum, simple interest.

 

Borrower shall pay accrued interest on the outstanding principal balance under the Note on a monthly basis commencing 30 days from the date of the advance, and continuing each month thereafter until paid in full. The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on October 20, 2014 (the "MATURITY DATE").

 

Prepayment in whole or part may occur at any time hereunder without penalty; provided that the Lender shall be provided with not less than ten (10) days notice of the Borrower's intent to pre-pay; and provided further that any such partial prepayment shall not operate to postpone or suspend the obligation to make, and shall not have the effect of altering the time for payment of the remaining balance of the Note as provided for above, unless and until the entire obligation is paid in full. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal.

 

An event of default will occur if any of the following events occurs: (a) failure to pay any principal or interest hereunder within ten (10) days after the same becomes due; (b) if any representation or warranty made by Borrower in the Loan Agreement or in connection with any borrowing or request for an advance thereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made; (c) default by Borrower in the observance or performance of any other covenant or agreement contained in the Loan Agreement, other than a default constituting a separate and distinct event of default under Paragraph 7 of the Loan Agreement; (d) filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing; or (e) filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unhanded, or undischarged.

 

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Any notice or demand to be given to the parties hereunder shall be deemed to have been given to and received by them and shall be effective when personally delivered or when deposited in the U.S. mail, certified or registered mail, return receipt requested, postage prepaid, and addressed to the party at his or its last known address, or at such other address as the one of the panics may hereafter designate in writing to the other party.

 

The Borrower hereof waives presentment for payment, protest, demand, notice of protest, notice of dishonor, and notice of nonpayment, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time by the Lender without in any way affecting its liability hereunder.

 

In the event any payment under this Note is not made at the time and in the manner required, the Borrower agrees to pay any and all costs and expenses which may be incurred by the Lender hereof in connection with the enforcement of any of its right:, under this Note or under any such other instrument, including court costs and reasonable attorneys' fees.

 

This Note shall be governed by and construed and enforced in accordance with the laws of North Carolina.

 

 

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Exhibit 10.4

 

Carolina Pro Am Services, Inc.

111 Sunrise Center Dr. (Main Shop)
Thomasville, NC 27360

 

 

January 1, 2014

RC-1, Inc.

4041 MacArthur Blvd. Ste., 175

Newport Beach, Ca. 92660

 

Re: Management Services Agreement

 

Dear Mr. O'Connell,

 

This letter constitutes the agreement by and between Carolina Pro Am Drivers Inc. (hereinafter "CPAD') and RC-1 ("Client"), Inc. with respect to various management services.

 

In consideration of the mutual covenants and premises set forth herein, the parties hereby agree as follows:

 

1. Services

 

a. Basic Service. CPAD will render the following professional services (Basic Services) in support of the Client, as and when reasonably requested by Client from time to time during the term hereof.

 

i. event day management, preparing drivers, crews and administrative people,

 

ii. media preparation, review of public announcements and background information for magazines, newspaper, periodicals, radio and television stations and other media;

 

iii. marketing counseling; and

 

iv. driver client introductions NASCAR, IMSA and other,

 

CPAD agrees to obtain Client's approval on the above-mentioned Basic Services before CPAD provides any entry information to third parties for any scheduled events.

 

b. Special Services. In addition to the Basic Services, CPAD is prepared to provide special services for such projects and products as Client shall from time to time request. Before CPAD begins any special services, Client and CPAD shall agree upon CPAD's compensation for rendering such services. Special Services shall include any service that is not a Basic Services.

 

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2. Compensation

 

Client agrees to pay CPAD certain agreed upon amounts on agreed upon dates in consideration for CPAD's performance of the Basic Services:

 

a. Client shall reimburse CPAD (without mark-up) for all travel related expenses and for the entertainment of editorial and other parties whom CPAD deems necessary to entertain in connection with promoting Client's activities. CPAD will obtain Client's approval on all such expenses of $1,000.00 or more.

 

b. When CPAD uses the services of a third party in providing production-related services to Client, CPAD shall obtain costs and written approval from Client prior to engaging those services. Such costs shall include, but not to be limited to, items such as mechanical and preparation costs, professional production costs (including drivers, over the wall pit crew, host talent, props, hospitality sound and lighting effects, rights, license fees).

 

If, however, Client wishes to arrange for such services directly and to have the billing issued directly from the supplier to Client, Client shall advise CPAD in advance of the rendering of such services.

