The following discussion and analysis of our results of operations and financial
condition for the fiscal years ended December 31, 2018 and 2017 should be read
in conjunction with our financial statements and the notes to those financial
statements that are included elsewhere in this annual report. Our discussion
includes forward-looking statements based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and
intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the "Risk Factors", "Cautionary Notice
Regarding Forward-Looking Statements" and "Description of Business" sections and
elsewhere in this annual report. We use words such as "anticipate," "estimate,"
"plan," "project," "continuing," "ongoing," "expect," "believe," "intend,"
"may," "will," "should," "could," "predict," and similar expressions to identify
forward-looking statements. Although we believe the expectations expressed in
these forward-looking statements are based on reasonable assumptions within the
bound of our knowledge of our business, our actual results could differ
materially from those discussed in these statements. Factors that could
contribute to such differences include, but are not limited to, those discussed
in the "Risk Factors" section of this report. We undertake no obligation to
update publicly any forward-looking statements for any reason even if new
information becomes available or other events occur in the future.



In addition to historical information, this Annual Report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual
results could differ materially from those projected in the forward-looking
statements as a result of a number of factors, risks and uncertainties,
including the risk factors set forth in Item 1A. above and the risk factors set
forth in this Annual Report. Generally, the words "anticipate", "expect",
"intend", "believe" and similar expressions identify forward-looking statements.
The forward-looking statements made in this Annual Report are made as of the
filing date of this Annual Report with the SEC, and future events or
circumstances could cause results that differ significantly from the
forward-looking statements included here. Accordingly, we caution readers not to
place undue reliance on these statements. We expressly disclaim any obligation
to update or alter our forward-looking statements, whether, as a result of new
information, future events or otherwise after the date of this document.



Not applicable.







  19






Overview

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

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





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

to
date.

Election under JOBS Act of 2012





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

time
frame.

Jumpstart Our Business Startups Act

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

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


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

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





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







  20






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



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

(ii) The completion of the fiscal year of the fifth anniversary of the


           company's IPO;

(iii) The company's issuance of more than $1 billion in nonconvertible debt


           in the prior three-year period; or

(iv) The company becoming a "larger accelerated filer" as defined under the


           Securities Exchange Act of 1934.




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




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



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

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


          audited;




     (iii) Executive compensation only needs to be presented in the limited
           format now required for smaller reporting companies. (A smaller
           reporting company is one with a public float of less than $75

million


           as of the last day of its most recently completed second fiscal
           quarter)




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



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

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


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



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







  21






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



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



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



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

use
of the transitional period.

Off-balance sheet arrangements





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

Significant Accounting Policies





Our financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Note 2 of the Notes to Financial Statements describes the
significant accounting policies used in the preparation of the consolidated
financial statements. Certain of these significant accounting policies are
considered to be critical accounting policies, as defined below.



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







  22






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



Use of Estimates- These financial statements have been prepared in accordance
with accounting principles generally accepted in the United States and,
accordingly, require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.



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



Revenue Recognition- The Company adopted ASU 2014-09, "Revenue from Contracts
with Customers" on January 1, 2018, using the modified retrospective method,
which did not have a material impact on the timing and amount of product
revenues.



The new revenue recognition standard prescribes a five-step model that focuses
on transfer of control and entitlement to payment when determining the amount of
revenue to be recognized. Under the new guidance, an entity is required to
perform the following five steps: (1) identify the contract(s) with a customer;
(2) identify the performance obligations in the contract; (3) determine the
transaction price; (4) allocate the transaction price to the performance
obligations in the contract; and (5) recognize revenue when (or as) the entity
satisfies a performance obligation. The Company's revenues accounted for under
ASC 606 do not require significant estimates or judgments based on the nature of
the Company's revenue. The Company's contracts do not include multiple
performance obligations or variable consideration.



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



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



Intangible and Long-Lived Assets - We follow FASB ASC 360-10-35 which has
established a "primary asset" approach to determine the cash flow estimation
period for a group of assets and liabilities that represents the unit of
accounting for a long-lived asset to be held and used. Long-lived assets to be
held and used are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The carrying amount of a long-lived asset is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to sell. During
the years ended December 31, 2019 and 2018, no impairment losses were
recognized.



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







  23






Plan of Operations



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

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

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





Going Concern



As of December 31, 2019, RC-1, Inc. had an accumulated deficit of $3,340,421.
Also, during the year ended December 31, 2019, we had a net decrease in cash of
$490. These factors raise substantial doubt about our ability to continue as a
going concern.



Management expects to raise $400,000 in capital through the issuance of debt and
equity and believes it will be able to raise sufficient capital over the next
twelve months to finance operations. However, there can be no assurances that
the Company will be successful in this regard or will be able to eliminate its
operating losses. The accompanying financial statements do not contain any
adjustments which may be required as a result of this uncertainty.



