For the transition period from _______________ to _______________

 

Commission file number:  333-140900

 

Federal Sports & Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Nevada		20-4856983
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

c/o Gottbetter & Partners, LLP, 488 Madison Avenue, New York, NY		10022
(Address of principal executive offices)		(Postal Code)

 

Issuer's telephone number:  (212) 400-6900

 

Securities registered under Section 12(b) of the Act:  None                    

 

Securities registered under Section 12(g) of the Act:  None                    

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o    No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes x   No o

 

Indicate by check mark whether the registrant (1) has 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.  Yes x   No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o   No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  See the definitions of the “large accelerated filer,” “accelerate filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one):

 

Large Accelerated Filer o		Accelerated Filer o
Non-Accelerated Filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes x   No o

 

As of March 1, 2010, there were 10,010,000 shares of the registrant's common stock, par value $0.001, issued and outstanding.  Of these, 2,500,000 shares are held by non-affiliates of the registrant.  The market value of securities held by non-affiliates is $322,500, based on the closing price of $0.15 for the registrant’s common stock on May 31, 2009.  Shares of common stock held by each officer and director and by each shareowner affiliated with a director have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of officer or affiliate status is not necessarily a conclusive determination for other purposes.

 

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable.

 

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TABLE OF CONTENTS

Item Number and Caption			Page
Forward-Looking Statements			3
PART I			4
1.	Business		4
2.	Properties		6
3.	Legal Proceedings		6
4.	Submission Of Matters To A Vote Of Security Holders		7
PART II			7
5.	Market For Registrant’s Common Equity, Related Stockholder Matters
	And Issuer Purchases Of Equity Securities		7
6.	Selected Financial Data		9
7.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations		9
8.	Financial Statements and Supplemental Data		10
9.	Changes In And Disagreements With Accountants On Accounting, And
	Financial Disclosure		10
9A.[T]	Controls And Procedures		10
9B.	Other Information		12
PART III			12
10.	Directors, Executive Officers, and Corporate Governance		12
11.	Executive Compensation		14
12.	Security Ownership Of Certain Beneficial Owners And Management
	And Related Stockholder Matters		15
13.	Certain Relationships And Related Transactions and Director Independence		17
14.	Principal Accountant Fees And Services		17
PART IV			18
15.	Exhibits and Financial Statement Schedules		18

 

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FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements.  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.  Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  You should carefully review the risks described in this Annual Report and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”).  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-K to the “Company,” “we,” “us” or “our” are to Federal Sports & Entertainment, Inc.

EXPLANATORY NOTE

This Annual Report on Form 10-K for the year ended November 30, 2009 of Federal Sports & Entertainment, Inc. ("the Company") includes the re-audited financial statements of the Company for the year ended November 30, 2008.  The previously issued financial statements for the fiscal year ending November 30, 2008 were audited by Moore and Associates Chartered, whose registration with the Public Company Accounting Oversight Board was revoked in August of 2009.

 

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PART I

ITEM 1.

BUSINESS

History and General Development of Our Business

We were incorporated in the State of Nevada on May 3, 2006. We intended to engage in the acquisition, exploration and development of mineral deposits and reserves, but we have been unsuccessful in this area. Our consulting geologist, James McLeod, completed the field work required for Phase 1 of our exploration program on the Jeannie 1-4 Mineral Claims in August 2007 and that is the only operations we have engaged in. We have determined that we cannot continue with our business operations as outlined in our original business plan because of a lack of financial results and resources; therefore, although we may return to our intended business operations at a later date, we have redirected our focus towards identifying and pursuing options regarding the development of a new business plan and direction. We intend to explore various business opportunities that have the potential to generate positive revenue, profits and cash flow in order to financially accommodate the costs of being a publicly held company. However, we cannot assure you that there will be any other business opportunities available nor the nature of the business opportunity, nor indication of the financial resources required of any possible business opportunity.

On April 14, 2008, we changed our name to Federal Sports & Entertainment, Inc. in contemplation of the proposed Merger discussed below and increased our authorized capital stock to an aggregate of 310,000,000 shares consisting of 300,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”) and 10,000,000 shares of preferred stock with preferences and rights to be determined by our Board of Directors. Additionally, our Board of Directors approved a forward stock split in the form of a dividend with a record date of April 25, 2008 and effective on May 8, 2008, as a result of which each share of our Common Stock then issued and outstanding converted into two shares of our Common Stock.