 

c. All payments should be payable to Carolina Pro Am Drivers, Inc. and remitted to: 111 Sunrise Center Dr. Thomasville, NC 27360.

 

3. Billing Procedures

 

The fees invoiced for Basic Services shall be due and payable upon receipt of the invoice. With respect to all other payments of such fee, CPAD will send Client an invoice on or about the date of the event, for the Basic Services and the out-of-pocket expenses referred to in Sections 2 above. With your signature below you are jointly and severally responsible for our fees and charges. Your signature represents that you have full authority to execute this Agreement on behalf of the entity referenced herewith. If we do not receive payment by the end of the billing month, you agree to pay a charge of eighteen percent (18%) interest per month on the unpaid balance. If payment is not made by the end of the following month we reserve the right to charge both the eighteen percent (18%) interest per month and pursue all legal remedies available.

 

4. Term

 

The term of this Agreement shall commence as of January 1, 2014 and expire on December 31, 2017. At the end of the term, this agreement shall continue on a month-to-month basis until cancelled or renegotiated by either party via a 30-day written notice.

 

5. Indemnification

 

a. Client Responsibility

 

Client acknowledges that CPAD cannot independently verify factual material supplied to CPAD by Client, and therefore Client hereby agrees to indemnify and hold CPAD harmless from and against any and all claims, losses, damages, liabilities, actions, causes of action, expenses (including reasonable attorneys' fees) and any other legal liability which CPAD incurs arising out of information or material supplied by Client and contained in any reports, press releases or other material distributed by CPAD pursuant to this Agreement or otherwise at the direction of Client.

 

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b. Use of Information by Third Party

 

The parties agree that CPAD has no control over information once it has been issued to the media or any other third party. The parties further agree that CPAD cannot assure the use of any material by any medium, or the accuracy of what any third party broadcasts, publishes or promotes.

 

6. Entire Agreement

 

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and may only be modified or amended by a writing signed by both parties. Any prior or contemporaneous agreements, promises, negotiations or representations not expressly set forth in this Agreement are of no force or effect. This Agreement supersedes any and all existing contracts and agreements by the parties with respect to the subject matter covered herein.

 

7. Agency/Client

 

The parties agree that when purchasing materials or services on Client's behalf, CPAD will be acting as Client's agent, and all orders placed and contracts entered into by CPAD for such purposes with suppliers and other persons may so state.

 

8. Titles

 

Titles are for reference purposes only. In the event of a conflict between a title and the content of a section, the content of the section shall control.

 

9. Assignment

 

This final Agreement shall be governed and constructed with the laws of the state of California without giving effect to conflicts-of-law principals thereof. This Agreement may not be assigned to another party, by operation of law or otherwise.

 

10. Arbitration

 

The parties hereto agree that any dispute, controversy or claim arising out of, relating to, or in connection with this Agreement (including, without limitation, any claim regarding or related to the interpretation, scope, effect, enforcement, termination, extension, breach, legality, remedies and other aspects of this Agreement or the conduct and communications of the parties regarding this Agreement and the subject matter of this Agreement) shall be settled by arbitration at the offices of Judicial Arbitration and Mediation Services, Inc. or successor organization for binding arbitration in Los Angeles, California by a single arbitrator. The arbitrator may grant injunctions or other relief in such dispute or controversy. All awards of the arbitrator shall be binding and non-appealable. Judgment upon the award of the arbitrator may be entered in any court having jurisdiction. The arbitrator shall apply California law to the merits of any dispute or claims, without reference to the rules of conflicts of law applicable therein. Suits to compel or enjoin arbitration or to determine the applicability or legality of arbitration shall be brought in the United States District Court for the Central District of California, or if that court lacks jurisdiction, in a state court located within the geographic boundaries thereof. Notwithstanding the foregoing, no party to this Agreement shall be precluded from applying to a proper court for injunctive relief by reason of the prior or subsequent commencement of an arbitration proceeding as herein provided.

 

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Further, by agreeing to arbitrate, the prevailing parties are entitled to reimbursement of all attorney's fees and costs.

 

CPAD and Client each hereby acknowledge their acceptance and approval of the foregoing by executing this Agreement in the space set forth below.

 

 

Thank You,

 

 

Carolina Pro Am Drivers Inc.  
   
