Item 9A. Controls and Procedures
ITEM
9A. CONTROLS AND PROCEDURES
Our
management team, under the supervision and with the participation of our
principal executive officer and our principal financial officer, evaluated
the
effectiveness of the design and operation of our disclosure controls and
procedures as such term is defined under Rule 13a-15(e) promulgated under
the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last
day of the fiscal period covered by this report, May 31, 2008. The term
disclosure controls and procedures means our controls and other procedures
that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act
is
accumulated and communicated to management, including our principal executive
and principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based
on
this evaluation, our principal executive officer and our principal financial
officer concluded that our disclosure controls and procedures were effective
as
of May 31, 2008.
Our
principal executive officer and our principal financial officer, are responsible
for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f).
Management is required to base its assessment of the effectiveness of our
internal control over financial reporting on a suitable, recognized control
framework, such as the framework developed by the Committee of Sponsoring
Organizations (COSO). The COSO framework, published in Internal
Control-Integrated Framework ,
is
known as the COSO Report. Our principal executive officer and our principal
financial officer, have has chosen the COSO framework on which to base its
assessment. Based on this evaluation, our management concluded that our internal
control over financial reporting was effective as of May 31, 2008.
This
annual report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report on Form 10-K.
There
were no changes in our internal control over financial reporting that occurred
during the last quarter of 2008 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting.
O ur
principal executive officer and our principal financial officer, report
was not subject to attestation by the company’s registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission
that
permit the company to provide only management’s report in this annual report.
29
It
should
be noted that any system of controls, however well designed and operated, can
provide only reasonable and not absolute assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of certain events. Because of
these and other inherent limitations of control systems, there can be no
assurance that any design will succeed in achieving its stated goals under
all
potential future conditions, regardless of how remote.
Changes
in Internal Control Over Financial Reporting
During
the fiscal quarter ended May 31, 2008, there were no changes in our internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
ITEM
9B. OTHER INFORMATION
None.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors
and Executive Officer
Mr.
R.
Thomas Kidd as of August 17, 2007 accepted the position of Chief Executive
Officer and a Director of the Company. Information representing Mr.
Kidd
R.
Thomas Kidd
61
Chairman,
President, Chief Executive Officer, and Chief Financial
Officer
The
Chief
Executive Officer of the Company will hold office until additional members
or
officers are duly elected and qualified. The background and principal
occupations of the sole officer and director of the Company is as
follows:
R.
Thomas
Kidd, Chief Executive Officer, of DoMark
Since
August, 2007, R. Thomas Kidd is the President and Chief Executive Officer
of SportsQuest, Inc., a Delaware corporation that creates,
develops, owns and manages high end sports events and related operating
entities. From January 2007 until August 2007, Mr. Kidd was the Chief Executive
Officer of Lextra Management Group, Inc., whose assets were acquired by
SportsQuest, Inc. Prior thereto from July 2005 through
November 2006 he served as the Chief Executive Officer and
Director of Greens Worldwide Incorporated, a publicly
held company, and its subsidiary U.S. Golf Tour,
primarily involved in the development of a new golf organization and
sports enterprise. Prior thereto, from April
1999 through
October
2004, Mr. Kidd served as Chief Executive Officer and President of ASGA,
Inc., and the American Senior Golf Association.
For approximately the past thirty (30) years, Mr. Kidd has been
engaged in various capacities in developing sports organizations including,
among others, two (2) national professional golf tours and one (1) senior golf
tour.
Richard
Altmann
58
Director
30
Rick
Altmann has served as a member of the Board
of Directors of SportsQuest, Inc.
since September 14, 2007. Mr. Altmann has served
as the President of American Lawn keepers since 1996.
COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT 9.A. DIRECTORS AND EXECUTIVE OFFICERS,
PROMOTERS, AND CONTROL PERSONS:
The
Company is aware that all filings of Form 4 and 5 required of Section 16(a)
of
the Exchange Act of Directors, Officers or holders of 10% of the Company's
shares have not been timely and the Company has instituted procedures to ensure
compliance in the future.
ITEM
11. EXECUTIVE COMPENSATION
Name
and Principal Position
Year
Salary ($)
Bonus ($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation-
Ion
($)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation-
ion
($)
Total
($)
R. Thomas
Kidd
2008
2007
-
-
-
-
Chief
Executive Officer
Summary
Compensation Table
The
following table sets forth the cash compensation paid by the Company to its
Chief Executive Officer and to all other executive officers for services
rendered from March 31, 2008 through May 31, 2008. Currently, R. Thomas Kidd
is
the Chairman, Chief Executive Officer, President and Principle Financial
Officer.
