ONE Bio 10QSB Quarterly report (small business)

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________.

Commission file number333-136643

CONTRACTED SERVICES, INC.

(Name of small business issuer in its charter)

Florida

59-3656663

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

Incorporation or organization)

5222 110^th Avenue North, Clearwater, Florida

33760

(Addres of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (727) 410-0740

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (x) Yes (__) No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) (__) Yes (x) No

The number of shares of the issuer’s common stock, part value $.001 per share, outstanding as of May 14, 2007 was 1,355,000.

Transitional Small Business Disclosure Format (Check one): (__) Yes (x) No

Part I. Financial Information

Item 1. Financial Statements.


Contracted Services, Inc. Consolidated Balance Sheets March 31, 2007 and 2006 (UNAUDITED)

			2007	2006
ASSETS
	Current Assets:
		Cash and Cash Equivalents	18,316.44	10,561.00
		Accounts Receivable	17,682.61	10,002.88
		Less: Reserve for Bad Debts	(735.73)	0.00
		Loans to Shareholder	1,077.60	7.09
	Total Current Assets		36,340.92	20,570.97
	Fixed Assets:
		Computer Equipment	2,365.00	2,365.00
		Mowing Equipment	19,112.98	27,420.68
		Vehicles	31,115.88	73,981.16
		Less: Accumulated Depreciation	(22,327.29)	(64,544.34)
	Total Fixed Assets		30,266.57	39,222.50

	Other Assets:
		Note Receivable - Idocubox - Note C	12,500.00	20,000.00
	Total Other Assets		12,500.00	20,000.00
	TOTAL ASSETS		79,107.49	79,793.47
LIABILITIES AND STOCKHOLDERS' EQUITY
	Current Liabilities:
		Accounts Payable	18,576.50	0.00
		Credit Cards Payable	23,463.46	6,226.63
		Sales Tax Payable	74.92	(108.50)
		Provision for Income Taxes	0.00	488.00
		Current Portion of Long-Term Liabilities - Note D	7,028.34	7,000.00
	Total Current Liabilities		49,143.22	13,606.13

	Long-Term Liabilities
		Notes Payable - Note D	29,112.31	26,251.66
	Total Long-Term Liabilities		29,112.31	26,251.66
	TOTAL LIABILITIES		78,255.53	39,857.79
	Stockholders' Equity
		Common Stock, $.01 par value, 75,000,000 shares
		authorized, 1,355,000 shares issued and outstanding	13,550.00	12,500.00
		Paid-In-Capital	27,989.67	25,157.67
		Retained Earnings	(40,687.71)	2,278.01
	Total Equity		851.96	39,935.68


	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				79,107.49		79,793.47

See accompanying notes and accountant’s report.


Contracted Services, Inc. Consolidated Statements of Operations For the Three Month Periods Ended March 31, 2007 and 2006 (UNAUDITED)

			2007	2006
	Revenues
		Sales - Computer Maintenance & Repairs	34,337.48	28,542.48
		Sales - Lawn Mowing Service	0.00	0.00
			34,337.48	28,542.48
	Operating Expenses:
		Accounting	1,500.00	4,000.00
		Advertising	5,084.15	1,924.26
		Automobile Expense	1,000.44	1,128.35
		Bad Debts	(203.82)	0.00
		Bank Charges	467.35	109.00
		Contract Labor	9,689.90	0.00
		Cost of Goods Sold	11,844.21	4,548.34
		Depreciation	3,611.17	4,829.93
		Dues & Subscriptions	799.59	497.35
		Employee Leasing	20,160.00	13,440.00
		Business Promotion	759.67	0.00
		Insurance	0.00	(524.67)
		Interest Expense	1,884.09	1,091.01
		Licenses and Permits	450.00	0.00
		Legal & Professional Fees	10,000.00	320.00
		Materials	20.95	726.55
		Mowing Expenses	0.00	236.83
		Office Expense	746.42	139.03
		Officers Compensation - Note G	960.00	960.00
		Penalties	0.00	135.15
		Postage	703.93	417.04
		Rent	0.00	123.60
		Software Support	499.00	0.00
		Telephone	984.07	960.37
		Travel & Entertainment	304.76	179.03
		Utilities	34.54	35.30
			71,300.42	35,276.47
			(36,962.94)	(6,733.99)
	Other Income
		Gain on Sale of Assets	2,064.37	9,500.00
			2,064.37	9,500.00


Income (Loss) Before Provision for Income Taxes		(34,898.57)	2,766.01
Provision for Income Taxes
	Current Tax Provision	0.00	488.00
	Deferred Taxes	0.00	0.00
		0.00	488.00
Net Income (Loss)		(34,898.57)	2,278.01
Earnings per common share		(0.03)	0.00

See accompanying notes and accountant’s report.


