0001561622
2016-01-01
2016-06-30
0001561622
2016-06-30
0001561622
2015-12-31
0001561622
2015-01-01
2015-06-30
0001561622
us-gaap:ParentMember
2014-07-01
0001561622
us-gaap:ConvertibleNotesPayableMember
2016-01-01
2016-06-30
0001561622
us-gaap:ConvertibleNotesPayableMember
2015-12-31
0001561622
tsgl:TwoinvestorMember
tsgl:StockpurchaseagreementMember
2015-04-29
0001561622
tsgl:InvestoroneMember
2015-12-31
0001561622
tsgl:StockpurchaseagreementMember
tsgl:TwoinvestorMember
2015-12-31
0001561622
tsgl:ConsultantMember
tsgl:ConsultingagreementMember
2015-12-31
0001561622
tsgl:InvestoroneMember
2016-01-01
2016-06-30
0001561622
tsgl:TwoinvestorMember
tsgl:StockpurchaseagreementMember
2016-01-01
2016-06-30
0001561622
tsgl:ConsultantMember
tsgl:ConsultingagreementMember
2016-01-01
2016-06-30
0001561622
2016-08-15
0001561622
us-gaap:CommonStockMember
2016-01-01
2016-06-30
0001561622
us-gaap:AdditionalPaidInCapitalMember
2016-01-01
2016-06-30
0001561622
us-gaap:SeriesAPreferredStockMember
2015-12-31
0001561622
us-gaap:SeriesAPreferredStockMember
2016-06-30
0001561622
us-gaap:SeriesBPreferredStockMember
2015-12-31
0001561622
us-gaap:SeriesBPreferredStockMember
2016-06-30
0001561622
2014-12-31
0001561622
2015-06-30
0001561622
us-gaap:SegmentDiscontinuedOperationsMember
2016-01-01
2016-06-30
0001561622
2016-04-01
2016-06-30
0001561622
2015-04-01
2015-06-30
0001561622
2016-03-31
0001561622
tsgl:LaborSmartIncMember
2016-04-02
0001561622
tsgl:LaborSmartIncMember
2016-03-30
2016-04-02
0001561622
us-gaap:PredecessorMember
us-gaap:SeriesAPreferredStockMember
2015-12-31
0001561622
us-gaap:PredecessorMember
2015-12-31
0001561622
us-gaap:PredecessorMember
us-gaap:SeriesBPreferredStockMember
2015-12-31
0001561622
us-gaap:PredecessorMember
2015-01-01
2015-06-30
0001561622
us-gaap:PredecessorMember
2016-04-01
2016-06-30
0001561622
us-gaap:PredecessorMember
2015-04-01
2015-06-30
0001561622
us-gaap:PredecessorMember
2014-12-31
0001561622
us-gaap:PredecessorMember
2015-06-30
0001561622
us-gaap:PredecessorMember
2016-03-31
0001561622
us-gaap:PredecessorMember
2016-06-30
0001561622
tsgl:LaborSmartIncMember
us-gaap:ProFormaMember
2016-01-01
2016-06-30
0001561622
tsgl:LaborSmartIncMember
us-gaap:ProFormaMember
2015-01-01
2015-03-31
0001561622
tsgl:LaborSmartIncMember
us-gaap:ProFormaMember
2015-01-01
2015-06-30
0001561622
us-gaap:SegmentDiscontinuedOperationsMember
2016-04-01
2016-06-30
0001561622
us-gaap:MinimumMember
2016-01-01
2016-06-30
0001561622
us-gaap:MaximumMember
2016-01-01
2016-06-30
xbrli:shares
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:pure
10-Q
false
2016-06-30
2016
Q2
Staffing Group, Ltd.
0001561622
--12-31
No
Yes
No
Smaller Reporting Company
84133
5605
815159
463843
3422523
0
468806
2817837
346039
705331
3351152
346039
705331
1262
602
1080000
3623289
2434749
-3565620
-2781390
-236525
58931
-346039
-236525
3422523
0
468806
150000000
150000000
150000000
1262436
602421
0
0.001
0.001
0.001
0.15
0.15
0.30
0.50
0.001
-785791
-120255
-701519
-40473
-11654
-125471
-1110698
-40473
-120255
80000
293334
5867
0.225
600000
40000
80000
150000
90000
60000
1000000
26668
5000000
5000000
5
5
60
60
5
5000000
60
1262436
602421
26668
200000
600000
0
109200
379452
60000
6000
0
500000
500000
27
2700
1
1
0
0
1
0
1
1
0
0
1
0
31428
27006
407963
150940
1219029
308096
16992
499211
343535
208240
634091
610280
150940
492127
16992
696209
461158
322897
-105299
-150940
143051
7584
-16992
50757
-113982
69358
-219281
14575
-7889
31567
-1335886
-5350
-1285153
-2675
-62411
-11489
-27404
-680492
-11554
-100812
-709101
-8879
-62411
-11489
-27404
-46169
-785791
-162494
-701517
-25871
-11654
-125471
41954
-0.85
-0.22
-0.57
-0.03
-1.21
-0.05
-0.16
5605
-120548
-933
640235
9450
268101
129895
14479
9743
441135
-5663
1151018
-367239
-441135
5663
84133
49130
-1081364
357496
28500
0
0
0
TSGL
1202436
107000
107000
63981
4265
376176
178959
99617
655394
576052
-785791
-162494
-701517
-25871
-11654
-125471
41954
42239
42239
-14602
-14602
-0.85
-0.22
-0.57
-0.03
0
0
0
0
-655395
-367239
357496
42239
-14602
11266
57143
1.05
0.0064
0.00
0
28500
71371
-346039
-236525
12440
12438
97565
55815
90500
7547
654131
456296
-785791
-120255
-701517
-40473
-11654
-125471
41954
920898
744400
1239359
744400
-1560
2
142317
124031
196998
117623
114657
504981
1362080
499711
746966
347176
392255
665658
1113510
6077807
1096975
2230999
992493
1101863
2772761
1618491
7439887
1596686
2977965
1339669
1494118
3438419
14000
41750
90500
-654131
119358
-22569
62411
11489
42705
61459
168608
533315
750000
238051
1466000
1466000
1140000
1364
4963
71290
3762
467280
636472
6204
6204
60000
60000
1080000
506000
750000
1080000
890890
1364
-71290
1245006
-58299
-220105
1230710
122192
-382836
225768
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
1 - Description of Business</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On December 22, 2015, the Company
entered into a Licensing Agreement with Labor Smart, Inc., a stockholder of the Company, whereby Labor Smart, Inc. has granted
the Company an exclusive license to use their trademarked name in connection with general advertising materials, point of sale
displays and other promotional materials. As consideration for the use of the trademarked name, the Company agreed to pay to Labor
Smart, Inc. a one-time fee of $5,000 for each newly opened branch location that is opened under the name of Labor Smart, Inc.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On December 28, 2015, the Company
incorporated a subsidiary, Staff Fund I, LLC, a Nevada Limited Liability Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On December 31, 2015, the Company
entered into a Stock Purchase Agreement (“SPA”) with Pour Les Enfant, LLC, a Louisiana limited liability company (“Pour
Les Enfant”). Pursuant to the SPA, the Company, as sole shareholder of EmployUS, Ltd. completed the split-off by transferring
to Pour Les Enfant all outstanding shares and tangible assets of EmployUS, Ltd. (the “split-off transaction”). In consideration
thereof, Pour Les Enfant assumed all liabilities of EmployUS, Ltd. associated with monies owed to the Internal Revenue Service
for late payroll taxes; and all corporate, personal, and validity guarantees associated the Crestmark Bank Loan and Security Agreement.