2008
SUMMARY COMPENSATION TABLE
2007
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
Option
Awards
Stock
Awards
Number of
Securities
Underlying
Unexercised
Options (#)
Number of
Securities
Underlying
Unexercised
Options (#)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
Option
Exercise
Price ($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
Equity
Incentive
Plan Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested (#)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($)
N
Exercisable
Unexercisable
R.
Thomas Kidd
-
—
—
-
-
—
—
—
—
31
2008
OPTION EXERCISES AND STOCK VESTED TABLE
2008
PENSION BENEFITS TABLE
Name
Plan
Name
Number of
Years
Credited
Service
(#)
Present
Value
of Accumulated
Benefit
($)
Payments During
Last
Fiscal Year
($)
R.
Thomas Kidd
Chief
Executive Officer
—
—
—
—
2008
NONQUALIFIED DEFERRED COMPENSATION TABLE
Name
Executive
Contributions
in Last Fiscal Year
($)
Registrant
Contributions in
Last
Fiscal Year
($)
Aggregate
Earnings
in Last Fiscal
Year
($)
Aggregate
Withdrawals /
Distributions
($)
Aggregate
Balance
at
Last Fiscal
Year-End
($)
R.
Thomas Kidd
Chief
Executive Officer
—
—
-
-
-
2008
DIRECTOR COMPENSATION TABLE
Name
Fees Earned or
Paid in Cash
($)
Stock Awards
($)
Option Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
R. Thomas
Kidd
Chief
Executive Officer
—
—
—
—
—
-
-
2008
ALL OTHER COMPENSATION TABLE
Name
Year
Perquisites
and Other
Personal
Benefits
($)
Tax
Reimbursements
($)
Insurance
Premiums
($)
Company
Contributions
to Retirement and
401(k) Plans
($)
Severance
Payments /
Accruals
($)
Change
in Control
Payments /
Accruals
($)
Total ($)
R.
Thomas Kidd
Chief
Executive Officer
2008
2007
-
¾
¾
¾
¾
—
¾
—
¾
—
¾
-
32
2008
PERQUISITES TABLE
Name
Year
Personal Use of
Company
Car/Parking
Financial Planning/
Legal Fees
Club Dues
Executive
Relocation
Total Perquisites
and
Other Personal
Benefits
R.
Thomas Kidd
Chief
Executive Officer
2008
2007
—
—
—
¾
—
¾
—
¾
—
¾
2008
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
TABLE
Name
Benefit
Before
Change in
Control
Termination
w/o Cause or
for
Good Reason
After Change in
Control
Termination
w/o Cause or
for Good
Reason
Voluntary
Termination
Death
Disability
Change in
Control
R.
Thomas Kidd
Chief
Executive Officer
Basic
salary
-
-
Compensation
of Directors
Mr.
Kidd
is also a member of the board of directors of the Company and is not compensated
for those services.
ITEM
1 2.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The
following table sets forth certain information regarding beneficial ownership
of
the common stock as of May 31, 2008 by (i) each person who is known by the
Company to own beneficially more than 5% of the any classes of outstanding
Stock, (ii) each director of the Company, (iii) each of the Chief
Executive Officers and the two (2) most highly compensated executive
officers who earned in excess of $100,000 for all services in all capacities
(collectively, the “Named Executive Officers”) and (iv) all directors and
executive officers of the Company as a group.
The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose and is
based on 12,397,594 shares
beneficially owned as of May 31, 2008. We believe that each individual or entity
named has sole investment and voting power with respect to the securities
indicated as beneficially owned by them, subject to community property laws,
where applicable, except where otherwise noted. Unless otherwise stated, the
address of each person; 1809 East Broadway # 125, Oviedo, FL 32795.
33
Name
and Address
Shares Owned (1)
Common Stock
R.
Thomas Kidd & Joan Kidd
7,474,050
60.0
%
1809
East Broadway # 125
Oviedo,
Fl 32795
Changes
in Control
We
are
not aware of any arrangements that may result in a change in control of the
Company.
DESCRIPTION
OF SECURITIES
General
Our
authorized capital stock consists of 98,800,000 shares of common stock, par
value $ .0001 and 1,200,000 shares of preferred stock, par value $.0001.