Management estimates the cost of operating the business through March 31, 2021
will require additional capital of up to Four Hundred Thousand dollars
($400,000) consisting of: $20,000 for registration and licenses required for
entry in sanctioned racing events; $60,000 for travel and lodging; $80,000 for
marketing and branding; $40,000 for legal and accounting; $15,000 for engineers
and consultants; $15,000 for parts,$50,000 for engine and transmission leases.
$30,000 for fuels and tires; $20,000 for racecar transporter travel; $40,000 for
debt service of all Company notes payable; and $30,000 in air and rental cars.

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





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



The Company's capital requirements consist of general working capital needs,
scheduled principal and interest payments on debt when required, obligations,
and capital expenditures. The Company's capital resources consist primarily of
cash generated from proceeds through the issuances of common stock. At December
31, 2019, the Company had cash of $50,106.







  24

Results of Operations for the Years Ended December 31, 2019 and 2018





Revenues



In the years ended December 31, 2019 and 2018, we had revenues in the amounts of
$110,508 and $163,500 respectively, which was a decrease of $52,992. The Company
earned all of its $163,500 in revenues in 2018 from related party NASCAR
consulting services and unrelated party consulting fees. In 2019, revenue of
$110,508 was earned for consulting fees from related parties. The Company
provided consulting services to a race team competing NASCAR race events.
Revenue decreased in 2019 due to a decrease in related party consulting fees for
the period.



Operating Expenses.



Race Expenses




For the year ended December 31, 2019, there were no race expenses, compared to
$10,274 for the year ended December 31, 2018. The decrease was primarily the
result of the Company not participating in race events in 2019.



Consulting to related parties



For the year ended December 31, 2019, consulting to related parties decreased to
$60,000 as compared to $66,533 from the prior year ended December 31, 2018 which
was a decrease of $6,533. The decrease in services in 2019, which consisted of
race event management, was due to a decrease in the number of events to which
services were provided in 2019 as compared to 2018.

General and Administrative Expense





For the year ended December 31, 2019, general and administrative expenses
decreased to $73,679 as compared to $155,750 from the prior year ended December
31, 2018 which was a decrease of $82,071. The decrease was primarily due to bad
debt expenses in 2018 from write-off of a note receivable.



Professional Fees

Professional fees for the year ended December 31, 2019 were $38,550 compared to $59,407 for the period ended December 31, 2018.





Interest Expense

For the year ended December 31, 2019, net interest expense decreased to $8,156 as compared to $18,581 for the year ended December 31, 2018, a decrease of $10,425. The decrease in interest expense was due to the conversion of indebtedness into common stock.





Net Loss



Our net loss from operations decreased to $48,985 for the year ended December
31, 2019, from $142,128 for the year ended December 31, 2018 due to a gain on
sale of asset to related party and the reasons described above.







  25

Liquidity and Capital Resources


Liquidity is the ability of a company to generate adequate amounts of cash to
meet its needs for cash. The following table provides certain selected balance
sheet comparisons between December 31, 2019, and December 31, 2018:



                                      December 31,       December 31,          $            Percent
                                          2019               2018            Change         Change
Working Capital                      $     (348,624 )   $     (335,708 )      (12,916 )            3%
Cash                                 $       50,106     $       50,596           (490 )           -1%
Total current assets                 $      100,998     $      110,596         (9,598 )           -9%
Total assets                         $      108,155     $      154,122        (45,967 )          -30%
Accounts payable                     $       29,668     $       56,792        (27,124 )          -48%
Accrued Liabilities                  $      161,601     $       90,264         71,337             79%

Related Party Interest Payable       $      119,471     $      118,816            655              1%
Non-Related Party Interest Payable   $       44,918     $       37,418          7,500             20%
Line of Credit                       $       75,000     $       75,000              -              0%
Line of credit to related parties    $       18,964     $       68,014
  (49,050 )          -72%
Total current liabilities            $      449,622     $      446,304          3,318              1%
Total liabilities                    $      449,622     $      446,604          3,018              1%





Our working capital deficit increased by $12,916 from December 31, 2018 to
December 31, 2019 mainly from additional related party debt and accrued interest
on said related party debt. The Company's assets decreased from $154,122 as of
December 31, 2018 to $108,155 as of December 31, 2019 mainly due to the
write-off of a note receivable in 2018 and amortization of prepaid rent.



Operating Activities

Net cash provided by continuing operating activities during 2019 was $48,860 as compared to $104,764 used in fiscal 2018. This was due primarily to the write-off of the note receivable and accrued interest receivable.





Investing Activities

There was no cash used in investing activities during 2019 as compared to $11,013 in 2018.





Financing Activities



For the year ended December 31, 2019, net cash used in financing activities was
$49,350 which consisted of $215,000 in proceeds and repayments of $264,350 of
related party debt. For the year ended December 31, 2018, net cash used by
financing activities was $103,497 which consisted of net proceeds of $166,683
from line of credit, and $270,180 in repayments from related party debt.

LIQUIDITY AND CAPITAL RESOURCES

The Company had $50,106 in cash at December 31, 2019 with a working capital deficit of $(348,624). As of December 31, 2018, the Company had cash of $50,596 with a working capital deficit of $(335,708).





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







  26

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