Pursuant to the SPA, Brent Callais and Brian McLoone, directors, executives and controlling shareholders of the Company, each agreed
to transfer to the Company 91,000 shares of the Company’s common stock and one share of the Company’s preferred stock,
for immediate cancellation. As a result of the cancellation of the two (2) preferred shares by Brent Callais and Brian McLoone,
there was a change in control of the Company as Labor Smart, Inc. holds the one (1) remaining outstanding preferred share of the
Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The financial results of EmployUS,
Ltd. qualifies for reporting as a discontinued operations. A substantial portion of the Company’s 2015 financial statements
have been reclassified to conform to the reporting of discontinued operations adopted in 2015. See Note 5.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">In January 2016, the Company
commenced operations of one (1) staffing location Montgomery, Alabama through the subsidiary, Staff Fund I, LLC. This subsidiary
operates under a licensing agreement with Labor Smart, Inc. Staff Fund I, LLC recruits, hires, employs and manages skilled and
unskilled workers that it places with its client companies. During the six months ended June 30, 2016. Staff Fund I, LLC issued
membership interests for cash proceeds of $14,000. At June 30, 2016, 7% of Staff Fund I, LLC’s membership interest are held
by non-controlling interest.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 1, 2016, the Company
purchased the operating assets of four (4) branch locations in Charlotte, NC, Indianapolis, IN, Nashville, TN and Raleigh, NC from
Labor Smart, Inc. for consideration with a fair value of $2,666,000. The one-time fee of $5,000 for the (4) newly opened branches
which were opened under the Labor Smart, Inc. name totaling $20,000 was waived. As a requirement of the purchase of the operating
assets, the one (1) issued and outstanding share of Series A Preferred Stock owed by Labor Smart, Inc. was transferred to Kimberly
Thompson, the Chief Executive Officer of the Company in addition the CEO stepped down from any former position she held with Labor Smart, Inc. Each share of Series A Preferred Stock gives the holder voting rights equal
to 2 votes for every one share of common stock outstanding at the time of a vote of shareholders and does not have any additional
rights or preferences. As such, at June 30, 2016, Kimberly Thompson controlled the majority of shareholder votes. (See Note 3).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 2 - Summary
of Significant Accounting Policies </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Basis
of presentation</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The accompanying unaudited
condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to
Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete
consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results
that may be expected for any subsequent quarter or for the year ending December 31, 2016. The unaudited condensed consolidated
financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in
the Company’s Annual Report on Form 10-K filed on April 13, 2016 for the year ended December 31, 2015.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>principles
of consolidation</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The condensed consolidated
financial statements include the accounts of the Company’s one operating subsidiary.  All significant inter-company
transactions and balances are eliminated in consolidation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Use
of Estimates</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The preparation of condensed
consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues
and expenses during the period. Actual results could differ from those estimates. Significant matters requiring the use of estimates
and assumptions include, but may not be limited to, accounts receivable allowances, goodwill, intangible assets, valuation allowance
for deferred tax assets and valuation of derivative liabilities. Management believes that its estimates and assumptions are reasonable,
based on information that is available at the time they are made.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Revenue
Recognition</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Contract staffing service revenues
are recognized when services are rendered. The Company recognizes revenue in accordance with Accounting Standards Codification
(“ASC”) 605 “Revenue Recognition”, which requires that four basic criteria be met before revenue can be
recognized: (i) persuasive evidence that an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is
reasonably assured; and (iv) services have been rendered.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Cash
and Cash Equivalents</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company considers highly
liquid investments with original maturities of three months or less when purchased as cash equivalents. At times throughout the
year, the Company might maintain bank balances that may exceed Federal Deposit Insurance Corporation (FDIC) insured limits. Periodically,
the Company evaluates the credit worthiness of the financial institutions, and has not experienced any losses in such accounts.
As of June 30, 2016 and December 31, 2015, the Company did not have any cash equivalents.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Cash
- Restricted</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Restricted cash represents
cash in a lockbox account by held by TCA Global Credit Master Fund, LP in according with the Senior Secured Revolving Credit Facility
Agreement. The Company considered $71,290, as restricted cash at June 30, 2016. No cash was considered restricted at December 31,
2015. (See Note 8)</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><i> </i></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Accounts
Receivable</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company extends credit
to its customers based on an evaluation of the customer’s financial condition and ability to pay the Company in accordance
with the payment terms. An allowance for doubtful accounts is recorded as a charge to bad debt expense where collection is considered
doubtful due to credit issues. This allowance reflects management’s estimate of the potential losses inherent in the accounts
receivable balance, based on historical loss statistics and known factors impacting its customers. The nature of the contract service
business, where companies are dependent on employees for their production cycle, generally results in a nominal provision for doubtful
accounts. Based on management’s review of accounts receivable, an allowance for doubtful accounts was not material for any
of the periods presented. The Company charges uncollectible accounts against the allowance once the invoices are deemed unlikely
to be collectible. The Company does not accrue interest on past due receivables.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Net
(Loss) Income per Common Share</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Net (loss) income per common
share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net (loss) income
per common share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding
during the period.  Diluted net (loss) income per common share is computed by dividing net (loss) income by the weighted
average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect
the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.