Common
Stock
The
shares of our common stock presently outstanding, and any shares of our common
stock issues upon exercise of stock options and/or warrants, will be fully
paid
and non-assessable. Each holder of common stock is entitled to one vote for
each
share owned on all matters voted upon by shareholders, and a majority vote
is
required for all actions to be taken by shareholders. In the event we liquidate,
dissolve or wind-up our operations, the holders of the common stock are entitled
to share equally and ratably in our assets, if any, remaining after the payment
of all our debts and liabilities and the liquidation preference of any shares
of
preferred stock that may then be outstanding. The common stock has no preemptive
rights, no cumulative voting rights, and no redemption, sinking fund, or
conversion provisions. Since the holders of common stock do not have cumulative
voting rights, holders of more than 50% of the outstanding shares can elect
all
of our Directors, and the holders of the remaining shares by themselves cannot
elect any Directors. Holders of common stock are entitled to receive dividends,
if and when declared by the Board of Directors, out of funds legally available
for such purpose, subject to the dividend and liquidation rights of any
preferred stock that may then be outstanding.
Dividend
Policy
We
have
never declared any cash dividends on our common stock. We currently intend
to
retain future earnings, if any, to finance the expansion of our business. As
a
result, we do not anticipate paying any cash dividends in the foreseeable
future.
34
Options
and Warrants:
As
of May
31, 2008 there were no options or warrants outstanding to acquire shares of
the
Company’s common stock.
Convertible
Securities
At
May
31, 2008 we have no convertible securities of the Company, except those
convertible securities as disclosed outstanding with SportsQuest, Inc.
Amendment
of our Bylaws
Our
bylaws may be adopted, amended or repealed by the affirmative vote of a majority
of our outstanding shares. Subject to applicable law, our bylaws also may be
adopted, amended or repealed by our board of directors.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDPENDENCE.
March
2007, Air Brook Limousine notified us that it had experienced extraordinary
increases in the cost of performing the agreements and advised us of its intent
to cancel the contracts. As part of a settlement of issues, we entered into
an
Agreement and Plan of Reorganization dated March 8, 2007, pursuant to which,
among other things, we agreed that A.B. Park & Fly would be merged with and
into a wholly-owned subsidiary of Air Brook Limousine, wherein the separate
existence of A.B. Park & Fly would cease. In consideration for the
preceding, Air Brook Limousine agreed to deliver to us 150,000 shares of our
common stock, which we canceled as outstanding shares. This merger was completed
on March 15, 2007.
On
February 15, 2008, SportsQuest issued 500,000 of its common shares to a
SportsQuest Director as compensation for a value of $75,000, or $.15 per
share.
On
August
16, 2007, Lextra Management Group, Inc., an event management company, acquired
51.16% of our issued and outstanding common stock pursuant to an Agreement
dated
June 26, 2007 by and among Lextra, our company and certain of our principal
stockholders. Pursuant to the terms of this agreement, at the closing, Lextra
acquired (a) 1,165,397 shares representing 51.16% of the issued and outstanding
shares of our common stock from the selling stockholders for an aggregate
purchase price of $116,500 and (b) an outstanding accounts receivable due to
Air
Brook Limousine by us in the amount of $340,000. At the closing, Air Brook
Limousine cancelled the agreement dated August 10, 1993 under which Air Brook
Limousine stipulated that it would fund our operations for as long as Air Brook
Limousine deemed necessary and as long as it was financially able.
The
Company has chosen to account for the acquisition of its wholly owned
subsidiary, ZCE, Inc., as an unconsolidated investment in the subsidiary as
the
Exchange Agreement and Bring Down and Amendment agreement is in question and
may
be settled or rescinded once the Company determines which course of action
is in
the best interest of the Company and its shareholders during
litigation.
35
Effective
January 1, 2008, the Company entered into a consulting agreement with Rick
Altmann, one of the Company’s directors. The agreement is for a term of five
years. As compensation for services, he will receive a monthly fee of $6000,
payable on the first and 15 th
of each
month for 2008, $7000 per month for 2009, and $8000 per month for 2010 and
thereafter. The Company may pay up to a mutually agreeable amount of fees in
common stock of the Company. The Consultant is responsible for all expenses
that
may be incurred in performing the consulting services, including, but not
limited to, travel, third party expenses, and copying and mailing expenses
unless otherwise pre-approved by the Company. Mr. Altmann also received
500,00 0
shares
of Common stock as compensation for serving as a Director.
On
January 8, 2008, the Company executed an Executive Employment Agreement with
its
President and Chief Executive Officer for a term of five years. The agreement
provides for an annual base salary of $240,000, payable in accordance with
the
Company’s generally applicable payroll practices and policies, but not less
frequently than twice per month in arrears. Annual base salary will increase
10%
per year automatically.
