Resolve Staffing, Inc (RSFF) - Description of business

The company is consistently late with their regulatory filings with the Securities and Exchange Commission.

On October 1, 2006, resolve staffing acquired Employee Leasing Servicer, Inc. This acquisition has considerably increased the company's revenues. However for the last 3 quarters the revenue has not been increasing much and the increased operating expenses keeps the company at the limit of net loss or gain.

For the last quarter ended September 30, 2007, the company has reported a total of $64.5 million in revenue. It has been 2% more than previous quarter. Also the net loss has turned to profit this quarter being $44 thousand compared to the $4 million loss over the previous quarter.

The company is completely out of cash so its ability to sustain operations is limited. The trend shows revenues can increase over time, however the increase seems to be rather small. Also seeing current situation operating expenses might increase faster than revenue as the company tries to expand.

The company relies on borrowed money as well as money it gets from stock issuance. The problem is the stock price has been falling for nearly a year so the stock doesn't look very attractive right now. Also the company is already heavily leveraged so it ability to borrow money might also appear to be limited.

Here's the description from company's SEC filing:

(a) DEVELOPMENT OF BUSINESS

Resolve Staffing, Inc. ("Resolve" or the "Company") was organized under the laws of the State of Nevada on April 9, 1998. We are engaged in providing temporary staffing services focusing on the professional, clerical, administrative and light industrial staffing market.

On September 27, 2001, Work Holdings LLC, a limited liability company controlled by Rene Morissette and William A. Brown, acquired 97.4% of our outstanding common stock, and in November 2001, entered into an agreement to acquire Integra Staffing, Inc. ("Integra") for 50,000 shares of our common stock. Work Holdings LLC was our parent prior to the acquisition of Integra.

Integra was organized on August 16, 1999 in the State of Florida and was engaged in human resource and temporary staffing. We acquired all of the outstanding capital stock of Integra on December 12, 2001 in exchange for 50,000 shares of our common stock. At the time of the exchange, the 50,000 shares represented 60% of our outstanding common stock.

On February 7, 2005 Resolve Staffing, Inc., entered into an asset acquisition agreement ("Agreement") with ELS, Inc., ("ELS") a company owned by Ronald Heineman, the Company's Chief Executive Officer. Pursuant to the Agreement Resolve Staffing, Inc., acquired a total of 10 employee staffing locations from ELS. The acquisition of these new locations is anticipated to significantly expand the geographic scope of the Company's operations.

We plan to grow our business through the acquisition of private companies in the staffing industry that would provide types of staffing and/or related services with which we are familiar. We may seek private staffing companies for acquisitions or strategic alliances both in and out of our current markets. We believe that by acquiring existing staffing companies it will enable us to:

o recruit well-trained, high-quality professionals; o expand our service offerings; o gain additional industry expertise; o broaden our client base; and o expand our geographic presence.

We do not currently have any agreements to acquire any company. While we may prefer to structure potential acquisitions in the form of an asset purchase, we may acquire private companies for a combination of cash and stock. We currently do not have the cash reserves to effect an acquisition, although we would consider entering into some type of financing arrangement to secure the cash needed to effect an acquisition. Since we currently do not have any signed acquisition or financing agreements, the terms of any such acquisition or financing would be speculative. There can be no assurance that required financing will be available on acceptable terms. Management further believes that negotiations with prospective target companies would be most effective once the Company's stock has a public market, of which there is no assurance. Management believes that private companies may be acquired using future payout and not require significant current cash outlay. Any such acquisition may require the issuance of large number of shares of common or preferred stock, which would have a dilutive effect on current shareholders. We do not anticipate that an acquisition of other staffing companies, if any, would result in a change in our control. However, since we cannot predict what the terms of any future acquisition, if any, there could exist a situation in which an acquisition might effect a change of control of our Company. If a change of control should occur, our current management may not be able to implement our current business plan, which could result in a new business plan by the new owners, which business plan may differ or completely deviate from our business plan. Upon a change of control, no assurances can be made of the future direction of our Company.