By: /s/ Richard S. Ware Date: January 1, 2014
Richard S. Ware  
   
AGREED TO AND ACCEPTED BY:  
   
By: /s/ Kevin P. O’Connell Date: 1/1/14
Kevin P. O’Connell  
President  

 

Exhibit 10.5

 

REVOLVING LINE OF CREDIT AGREEMENT

 

This Revolving Line of Credit Agreement (the "AGREEMENT") is made and entered into in this 1st day of August 2013 by and between DEVCAP Partners, LLC, a Texas Limited Liability Company ("LENDER") and RC-1, Inc., a Nevada Corporation ("BORROWER").

 

In consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

 

1. LINE OF CREDIT. Lender hereby establishes for a period extending to August 1st, 2020 (the "MATURITY DATE") a revolving line of credit (the "CREDIT LINE") for Borrower in the principal amount of Three Hundred Thousand Dollars ($300,000.00) (the "CREDIT LIMIT"). In connection herewith, Borrower shall execute and deliver to Lender a Promissory Note in the amount of the Credit Limit and in form and content satisfactory to Lender. All sums advanced on the Credit Line or pursuant to the terms of this Agreement (each an "ADVANCE") shall become part of the principal of said Promissory Note.

 

2. ADVANCES. Any request for an Advance may be made from time to time and in such amounts as Borrower may choose; provided, however, any requested Advance will not, when added to the outstanding principal balance of all previous Advances, exceed the Credit Limit and further provided, that Lender has no obligation to lend Borrower any amounts hereunder and the decision to lend such money lies in the sole and complete discretion of the Lender.

 

Requests for Advances may be made orally or in writing by such officer of Borrower authorized by it to request such Advances. Until such time as Lender may be notified otherwise, Borrower hereby authorizes its president or any vice president to request Advances. Lender may deposit or credit the amount of any requested Advance to Borrower's checking account with Lender. Lender may refuse to make any requested Advance and the decision to lend such money lies in the sole and complete discretion of the Lender.

 

The funds from the Advances will be used by the Borrower for operating expenses in connection with the operations of the Borrower.

 

3. INTEREST. All sums advanced pursuant to this Agreement shall bear interest from the date each Advance is made until paid in full at the rate of ten percent (10%) per annum, simple interest (the "EFFECTIVE RATE").

 

4. REPAYMENT. Borrower shall pay accrued interest on the outstanding principal balance on a monthly basis commencing 30 days from the date of the advance, and continuing each month thereafter. The `entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the last business day of each Quarter ended and based on a calendar year ending December 31, 2014.

 

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All payments shall be made to Lender at such place as Lender may, from time to time, designate. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal. Borrower may prepay principal at any time without penalty.

 

5. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into this Agreement and to make the advances provided for herein, Borrower represents and warrants to Lender as follows:

 

a. Borrower is a duly organized, validly existing, and in good standing under the laws of the State of Nevada with the power to own its assets and to transact business in California, and in such other states where its business is conducted.

 

b. Borrower has the authority and power to execute and deliver any document required hereunder and to perform any condition or obligation imposed under the terms of such documents.

 

c. The execution, delivery and performance of this Agreement and each document incident hereto will not violate any provision of any applicable law, regulation, order, judgment, decree, article of incorporation, by-law, indenture, contract, agreement, or other undertaking to which Borrower is a party, or which purports to be binding on Borrower or its assets and will not result in the creation or imposition of a lien on any of its assets.

 

d. There is no action, suit, investigation, or proceeding pending or, to the knowledge of Borrower, threatened, against or affecting Borrower or any of its assets which, if adversely determined, would have a material adverse affect on the financial condition of Borrower or the operation of its business.

 

6. EVENTS OF DEFAULT. An event of default will occur if any of the following events occurs:

 

a. Failure to pay any principal or interest hereunder within ten (10) days after the same becomes due.

 

b. Any representation or warranty made by Borrower in this Agreement or in connection with any borrowing or request for an Advance hereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made.

 

c. Default by Borrower in the observance or performance of any other covenant or agreement contained in this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 6.

 

d. Filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing.

 

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e. Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

 

7. REMEDIES. Upon the occurrence of an event of default as defined above, Lender may declare the entire unpaid principal balance, together with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind. Lender may suspend or terminate any obligation it may have hereunder to make additional Advances. To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of any kind in connection with this Agreement. No failure or delay on the part of Lender in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity. Borrower agrees to pay all costs of collection incurred by reason of the default, including court costs and reasonable attorney's fees.