Contracted Services, Inc. Statement of Changes in Stockholder’s Equity For the Three Month Period Ended March 31, 2007 (UNAUDITED)

	Common Stock		Contributed	Retained
	Shares	Amount	Capital	Earnings	Total
Balances at January 1, 2007	1,355,000	$13,550.00	$27,029.67	(5,789.14)	$34,790.53

Net Income (Loss)				(34,898.57)	(34,898.57)

Contributed Noncash Officers Compensation – Note G			960.00		$960.00

Balances at March 31, 2007	1,355,000	$13,550.00	$27,989.67	($40,687.71)	$851.96

See accompanying notes and accountant’s report.


Contracted Services, Inc. Consolidated Statements of Cash Flows For the Three Month Period Ended March 31, 2007 and 2006

				2007	2006
	OPERATING ACTIVITIES:
		Net Income (Loss)		(34,898.57)	2,278.01
		Adjustments to reconcile Net Income (Loss)
		to net cash provided by operations:
			Depreciation	3,611.17	4,829.93
			Gain on Sale of Assets	(2,064.37)	(9,500.00)
			Noncash Officers Compensation	960.00	960.00
		(Increase) Decrease in:
			Accounts Receivable	39,560.48	(8,846.03)
		Increase (Decrease) in:
			Accounts Payable	5,541.50	(8,072.16)
			Credit Cards Payable	(2,864.65)	6,226.63
			Sales Tax Payable	268.07	(219.87)
			Provision for Income Taxes	(154.00)	488.00
				9,959.63	(11,855.49)
	INVESTING ACTIVITIES:
		Proceeeds from Sale of Assets		11,000.00	9,500.00
		Shareholder Loans		(11,610.89)	0.00
				(610.89)	9,500.00
	FINANCING ACTIVITIES:
		Payments on Notes Payable		(1,698.51)	(6,659.44)
				(1,698.51)	(6,659.44)
	NET CASH INCREASE (DECREASE) FOR THE YEAR			7,650.23	(9,014.93)
	BEGINNING CASH			10,666.21	19,575.93
	ENDING CASH			18,316.44	10,561.00

	SUPPLEMENTAL DISCLOSURE:
		Interest Expense		$1,884.09	$1,091.01
		Income Tax		$154.00	$0.00

	Noncash Investing & Financing Activities:
		Noncash Officers Compensation		$960.00	$960.00

See accompanying notes and accountant’s report.

Contracted Services, Inc.

Notes to Financial Statements

March 31, 2007

NOTE A – ORGANIZATION AND NATURE OF BUSINESS

The Company was incorporated June 30, 2000 in the State of Florida. The Company is a computer consulting company and a commercial lawn maintenance company and is located in St. Petersburg, Florida.

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term securities with a maturity of three months or less to be cash equivalents.

Fixed Assets

Property and equipment are stated at cost. Depreciation is computed using accelerated methods over the estimated useful lives of the assets, ranging from five to seven years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the corporation to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Revenue Recognition

The Company generates revenue by providing services in the field of computer consulting and commercial lawn maintenance. The Company recognizes its revenue when consulting services and commercial lawn maintenance have been completed and its customers are billed.

Income Taxes

The Company had previously elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company does not pay federal income taxes on its taxable income and is not allowed a net operating loss carryover or carryback as a deduction. Instead, the stockholders are liable for individual federal income taxes on their respective shares of the Company's taxable income and include their respective shares of the Company's net operating losses in their individual income tax returns. In 2006, the Company began to be taxed under Subchapter C of the Internal Revenue Code. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes

Contracted Services, Inc.