We have minimal operating costs and expenses at the present time due to our limited business activities. We will, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses, and we may do so in connection with or in anticipation of possible acquisition transactions. This financing may take the form of additional sales of our equity or debt securities or loans from our sole officer. There is no assurance that additional financing will be available, if required, or on terms favorable to us.

We are not currently engaging in any product research and development and have no plans to do so in the foreseeable future. We have no present plans to purchase or sell any plant or significant equipment. We also have no present plans to add employees although we may do so in the future if we engage in any merger or acquisition transactions.

 

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Material Events

 

Note Offering

On September 9, 2008, we closed an offering of $500,000 principal amount of our 0% Secured Convertible Promissory Notes (the “Investor Note”) to one accredited investor (the “Investor”).  The Investor Note was offered in a private placement (the “Note Offering”) to a limited number of accredited investors and non-U.S. persons pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(2) of, and Rule 506 of Regulation D and Regulation S under, the Securities Act.

We used the $500,000 gross proceeds (net proceeds of $338,838) derived from our issuance of the Investor Note to provide bridge financing (“Bridge Financing”) to Diamond Sports & Entertainment, Inc. (“Diamond Sports” or “FLB”) to assist FLB in meeting its working capital requirements.  The Bridge Financing of $338,838 was evidenced by an Unsecured Bridge Loan Promissory Note from Diamond Sports to us in the amount of $500,000 (the “Bridge Note”).

We and Diamond Sports entered into a term sheet dated December 12, 2007, as amended, pursuant to which it was contemplated that a newly-formed, wholly-owned subsidiary of the Company would merge with and into Diamond Sports (the “Merger”), as a result of which we would acquire all of the issued and outstanding capital stock of Diamond Sports and Diamond Sports would become our wholly-owned subsidiary.  Diamond Sports is a private family entertainment company engaged in the business of professional minor league baseball.

We have determined not to proceed with the Merger and have discontinued discussions with Diamond Sports.

The Investor Note bore no interest and was for a term of 15 months (“Maturity”).  We were to redeem the Investor Note and repay it in full upon the earlier of (i) any financing, merger or acquisition (including the Merger), or any other business combination resulting in cash proceeds to us or to Diamond Sports in excess of the aggregate amount of the Investor Note or (ii) Maturity.  The Investor Note was convertible at the option of the Investor upon closing of the Merger into units (the “Units”), at a conversion price of $1.00 per Unit.  Each Unit was to consist of one share of our Common Stock and one half of one Common Stock purchase warrant, exercisable per whole warrant at a price of $2.00 per share. The shares of Common Stock that would be issued as a result of conversion of the Note (and upon exercise of the related warrants) carried certain registration rights.

Upon closing of the Merger, we were to issue to the Investor for each dollar of principal amount of the Investor Note: warrants to purchase one (1) share of Common Stock exercisable for a period of five (5) years with an initial exercise price equal to $2.00 per share (the “Bridge Warrants”); and one (1) share of Common Stock (the “Bridge Shares”).  In the event of redemption of the Investor Note prior to the Merger, the Investor was to retain the right to receive the Bridge Warrants and the Bridge Shares.  The Bridge Warrants and the Bridge Shares carried “piggyback” registration rights and anti-dilution protection.  The Bridge Warrants provided for cashless exercise in the event the shares of Common Stock underlying the Bridge Warrants were not registered.

 

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The Investor Note was secured by all of the assets of Diamond Sports and its affiliate, Diamond Concessions, LLC. This security interest was subordinated to that of a certain bank providing a pre-existing credit facility to Diamond Sports.  Three of the principal officer/director stockholders of Diamond Sports pledged all of their shares of capital stock of Diamond Sports to the Investor as security for the Registrant’s obligations under the Investor Note.

The Bridge Note was unsecured, was for a term of 15 months from the initial closing of the Bridge Financing, and bore no interest.  All obligations under the Bridge Note were to be deemed repaid in full and canceled upon the closing of the Merger.

If we defaulted under the Investor Note, the full principal amount of the Investor Note at the Investor’s option, was to become immediately due and payable in cash.  In addition, upon an event of default, the Investor Note was to begin to bear interest at a rate of 15% per annum, or such lower maximum amount of interest permitted to be charged under applicable law.