At June 30, 2016 and December 31, 2015, the Company excluded 1,845,151 and 151,963 common stock issuable upon conversion of convertible
notes payable and Series B Stock, respectively, as their effect would have been anti-dilutive.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Identifiable
Intangible Assets</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Identifiable intangible assets
consist primarily of customer relationships and non-compete contracts. These assets are tested for impairment using discounted
cash flow methodology annually and whenever there is an impairment indicator. Estimating future cash flows requires significant
judgment and projections may vary from cash flows eventually realized. Several impairment indicators are beyond the Company’s
control, and determining whether or not they will occur cannot be predicted with any certainty. Customer relationships and non-compete
contracts are amortized on a straight-line basis over an estimated life of five years.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Goodwill</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Goodwill represents the premium
paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations.
The Company performs a goodwill impairment test on at least an annual basis at the reporting unit level. Application of the goodwill
impairment test requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts,
estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination
of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of
fair value and/or conclusions on goodwill impairment for each reporting unit. The Company will conduct its annual goodwill impairment
test as of December 31 of each year or more frequently if indicators of impairment exist. The Company periodically analyzes whether
any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment
has occurred. Such indicators may include a sustained significant decline in our stock price and market capitalization, a significant
adverse change in legal factors or in the business climate, unanticipated competition and/or slower expected growth rates, adverse
actions or assessments by a regulator, among others. The Company compares the fair value of its reporting unit to its respective
carrying value, including related goodwill. Future changes in the industry could impact the results of future annual impairment
tests. There can be no assurance that future tests of goodwill impairment will not result in impairment charges.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Fair
Value Measurement</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">As required by the Fair Value
Measurements and Disclosures Topic of the FASB ASC (“ASC 820-10”), fair value is measured based on a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted
prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly
or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity
to develop its own assumptions.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The three levels of the fair
value hierarchy are described below:</p>
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="width: 1%; padding-left: 18pt; line-height: 107%"> </td>
<td style="vertical-align: top; width: 10%; padding-left: 18pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 1</font></td>
<td style="vertical-align: top; width: 89%; padding-left: 18pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; </font></td></tr>
<tr>
<td style="padding-left: 18pt; line-height: 107%"> </td>
<td style="vertical-align: top; padding-left: 18pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 2</font></td>
<td style="vertical-align: top; padding-left: 18pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; </font></td></tr>
<tr>
<td style="padding-left: 18pt; line-height: 107%"> </td>
<td style="vertical-align: top; padding-left: 18pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 3</font></td>
<td style="vertical-align: top; padding-left: 18pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Convertible promissory notes
payable and convertible promissory note derivative liability – related party is measured at fair value on a recurring basis
using Level 3 inputs.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The carrying amounts reported
in the Company’s condensed consolidated financial statements for accounts receivable, prepaid expenses, accounts payable
and accrued expenses approximate their fair value because of the immediate or short-term nature of these consolidated financial
instruments. The carrying amounts reported in the condensed consolidated balance sheets for its line of credit and convertible
notes payable approximates fair value as the contractual interest rate and features are consistent with similar instruments of
similar risk in the market place.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"><font style="font-variant: small-caps"><b>Convertible
Promissory Notes</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"><font style="font-variant: small-caps"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 30px"> </td>
<td style="vertical-align: bottom; width: 48px; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">i)  </font></td>
<td style="vertical-align: top; text-decoration: underline; line-height: 107%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Beneficial Conversion Feature</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">If the conversion features
of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as
a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic
470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded
net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using
the effective interest method.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 60px"> </td>
<td style="width: 18px; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">ii)</font></td>
<td style="text-decoration: underline; line-height: 107%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Debt Discount</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company determines if
the convertible debenture should be accounted for as liability or equity under ASC 480, Liabilities — Distinguishing Liabilities
from Equity. ASC 480, applies to certain contracts involving a Company's own equity, and requires that issuers classify the following
freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, obligations that require or may
require repurchase of the issuer's equity shares by transferring assets (e.g., written put options and forward purchase contracts),
and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">– A fixed monetary
amount known at inception, for example, a payable settleable with a variable number of the issuer's equity shares with an issuance
date fair value equal to a fixed dollar amount,</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">– Variations in something
other than the fair value of the issuer's equity shares, for example, a financial instrument indexed to the S&P 500 and settleable
with a variable number of the issuer's equity shares, or</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">– Variations inversely
related to changes in the fair value of the issuer's equity shares, for example, a written put that could be net share settled.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">If the entity determined
the instrument meets the guidance under ASC 480 the instrument is accounted for as a liability with a respective debt discount.
The Company records debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized
to non-cash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of
the unamortized amounts is immediately expensed.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 60px"> </td>
<td style="width: 18px; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">iii)</font></td>
<td style="text-decoration: underline; line-height: 107%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Derivative Financial Instruments</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Derivative financial instruments,
as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial
instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or
other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing
or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured
at fair value and recorded as liabilities or, in rare instances, assets.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company does not use
derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued
financial instruments including senior convertible promissory notes payable and freestanding stock purchase warrants with features
that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or
(iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required
to be carried as derivative liabilities, at fair value, in our consolidated financial statements.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Recent
Accounting Pronouncements </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">In April 2015, the FASB issued
a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard,
an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset.