Notes to Financial Statements

March 31, 2007

currently due plus deferred taxes, if and when applicable, related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. Any deferred taxes would represent the future tax return consequences of those differences, which will either be taxable when the assets and liabilities are recovered or settled.

NOTE C – NOTE RECEIVABLE

The Company has a promissory note receivable from a party related by common ownership, Idocubox, in the amount of $20,000.00 dated September 21, 2005. The note is due on September 21, 2008 and interest is payable annually at a rate of 4.68% on any unpaid balance.

NOTE D – NOTES PAYABLE

The Company has a note payable to Ford Motor Credit Company. The note is dated June 20, 2006 in the original amount of $40,586.86 and is payable in monthly installments of $845.43 over five (5) years with a fixed interest rate of 8.99%. The note is secured by a 2007 Ford F-350 vehicle.

Scheduled principal maturities of the note over the next five years are as follows:

Year ending December 31,

2007………………………………………………………….$ 5,329.83

2008………………………………………………………….$ 7,686.87

2009………………………………………………………….$ 8,407.11

2010………………………………………………………….$ 9,194.86

2011………………………………………………………….$ 5,521.98

NOTE E – RENT

The Company is leasing storage facilities on a month to month basis.

NOTE F – EARNINGS PER COMMON SHARE

Earnings (Loss) per common share of ($.03) for the three month period ended were calculated based on a net income (loss) numerator of ($34,898.57) divided by a denominator of 1,355,000 shares of outstanding common stock (Average number of shares issued during the period).

NOTE G – OFFICERS COMPENSATION

The Company recognized contributed noncash officers compensation for one of its officers who provides approximately 16 hours of service per month to the Company.

[Letterhead of Randall N. Drake, C.P.A., P.A.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Contracted Services, Inc.

We have reviewed the accompanying balance sheet of Contracted Services, Inc. as of March 31, 2007 and 2006, and the related statements of operations, stockholders’ equity, and cash flows for the three months ended March 31, 2007 and 2006. These financial statements are the responsibility of the company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.


Randall N. Drake, CPA, PA
Randall N. Drake, CPA, PA

Clearwater, Florida

May 14, 2007

Item 2. Management’s Discussion and Analysis or Plan of Operation.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are an operation company that is seeking to expand its operations. We have an operating history and have generated revenues from our activities that have produced both net incomes and losses. We have yet to undertake any expansion activity. As our company is considered to be in the early stages of business and there is no reasonable likelihood that increased revenues can be derived from our expansion in the foreseeable future, we consider that our operations will require us to retain management personnel that can lead the company in its expansion.

Our Board believes there is substantial doubt that we can expand our business during the next twelve months unless we obtain additional capital to pay for our expansion. This is because we have not generated sufficient profits to cover our expansion. Accordingly, we must raise cash from sources other than our operations. Our only other source for cash at this time is investment by others in the Company. We must raise cash to implement our planned expansion.

Since our business activity is related to many different services that we offer, it is the opinion of management that the most meaningful financial information relates primarily to current liquidity and solvency. As of December 31, 2006, we had working capital of $10,666.21. Despite the commitment of our officers and directors to advance us up to $25,000 during the next twelve months, unless we raise additional funds, we will be faced with a further working capital deficiency by no later than the end of the next twelve months. Our future financial success will be dependent on the success of our expansion. Such expansion may take years to complete and future cash flows, if any, are impossible to predict at this time. The realization value from any expansion which may be done by us is largely dependent on factors beyond our control such as the market for our services, the number of available new customers and sufficien t personnel available to perform work that we obtain.

We recognize that additional capital will be required during the next twelve months. Should we be unable to raise additional capital from other sources, our directors and officers have committed to advance the company up to $25,000 to enable the Company to meet its cash needs over the coming year.

We have equipment to sell, Company owned and not held for resale, however such sale of our capital assets would hurt our ability to perform operations. We are going to buy equipment during the next twelve months. We do not know the extent of the equipment need until we have located additional customers for any of our services.