The
Executive is also eligible to receive a bonus from the Company, and to
participate in any of the Company’s bonus plan(s) that may be adopted for the
benefit of executives of the Company. The award of any discretionary bonus
under
this section shall be determined by the Board of Directors of the
Company.
The
Executive is also entitled to receive such stock options as may be granted
to
other executives of the Company as adopted by the Board of Directors. As a
signing bonus, the Company agreed to issue 100,000 shares of Series A
Convertible Preferred shares, convertible at the rate of one share of preferred
for each 500 shares of common stock of the Company, with voting rights as if
converted.
The
Executive has been serving the Company since August 17, 2007 through January
7,
2008. The Company has accrued the sum of $150,000 for the period and agrees
to
pay the accrued amount upon receiving funding in an amount sufficient to pay
the
accrual. The CEO of the Company has forgiven the accrual of unpaid compensation
as of May 31, 2008.
The
Executive and Executive’s dependants are eligible for medical health insurance
and Executive will receive five weeks of paid vacation after one year of
service, seven sick days, six personal days, and six major holidays per year
as
well as any other benefits that are available generally to other executives
of
the Company.
The
Company shall pay or reimburse Executive for all reasonable expenses incurred
or
paid by the Executive in the performance of Executive’s duties.
On
August
16, 2007, 6,800,000 shares were issued for a value of $340,000 in exchange
for
release from debt to the Company’s affiliate.
As
of
October 31, 2007, there was a balance due to Zaring Cioffi Entertainment of
$150,000. Pursuant to the Bring Down and Amendment, the Company would service
the debt of ZCE on a monthly basis until the registration statement was declared
effective by the SEC and the Company had received its third tranche of funding
in the amount of $500,000 under the callable notes dated August 17, 2007. In
addition, the Company has the right of offset for the sum of $20,000 already
advanced to ZCE on August 30, 2007, before the closing.
ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Audit
Fees.
The
aggregate fees billed by Kramer Weisman and Associates LLP for professional
services rendered for the audit of the Company’s annual financial statements for
the period ended May 31, 2008 approximate d
$7,500
and $0.00 respectively. The aggregate fees billed by Kramer Weisman and
Associates LLP for the
review
of the financial statements included in the Company’s Forms 10-Q for the period
ended May 31, 2008 approximated $0.00 per year.
36
Audit-Related
Fees.
The
aggregate fees billed by Kramer Weisman and Associates LLP for assurance and
related services that are reasonably related to the performance of the audit
or
review of the Company’s financial statements for the period ended May 31, 2008,
and that are not disclosed in the paragraph captioned “Audit Fees” above, were
$7,500 and $0, respectively.
Tax
Fees. The
aggregate fees billed by Kramer Weisman and Associates LLP for professional
services rendered for tax compliance, tax advice and tax planning for the period
ended May 31, 2008 were $0.
All
Other Fees.
The
aggregate fees billed Kramer Weisman and Associates LLP for products and
services, other than the services described in the paragraphs “Audit Fees,”
“Audit-Related Fees,” and “Tax Fees” above for the period ended May 31, 2008
approximated $0.00.
PART
IV
ITEM
15. EXHIBITS AND REPORTS.
Exhibits
3.1
Articles
of Incorporation (1)
3.1
Amendments
to Articles of Incorporation – Fourth Article (1)
3.1
Amendment
to Articles of Incorporation – Name Change (1)
14.1
Code
of Ethics (2)
23.1
Consent
of Independent Auditor
31.1
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes
Oxley
Act. (2)
31.2
Certification
of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes
Oxley Act (2)
32.1
Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes
Oxley
Act. (2)
32.2
Certification
of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes
Oxley Act (2)
99.1
Audit
Committee Charter (2)
99.2
Compensations
Committee Charter (2)
___________________________________________________
(1).
Incorporated by reference to the same exhibit filed with the Company’s Annual
Report on Form 10-KSB for the year ending May 31, 2006.
(2)
Filed
herewith
37
ITEM
15: SIGNATURES
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.
Registrant
Date:
September 15, 2008
SportsQuest,
Inc.
By:
/s/ Thomas Kidd
R.
Thomas Kidd
Chairman,
President Chief Executive Officer (Principal
Executive
Officer)
Date:
September 15, 2008
By:
/s/ Thomas Kidd
R.
Thomas Kidd
Principal
Financial Officer
Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has
been
signed below by the following persons on behalf of the registrant and in the
capacities indicated on the 12 th
day of
September 2008.
s/ R. Thomas
Kidd
Pres
Chief Executive Officer, Principal Financial Officer and Director
R.
Thomas Kidd
38