Amortization of the costs is reported as interest expense. The accounting standard is effective for annual reporting periods beginning
after December 15, 2015 and was adopted in the first quarter of 2016.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">In March 2016, the FASB issued
a new accounting standard which is intended to simplify the accounting for share-based compensation. This standard simplifies the
accounting for income taxes in relation to share-based compensation, modifies the accounting for forfeitures, and modifies the
statutory tax withholding requirements. This standard will be effective for fiscal years beginning after December 15, 2016, including
interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the new accounting standard
will have on its consolidated financial position, results of operations or cash flows.</p>
<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 3 –
business acquisition</b></font></p>
<p style="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 1, 2016, the Company
entered into an Agreement for Purchase and Sale of Assets (the “Agreement”) with Labor Smart, Inc. (the “Seller”),
related party and shareholder of the Company. Pursuant to the Agreement, the Company purchased from the Seller the operating assets
of four (4) branch locations, which includes customer lists, title to certain leases for real or personal property, contracts,
fixed assets, and business records (collectively the “Four Branches”). The Seller retained all open accounts receivable
related to the prior operations of the branch locations and was responsible for all operating liabilities. In consideration for
the Four Branches, the Company paid the Seller total consideration with a fair value of $2,666,000, paid as follows: (i) $890,890
in cash, (ii) 600,000 shares of the Company’s common stock at a fair value of $1,080,000 ($1.80 per share based on the closing
price of the Company common stock on March 31, 2016), (iii) a non-interest bearing promissory note due on April 1, 2018 with a
face amount of $755,000 and a fair value of $506,000. The Company assumed no liabilities in the business acquisition. In accordance
with FASB ASC 835-30 "Imputation of Interest", interest has been imputed on the promissory note at an annual market interest
rate of 22% per annum. (iv) payoff of certain of the Seller’s outstanding debt totaling $29,110, and (v) direct payment to
the IRS on behalf of the Seller in the amount of $160,000 (the “Purchase Price”).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify; background-color: white">On
April 1, 2016, as a requirement of the purchase of the operating assets, the one (1) issued and outstanding share of Series A Preferred
Stock owed by Labor Smart, Inc. was transferred to Kimberly Thompson, the Chief Executive Officer of the Company. Each share of
Series A Preferred Stock gives the holder voting rights equal to 2 votes for every one share of common stock outstanding at the
time of a vote of shareholders and does not have any additional rights or preferences. As such, at June 30, 2016, Kimberly Thompson
controlled the majority of shareholder votes.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Assets acquired and liabilities assumed
in the Agreement were recorded on the Company’s Consolidated Balance Sheet as of the acquisition date of April 1, 2016 based
upon their estimated fair values. The results of operations of businesses acquired by the Company have been included in the statements
of operations since the date of acquisition. The excess of the purchase price over the estimated fair values of the underlying
identifiable assets acquired and liabilities assumed were allocated to goodwill.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The preliminary allocation
of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Customer Relationships</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,130,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Non-complete Agreements</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">70,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Goodwill</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,466,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Purchase Price</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,666,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Unaudited pro forma results
of operations information for the three and six months ended June 30, 2015 as if the Company and the entities described above had
been combined on January 1, 2015 are as follows. The pro forma results include estimates and assumptions which management believes
are reasonable. The pro forma results do not include any anticipated cost savings or other effects of the planned integration of
these entities, and are not necessarily indicative of the results that would have occurred if the business combinations had been
in effect on the dates indicated, or which may result in the future.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six Months Ended June 30, 2016</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font><br /> <font style="font: 10pt Times New Roman, Times, Serif"><b>June 30, 2015</b></font></td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six Months Ended June 30, 2015</td></tr>
<tr style="vertical-align: bottom">
<td style="width: 46%; text-align: left">Net revenues</td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">2,958,160</td><td style="width: 1%; text-align: left"> </td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">3,438,419</td><td style="width: 1%; text-align: left"> </td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">7,439,887</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Income (loss) from operations</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(219,281</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,575</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(7,889</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Net loss</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(1,110,698</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(40,473</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(120,255</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td>Net loss per share</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(1.21</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.05</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(0.16</td><td style="text-align: left">)</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Revenue and costs are generally
allocated using specific identification and include corporate administrative expenses, finance, legal, tax, treasury and other
general corporate services.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The carve-out financial information
include revenue and expenses of Labor Smart, Inc., allocated to the Four<br />
Branches (“Predecessor”) for certain functions provided by Labor Smart, including compensation and benefits, occupancy,
information technology costs, finance and interest costs, legal, tax, treasury and other general corporate services. These expenses
have been allocated to the results of the Four Branches based on one of four allocation cost drivers:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20px; padding-bottom: 6pt; text-align: right; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">1)</font></td>
<td style="width: 7px"> </td>
<td style="padding-bottom: 6pt; text-align: justify; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">Revenues attributable to the Four Branches,</font></td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20px; padding-bottom: 6pt; text-align: right; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">2)</font></td>
<td style="width: 7px"> </td>
<td style="padding-bottom: 6pt; text-align: justify; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">The headcount of employees within the Four Branches and Labor Smart</font></td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20px; padding-bottom: 6pt; text-align: right; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">3)</font></td>
<td style="width: 7px"> </td>
<td style="padding-bottom: 6pt; text-align: justify; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">The identification of costs specific to the Four Branches; and</font></td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20px; padding-bottom: 6pt; text-align: right; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">4)</font></td>
<td style="width: 7px"> </td>
<td style="padding-bottom: 6pt; text-align: justify; line-height: 107%; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif">Allocation of finance and interest costs based on proceeds from the sales of the Four Branches by Labor Smart.</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Management considers the
basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the
benefit received by, the Four Branches, The allocations may not; however, reflect the expenses the Four Branches would have incurred
as an independent entity for the periods presented.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Unaudited predecessor financial
information has been provided in these condensed consolidated financial statements as the Company acquired the Four Branches and
the operations of the Company before the acquisition of the Four Branches were insignificant relative to the operations acquired.</p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 71%; padding-left: 5.4pt; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Customer Relationships</font></td>
<td style="width: 10%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 17%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,130,000</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 5.4pt; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Non-complete Agreements</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">70,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 5.4pt; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Goodwill</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,466,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 5.4pt; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Purchase Price</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,666,000</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended June 30, 2016</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font><br />
<font style="font: 10pt Times New Roman, Times, Serif"><b>June 30, 2015</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended June 30, 2015</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 46%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Net revenues</font></td>