Operating History; Need for Additional Capital

There is limited historical financial information about us upon which to base an evaluation of our performance as an operating corporation. We have generated both profits and losses and it is this

inconsistency that makes an evaluation of our performance difficult. Further, we offer services in so many different areas that we may not be able to manage all of the various services profitably. We cannot guarantee we will be successful in our expansion activities. Our business is subject to risks inherent in the establishment of an expanding business enterprise, including limited capital resources, possible delays in the generation of revenues from expending additional capital, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we must invest into the expansion of our business before we start hiring a management team. We must obtain equity or debt financing to provide the capital required to fully implement our expansion program.We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to commence, continue, develop or expand. Even if available, equity financing could result in dilution to existing shareholders.

Results of Operations – December 31, 2006

Our financial statements contained herein have been prepared on a Generally Accepted Accounting Principles basis. We incurred a net loss for the period ended December 31, 2006, of ($3,789.14). Our loss from operations was ($15,944.98) which was reduced by a gain of $12,309.84 from the sale of assets. Our gain on the sale of assets was from mowing equipment that the company determined was not being utilized to produce revenue in accordance with the cost of the equipment. The equipment was therefore sold to generate the additional cash and relieve the company of maintaining equipment that was not being utilized. Our income (loss) before income taxes was ($3635.14) and when added to our provision for income taxes of $154 shows our loss of ($3,789.14).

Our cash flow for the period ended December 31, 2006 showed a net decrease in cash of ($8,909.72). We attribute the majority of the cash decrease to an increase in our accounts receivable of over $55,350.51. Our increase in accounts receivable is directly related to the fact that we bill for our services and recognize our revenue immediately upon billing and not upon collection of payment. Our financing activities on Notes Payable of $12,120.32 and our AAA Distributions of $2,000 constituted our only financing payments during the period ended December 31, 2006.

Our revenues for the period ended December 31, 2006 increased approximately $43,724 or approximately 21% from the same period ended December 30, 2005. We attribute this increase to our President being able to devote more time to the computer related business relationships, therefore increasing revenue. Our expenses during this period have increased approximately $5,103 or approximately 2% from the same period in 2005. We have had major increases in our legal and accounting costs (associated with the filing of our registration statement with the Securities and Exchange Commission).

Results of Operations – December 31, 2005

During the first quarter of the Company’s 2005 year, Management and the Board decided to implement actions previously discussed and considered in 2004 - 2005 in order to further

facilitate the Company’s growth and expansion. The Company decided to undertake the activity of providing ancillary computer maintenance/repair services to clients in order to provide additional cash flows. During the fourth quarter of 2005, the Company’s management and Board discussed and decided that, while the expansion of its business into additional lines provided the benefits of diversification and support along with additional revenue streams, it was still not providing sufficient cash flows to facilitate the Company’s principal objective of growth. Accordingly, the Company’s Board and management decided to undertake the filing of an SB-2 Registration Statement with the Securities and Exchange Commission with the intent of registering the Company’s shares of common stock. By registering the existing shares and becoming a fully reporting company, management felt the company could seek t o become an OTCBB company. By raising funds through a private offering management believes that investors would have an appropriate exit strategy. The Board of Directors decided that the company would pursue the sale of shares to family and friends to be registered in a registration statement. The sale of these shares would rely on the exemption provided by the Securities Act of 1933 Section 4(2).

The Company’s operations during the year ended December 31, 2005 reflected the results of the above planning and actions. Revenue consisted of $163,782. This revenue less operating expenses of $214,508 resulted in net loss from operations of ($50,725.66). The company realized a gain on the sale of assets of $71,910.82 offsetting the net income loss and providing for a net income of $21,185 or $0.02 per share.

The major use of cash was for the cost of goods sold; employee leasing; professional fees, mowing expenses and telephone expenses. This outlay was financed principally by the proceeds from the sale of assets. For the year ended December 31, 2005 year, the above activities resulted in a net increase in cash and cash equivalents of $13,247 and a balance of $19,575 of cash and cash equivalents at December 31, 2005.

At December 31, 2005, the Company had fixed assets of $103,766, accumulated depreciation of $59,714 for net fixed assets of $44,052 on its balance sheet. There was an additional amount of paid-in-capital of $750.00 as of December 31, 2005.