 

8. NOTICE. Any written notice will be deemed effective on the date such notice is placed, first class, postage prepaid, in the United States mail, addressed to the party to which notice is being given as follows:

 

Lender: P.O. Box 12589 Newport Beach, CA 92658

 

Borrower: 111 Sunrise Center Dr., Thomasville, NC 27360

 

9. GENERAL PROVISIONS. All representations and warranties made in this Agreement and the Promissory Note and in any certificate delivered pursuant thereto shall survive the execution and delivery of this Agreement and the making of any loans hereunder. This Agreement will be binding upon and inure to the benefit of Borrower and Lender, their respective successors and assigns, except that Borrower may not assign or transfer its rights or delegate its duties hereunder without the prior written consent of Lender. This Agreement, the Promissory Note, and all documents and instruments associated herewith will be governed by and construed and interpreted in accordance with the laws of the State of North Carolina. Time is of the essence hereof. This Agreement will be deemed to express, embody, and supersede any previous understanding, agreements, or commitments, whether written or oral, between the parties with respect to the general subject matter hereof. This Agreement may not be amended or modified except in writing signed by the parties.

 

EXECUTED on the day and year first written above.

 

 

 

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Promissory Note

 

$300,000.00 August 1st, 2013

 

This Promissory Note (the "NOTE") is made and executed as of the date referred to above, by and between RC-1, Inc., a Nevada corporation (the "BORROWER"), and DEVCAP Partners, LLC ("LENDER"). By this Note, the Borrower promises and agrees to pay to the order of Lender, at such place as Lender may designate in writing, the principal sum of Three Hundred Thousand and 00/100 Dollars ($300,000.00), or the aggregate unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of a Revolving Line of Credit Agreement (the "LOAN AGREEMENT") of even date herewith, whichever is less, together with interest thereon from the date each advance is made until paid in full, both before and after judgment, at the rate of 10 percent (10%) per annum, simple interest.

 

Borrower shall pay accrued interest on the outstanding principal balance under the Note on a monthly basis commencing 30 days from the date of the advance, and continuing each month thereafter until paid in full. The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on October 20, 2014 (the "MATURITY DATE").

 

Prepayment in whole or part may occur at any time hereunder without penalty; provided that the Lender shall be provided with not less than ten (10) days notice of the Borrower's intent to pre-pay; and provided further that any such partial prepayment shall not operate to postpone or suspend the obligation to make, and shall not have the effect of altering the time for payment of the remaining balance of the Note as provided for above, unless and until the entire obligation is paid in full. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal.

 

An event of default will occur if any of the following events occurs: (a) failure to pay any principal or interest hereunder within ten (10) days after the same becomes due; (b) if any representation or warranty made by Borrower in the Loan Agreement or in connection with any borrowing or request for an advance thereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made; (c) default by Borrower in the observance or performance of any other covenant or agreement contained in the Loan Agreement, other than a default constituting a separate and distinct event of default under Paragraph 7 of the Loan Agreement; (d) filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing; or (e) filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

 

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Any notice or demand to be given to the parties hereunder shall be deemed to have been given to and received by them and shall be effective when personally delivered or when deposited in the U.S. mail, certified or registered mail, return receipt requested, postage prepaid, and addressed to the party at his or its last known address, or at such other address as the one of the parties may hereafter designate in writing to the other party.

 

The Borrower hereof waives presentment for payment, protest, demand, notice of protest, notice of dishonor, and notice of nonpayment, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time by the Lender without in any way affecting its liability hereunder.

 

In the event any payment under this Note is not made at the time and in the manner required, the Borrower agrees to pay any and all costs and expenses which may be incurred by the Lender hereof in connection with the enforcement of any of its rights under this Note or under any such other instrument, including court costs and reasonable attorneys' fees.

 

This Note shall be governed by and construed and enforced in accordance with the laws of Nevada.

 

 

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Exhibit 23.2

 

 

 

To Whom It May Concern:

 

We hereby consent to the inclusion of our Report of Independent Registered Public Accounting Firm dated April 27, 2016 in Registration Statement on Form S-1 dated April 27, 2016 on the balance sheets of RC-1, Inc. for the years ended December 31, 2015 and 2014 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended December 31, 2015 and 2014.

 

In addition, we consent to the reference to me under the heading "Experts" in the Registration Statement.

/s/ Pritchett, Siler & Hardy, P.C

 

Pritchett, Siler & Hardy, P.C

Salt Lake City, Utah 84111

April 27, 2016