<td style="width: 5%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,958,160</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 5%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 11%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3,438,419</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 5%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">7,439,887</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Income (loss) from operations</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(219,281</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">14,575</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(7,889</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Net loss</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,110,698</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(40,473</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(120,255</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Net loss per share</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1.21</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(0.05</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(0.16</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
</table>
2666000
755000
29110
160000
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
4 - Liquidity and Capital Resources</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The accompanying consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of June 30, 2016, the Company had a stockholders’ deficit of $71,371
and a working capital deficit of $2,002,678. For the six months ended June 30, 2016 the Company had a net loss of $785,791. The
Company’s stockholders’ deficiency is primarily due to, among other reasons, funding its historical net losses.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company’s principal
sources of liquidity include cash from operations and proceeds from debt and equity financings. As of June 30, 2016, the Company
had $84,133 in cash.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company is funding its
operations primarily through the sale of equity, convertible notes payable and shareholder loans. In the event the Company experiences
liquidity and capital resources constraints because of greater than anticipated sales growth or acquisition needs, the Company
may need to raise additional capital in the form of equity and/or debt financing including refinancing its current debt. Issuances
of additional shares will result in dilution to its existing shareholders. There is no assurance that the Company will achieve
any additional sales of its equity securities or arrange for debt or other financing to fund any potential acquisition needs or
increased growth. If such additional capital is not available on terms acceptable to the Company, or at all, then the Company may
need to curtail its operations and/or take additional measures to conserve and manage its liquidity and capital resources, any
of which would have a material adverse effect on its business, results of operations and financial condition. The ability to successfully
resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated
financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash
and services during the next 12 months.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
5 – DISCONTINUED OPERATIONS</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On December 31, 2015, the
Company entered into a Stock Purchase Agreement (“SPA”) with Pour Les Enfant, LLC, a Louisiana limited liability company
(“Pour Les Enfant”). Pursuant to the SPA, the Company, as sole shareholder of EmployUS, Ltd. Completed the split-off
by transferring to Pour Les Enfant all outstanding shares and tangible assets of EmployUS, Ltd.. In consideration thereof, Pour
Les Enfant assumed all liabilities of EmployUS, Ltd. Associated with monies owed to the Internal Revenue Service for late payroll
taxes; and all corporate, personal, and validity guarantees associated with the Crestmark Bank Loan and Security Agreement. Pursuant
to the SPA, Brent Callais and Brian McLoone, directors, executives and controlling shareholders of the Company, each agreed to
transfer to the Company 91,000 shares of the Company’s common stock and one share of the Company’s preferred stock,
for immediate cancellation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The following table summarizes
the results from discontinued operations:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Ended</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Six Months</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Ended</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">NET REVENUES</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 56%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Contract staffing services</td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,438,419</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,439,887</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">COST OF SERVICES</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,772,761</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,077,807</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">GROSS PROFIT</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">665,658</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,362,080</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 18pt">SELLING, GENERAL AND ADMINISTRATIVE</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">634,091</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,219,029</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">INCOME (LOSS) FROM OPERATIONS</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">31,567</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">143,051</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 18pt">OTHER EXPENSE</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(46,169</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(100,812</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">INCOME (LOSS) FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(14,602</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">42,239</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">(Provision) benefit for income taxes</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">NET  INCOME (LOSS) OF EMPLOYUS, LTD.</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(14,602</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">42,239</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 7 –
notes payable – related party</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On May 20, 2014, the Company
issued a promissory note for $94,500 for cash to a shareholder of the Company that is to be repaid in full by May 20, 2015. The
note accrues interest expense at 10% per annum and in accordance with the promissory note, there is a late fee of $100 per day
for each day the note remains unpaid beyond the maturity date. Interest and late fee expense for the three months ended June 30,
2016 and 2015 was $11,463 and $6,462, respectively and for the six months ended June 30, 2016 and 2015 was $22,925 and $8,825,
respectively. The Company recorded late fees payable of $40,600 and $22,400 and accrued interest payable of $19,406 and $14,681,
as of June 30, 2016 and December 31, 2015, respectively, and is included in accounts payable and accrued expenses – related
party as of June 30, 2016 and December 31, 2015.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On July 14, 2014, the Company
issued a promissory note for $12,500 for cash to a shareholder of the Company that is to be repaid in full by July 14, 2015. The
note accrues interest expense at 10% per annum and in accordance with the promissory note, there is a late fee of $100 per day
for each day the note remains unpaid beyond the maturity date. Interest and late fee expense for the three months ended June 30,
2016 and 2015 was $9,413 and $320, respectively and for the six months ended June 30, 2016 and 2015 was $18,825 and $632, respectively.
The Company recorded late fees payable of $35,100 and $16,900 and accrued interest payable of $2,458 and $1,833, as of June 30,
2016 and December 31, 2015, respectively, and is included in accounts payable and accrued expenses – related party as of
June 30, 2016 and December 31, 2015.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 1, 2016, in conjunction
with Agreement for Purchase and Sale of Assets (Note 3), the Company issued an unsecured non-interest bearing promissory note
to Labor Smart, Inc., due on April 1, 2018 with a face amount of $755,000 and a fair value of $506,000. In accordance with FASB
ASC 835-30 "Imputation of Interest", interest has been imputed on the promissory note at a market interest rate of 22%
per annum. At June 30, 2016, the promissory note has been recorded net of debt discount of $221,685. Amortization of debt discount
of $27,315 has been included in interest expense in the consolidated statements of loss for the three and six months ended June
30, 2016. The debt discount is being amortized on the effective interest method.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
6 – Identifiable Intangible Assets </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify">Intangible assets comprise
customer relationships and non-compete agreements which are recorded at cost.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>June 30, 2016</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2015</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt; width: 58%"><font style="font: 10pt Times New Roman, Times, Serif">Customer relationships</font></td>
<td style="width: 8%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,130,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 8%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Non-compete agreements</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">70,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,200,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(60,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Identifiable Intangible Assets</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,140,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify; background-color: white">On
April 1, 2016, the Company acquired and commenced amortization of identifiable intangible assets upon closing of the business
acquisition for the Four Branches. During the three months ended June 30, 2016 $60,000 was recorded as amortization. The Company
estimates amortization over the next five years to be as follows: 2016 (remaining) $120,000 and the following four years $240,000
per annum.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">June 30, 2016</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">December 31, 2015</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 56%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Customer relationships</td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">1,130,000</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Non-compete agreements</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">70,000</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,200,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Accumulated amortization</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(60,000</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Identifiable Intangible Assets</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,140,000</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">]$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