In summary, the Board and management believe the Company’s expansion in its shareholder base and its growth into related supporting additional services and revenue streams have strengthened and diversified the Company. Management and the Board also believe the decision to file an SB-2 Registration Statement will provide the Company with the ability to raise additional funds through a private placement, providing potential liquidity for investors by having our stock quoted on the OTCBB.

Trends

We are in the pre-expansion stage, we have not generated any additional revenue we can attribute to our plans for expansion and we see none in the foreseeable future. We are unaware of any known trends, events or uncertainties that have had, or are reasonably likely to have, a material impact on our business or income, either in the long term of short term.

Critical Accounting Policies

Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments. We have presented our financials to give retroactive effect to changes in our capital structure.

The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Our intended expansion activities are dependent upon our ability to obtain financing in the form of debt and/or equity and ultimately to generate future profitable operational activity or income from its investments. We may look to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on reasonable terms.

Item 3. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures

The Company’s management recognizes its responsibility for establishing and maintaining internal control over financial reporting for the Company. After evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of December 31, 2006 (the “Evaluation Date”), the Company’s management has concluded, as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and designed to ensure the information required to be disclosed in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the requisite time periods.

(b) Effectiveness of Internal Control

The Company’s management is reviewing the Company’s internal controls over financial reporting to determine the most suitable recognized control framework. The Company will give great weight and deference to the product of the discussions of the SEC’s Advisory Committee on Smaller Public Companies (the “Advisory Committee”) and the Committee of Sponsoring Organizations' task force entitled Implementing the COSO Control Framework in Smaller Businesses (the “Task Force”). Both the Advisory Committee and the Task Force are expected to provide practical, needed guidance regarding the applicability of Section 404 of the Sarbanes-Oxley Act to small business issuers. The Company's management intends to perform the evaluation required by Section 404 of the Sarbanes-Oxley Act at such time as a framework is

adopted by the Company. For the same reason, the Company's registered accounting firm has not issued an “attestation report” on the Company management’s assessment of internal controls.

After evaluation by the Company’s management, the Company’s management has determined there were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s internal controls subsequent to the Evaluation Date.

Part II. Other Information

Item 1. Legal Proceedings.

NONE

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

NONE

Item 3. Defaults Upon Senior Securities

NONE

Item 4. Submission of Matters to a Vote of Security Holders.

NONE

Item 5. Other Information.

NONE

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

Exhibit Number

Location

and Description

Reference

(a)

Reports of Independent Certified Accountants

Filed Herewith

(b)

Financial Statements

Filed Herewith

(c)

Exhibits required by Item 601, Regulation SB;

(2.0)

Plan of purchase, sale, organization, arrangement

None

liquidation or succession

(3.0)

Articles of Incorporation

(3.1)

Initial Articles of Incorporation filed

See Exhibit Key

with SB-2 Registration Statement

on April 26, 2006

(3.2)

Amendment to Articles of Incorporation

See Exhibit Key

filed with SB-2 Registration Statement

on April 26, 2006

(3.3)

Bylaws filed with SB-2 Registration

See Exhibit Key

Statement on April 26, 2006

(4.0)

Instruments defining the rights of security

None

holders, including indentures

(9.0)

Voting trust agreement

None

(10.0)

Material contracts

None

(11.0)

Statement re: computation of per share

Note C to

earnings

Financial Stmts.

(14.0)

Code of Ethics

See Exhibit Key

(16.0)

Letter on change of certifying accountant

None

(18.0)

Letter on change in accounting principles

None

(20.0)

Other documents or statements to security

None

holders or any document incorporated by

reference

(21.0)

Subsidiaries of small business issuer

None

(22.0)

Published report re: matters submitted to

None

vote of security holders

(23.0)

Consents of experts and counsel

See Exhibit Key

(24.0)

Power of attorney

None

(31.0)

Certificate of Chief Executive Officer

Filed herewith

and Chief Financial Officer

(32.0)

Certification pursuant to 18 U.S.C. § 1350,

Filed herewith

as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

(99.0)

Additional Exhibits

None

(d)

Reports on Form 8-K

None

Exhibit Key

3.1

Incorporated by reference herein to the Company’s Form SB-2