(b) BUSINESS OF ISSUER

GENERAL

The Company is engaged in providing human resource services (which includes recruiting, training, and placement of temporary personnel) focusing on the professional, clerical, administrative and light industrial staffing market on March 20, 2005 we had 1,108 employees, of whom 1,103 were flexible staffing personnel and 5 were employed in sales, administrative and management capacities. We have approximately 144 clients.

Staffing companies such as ours provide one or more of three basic services to clients: (i) flexible staffing; (ii) placement and search; and (iii) outplacement services. The temporary staffing industry consists of a number of sectors focusing on business needs that vary widely in duration of assignment and level of technical specialization. We operate primarily within the short-term, light industrial and clerical area of the temporary staffing industry.

COMPANY SERVICES

Resolve Staffing focuses on meeting our clients' flexible staffing needs, targeting opportunities in a fragmented growing market that we believe has been under-served by large, full-service staffing companies. Significant benefits to clients include providing the ability to outsource the recruiting and many logistical aspects of their staffing needs, as well as converting the fixed cost of employees to the variable cost of outsourced services. A summary of our Payroll Administration Services and Aggregation of Statutory and Non-Statutory Employee Benefits Services are as follows:

- PAYROLL ADMINISTRATION SERVICES: We assume responsibility for our Resolve Staffing service employees for payroll and attendence record-keeping, payroll tax deposits, payroll tax reporting, all federal, state, and payroll tax reports (including 941s, 940s, W-2s, W-3s, W-4s and W-5s), state unemployment taxes, employee file maintenance, unemployment claims and monitoring and responding to changing regulatory requirements.

- AGGREGATION OF STATUTORY AND NON-STATUTORY EMPLOYEE BENEFITS SERVICES: We provide workers' compensation and unemployment insurance to our service employees. Workers' compensation is a state-mandated comprehensive insurance program that requires employers to fund medical expenses, lost wages, and other costs that result from work related injuries and illnesses, regardless of fault and without any co-payment by the employee. Unemployment insurance is an insurance tax imposed by both federal and state governments. Our human resources and claims administration departments monitor and review workers' compensation for loss control purposes.

We are the employer of record, with respect to flexible industrial staffing services and assume responsibility for most employment regulations, including compliance with workers' compensation and state unemployment laws. As part of our basic services in the flexible staffing market, we conduct a human resources needs analysis for clients and client employees. Such analysis includes, reviewing work schedules and productivity data, in addition to recruiting, interviewing, and qualifying candidates for available positions. Based on the results of our review, we recommend basic and additional services that the client should implement.

We provide certain other services to our flexible industrial staffing clients on a fee-for-service basis. These services include screening, recruiting, training, workforce deployment, loss prevention and safety training, pre-employment testing and assessment, background searches, compensation program design, customized personnel management reports, job profiling, turnover tracking and analysis, drug testing policy administration, affirmative action plans, opinion surveys and follow-up analysis, exit interviews and follow-up analysis, and management development skills workshops.

The focus of our temporary staffing service is to provide short and long term employees as well as temp-to-hire employees to financially secured employers. Our employees will, on average, work a 40 hour work week for a client, and will, on average, work for 2 employers per month. It is estimated that employees will work an average of 14 days per month. Our service specializes in clerical and light industrial staffing. Each applicant is thoroughly interviewed, tested, and screened to meet the requirements of our customers. For long term and temp-to-hire positions, a large percentage of our customers will interview our candidates and then select the one they believe to be best suited for the position.

SALES AND MARKETING

We market our flexible staffing services through a combination of direct sales, telemarketing, trade shows and advertising. We have three full time salespersons.

CLIENTS

Our clients represent a cross-section of the industrial sector, of which only one client currently represents more than 5% of our total revenues. We attempt to maintain diversity within our client base in order to decrease our exposure to downturns or volatility in any particular industry, but we cannot assure you that we will be able to maintain such diversity or decrease our exposure to such volatility. All prospective clients fill out a questionnaire to help us evaluate workers' compensation risk, creditworthiness, unemployment history, and operating stability. Generally, flexible staffing clients do not sign long-term contracts. We are not dependent on any one customer in any of the markets we serve.