8 – convertible promissory note – related party</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On December 18, 2015, the Company
entered into a Convertible Promissory Note (“Note”) with Labor Smart Inc. (“Holder”) in the original principal
amount of $80,000 bearing a 12% annual interest rate and maturing on December 16, 2016. In conjunction with the issuance of the
Note, as further consideration, the Company issued the Holder one (1) share of Series A Preferred Stock of the Company. Each share
of Series A Preferred Stock gives the holder voting rights equal to 2 votes for every one share of common stock outstanding at
the time of a vote of shareholders and does not have any additional rights or preferences. This Note together with any unpaid accrued
interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price
calculated at 75% of the market price which means the lowest trading price during the thirty trading day period ending on the latest
complete trading day prior to the conversion date. The Company may repay the Note if repaid within 120 days of date of issue at
125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus
interest and between 151 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does
not have the right of prepayment. At June 30, 2016, the Note includes principal of $80,000 and accrued interest of $21,124 less
unamortized debt discount of $37,143. See Note 9 – Convertible Promissory Note Derivative Liability – Related Party.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
9 – convertible promissory notes</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On March 29, 2016, with an
effective date of April 5, 2016, in conjunction with the Agreement for Purchase and Sale of Assets (Note 3), the Company entered
into a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”) with TCA Global Credit Master Fund,
LP, a Cayman Islands limited partnership (“TCA”), pursuant to which TCA agreed to loan up to a maximum of three million
dollars ($3,000,000) to us for working capital purposes. A total of $1,300,000 was funded by TCA in connection with the closing
of the Agreement. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Senior Secured Revolving Convertible
Promissory Note (the “Revolving Note”), the repayment of which is secured by Security Agreements executed by us and
our subsidiary, The Staff Fund I, LLC. Pursuant to the Security Agreements, the repayment of the Revolving Note is secured by a
security interest in substantially all of our assets in favor of TCA. The initial Revolving Note in the amount of $1,300,000 is
due and payable along with interest thereon on October 5, 2016, and bears interest at the minimum rate of 12% per annum, increasing
to 22% per annum upon the occurrence of an Event of Default, as defined in the Credit Agreement. Upon an Event of Default, TCA
shall have the right to convert all or any portion of the Revolving Note into shares of the Company’s common stock. The conversion
rate shall be 85% of the lowest VWAP of the Company’s stock for the five days preceding the conversion date. The Credit Agreement
provides for certain contractual rights to TCA. TCA has influence and veto power over key decisions which effect operating, investing
and financing activities of the Company including the right to approve the transfer agent, maintenance of insurance, approve the
selection of management after performing background investigations, approve all capital expenditures, approve issuance of stock,
approve opening new bank accounts and approve change in control of the Company.  The Credit Agreement also provides that all
cash receipts from customers are required to be deposited in a lock box account. Distributions from the lock box account are made
to the Company only after obligations to TCA are satisfied. TCA with absolute discretion may withhold cash in the lock box in order
to protect collateral. During the period ended June 30, 2016, the Company paid $122,192 in cash for principal and 47,798 for interest
and fees.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">At June 30, 2016, the Note
includes principal of $1,177,808 and accrued interest of $140,307 less unamortized debt discount of $685,714. See Note 10 –
Convertible Promissory Note Derivative Liability.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On May 26, 2016, the Company
entered into a Convertible Promissory Note (“Note”) with Group 10 Holdings, LLC (“Holder”) in the original
principal amount of $100,000 bearing a 10% annual interest rate and maturing December 26, 2016. This Note together with any unpaid
accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion
price calculated at 55% of the lowest trading price of any day during the 25 consecutive trading days prior to the date on which
the Holder elects to convert all or part of the Note. The Company may prepay the Note at any time while outstanding for no prepayment
penalty.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">At June 30, 2016, the Note
includes principal of $100,000 and accrued interest of $15,125 less unamortized debt discount of $83,645. See Note 10 – Convertible
Promissory Note Derivative Liability.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
10 – Convertible Promissory Note Derivative Liability </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Convertible Promissory
Notes with Labor Smart, Inc. with an issue date of December 18, 2015, TCA Global Credit Master Fund, LP with an issue date of April
5, 2016 and Group 10 Holdings, LLC with an issue date of May 26, 2016 were accounted for under ASC 815.  The variable conversion
price is not considered predominately based on a fixed monetary amount settleable with a variable number of shares due to the volatility
and trading volume of the Company’s common stock. The Company’s convertible promissory note derivative liability has
been measured at fair value at June 30, 2016 using the binominal lattice model.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The inputs into the binominal
lattice model are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Conversion price</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">$1.05 per share</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 18pt">Risk free rate</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 18%; text-align: right">0.64</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">178 – 224</font></td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Expected life</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.46  - 1.00 years</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 12pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Changes
in convertible promissory note derivative liability during the six months ended June 30, 2016 were as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at December 31, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">178,959</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Initial valuation of derivatives</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">852,612</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of derivative <br /> Liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(655,395</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">376,176</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Changes
in convertible promissory note derivative liability party during the three months ended June 30, 2016 were as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at March 31, 2016</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">99,617</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Initial valuation of derivatives</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">852,612</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of derivative <br /> Liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(576,053</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">376,176</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 11 –
due to stockholder</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt">Amounts due to stockholder of $28,500 is non-interest
bearing, unsecured and have no specific terms of repayment.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 13 –
Stockholders’ Deficit</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On March 8, 2016, the Company
approved and effected a 1-for 50 reverse stock split of issued and outstanding common shares. All share information has been revised
to reflect the reverse stock split from the Company’s inception.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 1, 2016, the Company
issued 600,000 shares of common stock with a fair value of $1,080,000 ($1.80 per share based on the closing price of the Company
common stock on March 31, 2016) in conjunction with the Agreement for Purchase and Sale of Assets (Note 3).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify; background-color: white">On
April 1, 2016, as a requirement of the purchase of the operating assets, the one (1) issued and outstanding share of Series A Preferred
Stock owed by Labor Smart, Inc. was transferred to Kimberly Thompson, the Chief Executive Officer of the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 25, 2016, the Board
of Directors authorized the issuance of 60,000 shares of common stock of the Company to Kimberly Thompson, the Chief Executive
Officer of the Company, for compensation valued at $109,200 ($1.82 per share) is expensed immediately and is included in selling,
general and administrative expense in the consolidated statement of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Non-controlling
interest</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">During the six months ended
June 30, 2016, the subsidiary of the Company, Staff Fund I, LLC, issued membership interests for cash proceeds of $14,000.</p>
<p style="font: 11pt/106% Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at December 31, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">0</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Issue of membership interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Net loss attributed to non-controlling interest</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,560</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,440</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at March 31, 2016</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">12,438</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Net income (loss) attributed to non-controlling interest</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,440</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 12 –
Series B Preferred Stock</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b> </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On March 29, 2016, the Board
of Directors Board designated sixty (60) shares of preferred stock, par value $0.001 per share as Series B Preferred Stock (“Series
B Stock”). The Series B Stock is being issued to the owner of the Series B Preferred Stock (“Holder”) in connection
with the Senior Secured Revolving Credit Facility Agreement between the Company and TCA, effective as of April 5, 2016 (Note 3).