COMPETITION

We compete with many small providers in addition to several large public companies, including Ablest, Inc., Spherion, Adecco, S.A., Kelly Services, Inc., Manpower, Inc., and others. There are limited barriers to entry and new competitors frequently enter the market. Although a large percentage of flexible staffing providers are locally operated, with fewer than five offices, most of the large public companies have significantly greater marketing, financial and other resources than us. We believe that by focusing primarily on customer service, we enjoy a competitive advantage over many of our competitors that attempt to provide a broader range of staffing services. We also believe that by targeting regional and local companies, rather than the national companies that are generally being pursued by our competitors; we can gain certain competitive advantages.

We believe that several factors contribute to obtaining and retaining clients in the professional, clerical, administrative, and light industrial staffing market. These factors include an understanding of clients' specific job requirements, the ability to reliably provide the correct number of employees on time, the ability to monitor job performance, and the ability to offer competitive prices. To attract qualified candidates for flexible employment assignments, companies must offer competitive wages, positive work environments, flexibility of work schedules, an adequate number of available work hours and, in some cases, vacation and holiday pay. We believe we are reasonably competitive in these areas in the markets in which we compete, although we cannot assure you that we will maintain a competitive standing in the future.

INDUSTRY REGULATION

Overview

As an employer, we are subject to federal, state, and local statutes and regulations governing our relationships with our employees and affecting businesses generally, including employees at client worksites. We assume the sole responsibility and liability for the payment of federal and state employment taxes with respect to wages and salaries paid to our employees. At December 31, 2003, payroll taxes for the fourth quarter of 2003 were past due in the amount of $71,453. These amounts were paid in full in January 2004. At December 31, 2004, the Company is up to date with its various payroll tax liabilities.

Employee Benefit Plans

We plan to offer various benefit plans to our worksite employees. These plans include a multiple-employer retirement plan, a cafeteria plan, a group health plan, a group life insurance plan, a group disability insurance plan and an employee assistance plan. Generally, employee benefit plans are subject to provisions of both the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In order to qualify for favorable tax treatment under the Code, the benefit plans must be established and maintained by an employer for the exclusive benefit of the employer's employees. An IRS examination may determine that we were not the employer of our worksite employees under Internal Revenue Code provisions applicable to employee benefit plans. If the IRS were to conclude that we were not the employer of our worksite employees for employee benefit plan purposes, those employees would not have qualified to make tax favored contributions to our multiple-employer retirement plans or cafeteria plan. If such conclusion were applied retroactively, employees' vested account balances, could become taxable immediately, we could lose our tax deduction to the extent the contributions were not vested, the plan trust could become a taxable trust and penalties could be assessed. In such a scenario, we could face the risk of potential litigation by some of our clients. As such, we believe that a retroactive application by the IRS of an adverse conclusion could have a material adverse effect on our financial position, results of operations and liquidity.

ERISA also governs employee pension and welfare benefit plans. The United States Supreme Court has held that the common law test of employment must be applied to determine whether an individual is an employee or an independent contractor under ERISA. If we were found not to be an employer for ERISA purposes, our employee benefit plans would not be subject to ERISA. As a result of such finding, we and our employee benefit plans would not enjoy the preemption of state law provided by ERISA and could be subject to varying state laws and regulations, as well as to claims based upon state common law.

Workers' compensation

Workers' compensation is a state mandated comprehensive insurance program that requires employers to fund medical expenses, lost wages and other costs resulting from work-related injuries and illnesses. In exchange for providing workers' compensation coverage for employees, employers are generally immune from any liability for benefits in excess of those provided by the relevant state statutes. In most states, the extensive benefits coverage for both medical costs and lost wages is provided through the purchase of commercial insurance from private insurance companies, participation in state-run insurance funds,

self-insurance funds, or, if permitted by the state, employer self-insurance. Workers' compensation benefits and arrangements vary on a state-by-state basis and are often highly complex. In Florida, for instance, employers are required to furnish, solely through managed care arrangements, the medically necessary remedial treatment for injured employees.

TRADEMARKS AND SERVICE MARKS

We do not have any registered trade or service marks. It is our intention to develop service marks as appropriate and seek federal registration when possible. We have begun the process of registering the mark "Resolve Staffing(TM)", and the name "Resolve Staffing" with a design, and, if federal registration is granted, we intend to develop Resolve Staffing as our brand identity.