The Series B Stock is non-voting and not entitled to dividends. Upon liquation, dissolution or winding up of the Company, the Holder
is entitled to a liquidation preference of $25,000 per share of Series B Stock. The Holder may convert Series B Stock into shares
of authorized but unissued common stock equal to $25,000 divided by the average VWAP for five business days immediately prior to
the conversion date.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company has classified
Series B Stock as a liability in these consolidated financial statements in accordance with ASC 480, Liabilities – Distinguishing
Liabilities from Equity, as the Series B Stock has a fixed monetary amount known at inception and is settable in a variable amount
shares based on the fair value of the shares of the Company’s common stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On April 1, 2016, the Company
issued thirty (30) shares of the Company’s Series B Stock to TCA an advisory fee with a fair value of $750,000. The Series
B Stock was issued in conjunction with the convertible note payable issued to TCA and was recorded as debt discount. The amount
was classified as a current liability as the shares are expected to be redeemed within one year.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b>Note
14 - Contingencies and Commitments</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Litigation</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company may be subject
to various claims relating to matters arising in the ordinary course of business that are typically covered by insurance. The amount
of liability, if any, from these claims cannot be determined with certainty; however, management is of the opinion that the outcomes
will not have a material adverse impact on the Company’s financial position or results of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i> </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"><font style="font-variant: small-caps"><b><i>Leases</i></b></font> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company leases space for
five of its branch offices and for its corporate headquarters, located in Kennesaw, Georgia. For the three and six months ended
June 30, 2016 rent expense was $27,006 and $31,428, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">As of June 30, 2016, future
minimum lease payments due under non-cancelable lease agreements having initial terms in excess of one year, including certain
closed offices, are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Years</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt/106% Times New Roman, Times, Serif">Amount</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 45%; text-align: justify; padding-left: 18pt">2016 (remaining)</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 43%; text-align: right">42,705</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">61,459</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">48,133</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 18pt">2019</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16,511</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 18pt">Total</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">168,808</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Note 15- Subsequent
Events</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">On July 11, 2016, the Company
issued 7,000 shares of common stock for $7,000 in cash ($1.00 per share).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b><i>Basis of presentation</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted
in the United States of America (“US GAAP”) for interim financial information and with the instructions to Article 8
of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete consolidated
financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.
Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected
for any subsequent quarter or for the year ending December 31, 2016. The unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s
Annual Report on Form 10-K filed on April 13, 2016 for the year ended December 31, 2015.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>principles
of consolidation</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The condensed consolidated financial
statements include the accounts of the Company’s one operating subsidiary.  All significant inter-company
transactions and balances are eliminated in consolidation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Use
of Estimates</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of condensed consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates. Significant matters requiring the use of estimates and assumptions
include, but may not be limited to, accounts receivable allowances, goodwill, intangible assets, valuation allowance for deferred
tax assets and valuation of derivative liabilities. Management believes that its estimates and assumptions are reasonable, based
on information that is available at the time they are made.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Revenue
Recognition</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Contract staffing service revenues
are recognized when services are rendered. The Company recognizes revenue in accordance with Accounting Standards Codification
(“ASC”) 605 “Revenue Recognition”, which requires that four basic criteria be met before revenue can be recognized:
(i) persuasive evidence that an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably
assured; and (iv) services have been rendered.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Cash
and Cash Equivalents</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers highly liquid
investments with original maturities of three months or less when purchased as cash equivalents. At times throughout the year,
the Company might maintain bank balances that may exceed Federal Deposit Insurance Corporation (FDIC) insured limits. Periodically,
the Company evaluates the credit worthiness of the financial institutions, and has not experienced any losses in such accounts.
As of June 30, 2016 and December 31, 2015, the Company did not have any cash equivalents.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Cash
- Restricted</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Restricted cash represents cash in
a lockbox account by held by TCA Global Credit Master Fund, LP in according with the Senior Secured Revolving Credit Facility
Agreement. The Company considered $71,290, as restricted cash at June 30, 2016. No cash was considered restricted at December
31, 2015. (See Note 8)</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Accounts
Receivable</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company extends credit to its customers
based on an evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment
terms. An allowance for doubtful accounts is recorded as a charge to bad debt expense where collection is considered doubtful
due to credit issues. This allowance reflects management’s estimate of the potential losses inherent in the accounts receivable
balance, based on historical loss statistics and known factors impacting its customers. The nature of the contract service business,
where companies are dependent on employees for their production cycle, generally results in a nominal provision for doubtful accounts.
Based on management’s review of accounts receivable, an allowance for doubtful accounts was not material for any of the periods
presented. The Company charges uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible.
The Company does not accrue interest on past due receivables.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Net
(Loss) Income per Common Share</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Net (loss) income per common share
is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net (loss) income per
common share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during
the period.  Diluted net (loss) income per common share is computed by dividing net (loss) income by the weighted average
number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the
potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.
At June 30, 2016 and December 31, 2015, the Company excluded 1,845,151 and 151,963 common stock issuable upon conversion of convertible
notes payable and Series B Stock, respectively, as their effect would have been anti-dilutive.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Identifiable
Intangible Assets</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Identifiable intangible assets consist
primarily of customer relationships and non-compete contracts. These assets are tested for impairment using discounted cash flow
methodology annually and whenever there is an impairment indicator. Estimating future cash flows requires significant judgment
and projections may vary from cash flows eventually realized. Several impairment indicators are beyond the Company’s control,
and determining whether or not they will occur cannot be predicted with any certainty. Customer relationships and non-compete
contracts are amortized on a straight-line basis over an estimated life of five years.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Goodwill</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill represents the premium paid
over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations.
The Company performs a goodwill impairment test on at least an annual basis at the reporting unit level. Application of the goodwill
impairment test requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts,
estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination
of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination
of fair value and/or conclusions on goodwill impairment for each reporting unit. The Company will conduct its annual goodwill
impairment test as of December 31 of each year or more frequently if indicators of impairment exist. The Company periodically
analyzes whether any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator
of impairment has occurred. Such indicators may include a sustained significant decline in our stock price and market capitalization,
a significant adverse change in legal factors or in the business climate, unanticipated competition and/or slower expected growth
rates, adverse actions or assessments by a regulator, among others. The Company compares the fair value of its reporting unit
to its respective carrying value, including related goodwill. Future changes in the industry could impact the results of future
annual impairment tests. There can be no assurance that future tests of goodwill impairment will not result in impairment charges.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Fair
Value Measurement</i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As required by the Fair Value
Measurements and Disclosures Topic of the FASB ASC (“ASC 820-10”), fair value is measured based on a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted
prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly
or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity
to develop its own assumptions.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The three levels of the fair
value hierarchy are described below:</p>
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="width: 1%; padding-left: 10pt; line-height: 107%"> </td>
<td style="vertical-align: top; width: 10%; padding-left: 10pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 1</font></td>
<td style="vertical-align: top; width: 89%; padding-left: 10pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; </font></td></tr>
<tr>
<td style="padding-left: 10pt; line-height: 107%"> </td>
<td style="vertical-align: top; padding-left: 10pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 2</font></td>
<td style="vertical-align: top; padding-left: 10pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; </font></td></tr>
<tr>
<td style="padding-left: 10pt; line-height: 107%"> </td>
<td style="vertical-align: top; padding-left: 10pt; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Level 3</font></td>
<td style="vertical-align: top; padding-left: 10pt; text-align: justify; line-height: 107%"><font style="font: 10pt/106% Times New Roman, Times, Serif">Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Convertible promissory notes
payable and convertible promissory note derivative liability – related party is measured at fair value on a recurring basis
using Level 3 inputs.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the
Company’s condensed consolidated financial statements for accounts receivable, prepaid expenses, accounts payable and accrued
expenses approximate their fair value because of the immediate or short-term nature of these consolidated financial instruments.
The carrying amounts reported in the condensed consolidated balance sheets for its line of credit and convertible notes payable
approximates fair value as the contractual interest rate and features are consistent with similar instruments of similar risk
in the market place.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"><b>Convertible
Promissory Notes</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font-variant: small-caps"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; width: 20pt; text-align: right; line-height: 107%; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif">i)  </font></td>
<td style="vertical-align: top; text-decoration: underline; line-height: 107%; text-align: justify; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif"><u>Beneficial Conversion Feature</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">If the conversion features
of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as
a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic
470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded
net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using
the effective interest method.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20pt; line-height: 107%; padding-left: -10pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">ii)</font></td>
<td style="text-decoration: underline; line-height: 107%; text-align: justify; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif"><u>Debt Discount</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company determines if
the convertible debenture should be accounted for as liability or equity under ASC 480, Liabilities — Distinguishing Liabilities
from Equity. ASC 480, applies to certain contracts involving a Company's own equity, and requires that issuers classify the following
freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, obligations that require or may
require repurchase of the issuer's equity shares by transferring assets (e.g., written put options and forward purchase contracts),
and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">– A fixed monetary
amount known at inception, for example, a payable settleable with a variable number of the issuer's equity shares with an issuance
date fair value equal to a fixed dollar amount,</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">– Variations in something
other than the fair value of the issuer's equity shares, for example, a financial instrument indexed to the S&P 500 and settleable
with a variable number of the issuer's equity shares, or</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">– Variations inversely
related to changes in the fair value of the issuer's equity shares, for example, a written put that could be net share settled.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">If the entity determined
the instrument meets the guidance under ASC 480 the instrument is accounted for as a liability with a respective debt discount.
The Company records debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized
to non-cash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of
the unamortized amounts is immediately expensed.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 20pt; line-height: 107%; padding-left: -10pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">iii)</font></td>
<td style="text-decoration: underline; line-height: 107%; text-align: justify; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif"><u>Derivative Financial Instruments</u></font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">Derivative financial instruments,
as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial
instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or
other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing
or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured
at fair value and recorded as liabilities or, in rare instances, assets.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 20pt; text-align: justify">The Company does not use derivative
financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial
instruments including senior convertible promissory notes payable and freestanding stock purchase warrants with features that
are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii)
may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be
carried as derivative liabilities, at fair value, in our consolidated financial statements.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-variant: small-caps"><b><i>Recent
Accounting Pronouncements </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the FASB issued
a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard,
an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset.
Amortization of the costs is reported as interest expense. The accounting standard is effective for annual reporting periods beginning
after December 15, 2015 and was adopted in the first quarter of 2016.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued
a new accounting standard which is intended to simplify the accounting for share-based compensation. This standard simplifies the
accounting for income taxes in relation to share-based compensation, modifies the accounting for forfeitures, and modifies the
statutory tax withholding requirements. This standard will be effective for fiscal years beginning after December 15, 2016, including
interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the new accounting standard
will have on its consolidated financial position, results of operations or cash flows.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Three Months</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Ended</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Six Months</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Ended</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">NET REVENUES</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 56%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Contract staffing services</td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,438,419</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,439,887</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">COST OF SERVICES</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,772,761</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,077,807</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">GROSS PROFIT</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">665,658</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,362,080</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 18pt">SELLING, GENERAL AND ADMINISTRATIVE</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">634,091</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,219,029</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">INCOME (LOSS) FROM OPERATIONS</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">31,567</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">143,051</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 18pt">OTHER EXPENSE</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(46,169</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(100,812</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">INCOME (LOSS) FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(14,602</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">42,239</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">(Provision) benefit for income taxes</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">NET  INCOME (LOSS) OF EMPLOYUS, LTD.</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(14,602</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">42,239</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The inputs into the binominal
lattice model are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Conversion price</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">$1.05 per share</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 18pt">Risk free rate</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 18%; text-align: right">0.64</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">178 – 224</font></td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Expected life</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.46  - 1.00 years</font></td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Changes
in convertible promissory note derivative liability during the six months ended June 30, 2016 were as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at December 31, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">178,959</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Initial valuation of derivatives</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">852,612</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of derivative <br /> Liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(655,395</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">376,176</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Changes
in convertible promissory note derivative liability party during the three months ended June 30, 2016 were as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at March 31, 2016</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">99,617</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Initial valuation of derivatives</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">852,612</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of derivative <br /> Liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(576,053</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">376,176</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at December 31, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">0</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">Issue of membership interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Net loss attributed to non-controlling interest</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,560</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,440</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 18pt; text-align: justify; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 70%; text-align: justify; padding-left: 5.4pt">Opening balance at March 31, 2016</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">12,438</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Net income (loss) attributed to non-controlling interest</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Closing balance at June 30, 2016</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,440</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
506000
1130000
1130000
70000
70000
2958160
3438419
7439887
-60000
1200000
120000
240000
240000
240000
240000
1.78
2.24
P5M17D
P1Y
852612
852612
48133
16511
16511
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">Years</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt/106% Times New Roman, Times, Serif">Amount</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 45%; text-align: justify; padding-left: 18pt">2016 (remaining)</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 43%; text-align: right">42,705</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">61,459</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-left: 18pt">2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">48,133</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 18pt">2019</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16,511</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 18pt">Total</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">168,808</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>