A default by Diamond Sports under the Bridge Note, including but not limited to the failure to repay the Bridge Note and close the Merger prior to the maturity date of the Bridge Note, would cause the full principal amount of the Bridge Note, at the Investor’s option, to become immediately due and payable in cash.  In addition, upon an event of default, the Bridge Note would begin to bear interest at a rate of 15% per annum, or such lower maximum amount of interest permitted to be charged under applicable law, which interest rate would continue until all defaults are cured.

Subsequent Event

 

Effective February 3, 2010, we assigned and delivered the Bridge Note to the Investor in exchange for the Investor returning to us the Investor Note which we have cancelled.  As part of this transaction, the Investor released us from any and all obligations and claims relating to the Investor Note, including the obligation to issue the Bridge Shares or Bridge Warrants.

 

Employees

 

As of March 1, 2010 our only employee is our sole executive officer.

 

ITEM 2.

PROPERTIES

Our only property is related to our legacy business - the For Jeannie mineral property, comprised of 4 contiguous claims totaling 82.6 acres, located on the Okanogan County, Washington State, USA.  We do not rent or own any other property.

ITEM 3.

LEGAL PROCEEDINGS

No legal proceedings are presently pending or threatened.

 

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ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.

 

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our Common Stock is currently listed on the OTC Bulletin Board under the symbol “FEDS.OB”. Prior to May 8, 2008, our stock was listed on the OTC Bulletin Board under the symbol “RTME.OB”.

 

For the period from August 24, 2007 to November 30, 2009, the table sets forth the high and low closing bid prices based upon information obtained from inter-dealer quotations on the OTC Bulletin Board without retail markup, markdown, or commission and may not necessarily represent actual transactions:

 

Quarter Ended		High Bid				Low Bid
February 28, 2008 (1)		$	0.10			$	0.10
March 3, 2008 through May 5, 2008		$	0.51			$	0.10
May 6, 2008 through May 31, 2008 (2)		$	0.15			$	0.15
August  31, 2008		$	0.15			$	0.15
November 30, 2008		$	0.15			$	0.15
February 27, 2009		$	0.15			$	0.15
May 29, 2009		$	0.15			$	0.05
August  31, 2009		$	0.0605			$	0.0605
November 30, 2009		$	0.0605			$	0.0605

 

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(1)	Although our stock was approved for listing on the OTC Bulletin Board on or about July 24, 2007, no trades occurred prior to August 24, 2007.

 

(2)	All information from May 6, 2008 reflects the 2:1 forward stock split.

 

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Our Common Stock is thinly traded and, thus, pricing of our Common Stock does not necessarily represent its fair market value.

 

Holders

 

As of March 1, 2010, we had 10,010,000 shares of our Common Stock issued and outstanding held by five (5) shareholders of record.

 

Securities Authorized For Issuance Under Equity Compensation Plans

 

On April 15, 2008, our Board of Directors and stockholders adopted the 2008 Equity Incentive Plan (the “2008 Plan”) which reserves a total of 2,000,000 shares of Common Stock for issuance under the 2008 Plan. The number of shares of Company Common Stock available for issuance under the 2008 Plan will be increased on the first day of each fiscal year beginning with the 2009 fiscal year, in an amount equal to the least of (i) 1,500,000 shares, (ii) 3% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Board.  If an incentive award granted under the 2008 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2008 Plan. As of the date hereof, we have not granted any awards under the 2008 Plan.

Dividends

We have never declared any cash dividends with respect to our Common Stock.  Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors.  Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our Common Stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our Common Stock.

Recent Sales of Unregistered Securities

As discussed above, on September 9, 2008, we closed the Note Offering of the Investor Note.  The Note Offering was conducted pursuant to the exemption from the registration requirements of the federal securities laws provided by Regulation D and/or Regulation S and Section 4(2) of the Securities Act. The Investor Note was offered and sold only to “accredited investors,” as that term is defined by Rule 501 of Regulation D, and/or to persons who were neither resident in, nor citizens of, the United States. Ten percent commissions on the gross proceeds of the Note Offering were paid to Gottbetter Capital Markets, LLC, a registered broker-dealer.

 

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ITEM 6.

SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.             MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

 

The following discussion and analysis of the Company’s financial condition and results of operations are based on the preparation of our financial statements in accordance with U.S. generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.

 

Results of Operations

Fiscal year Ended November 30, 2009

We are still in our exploration stage and have generated no revenues to date.

 

We incurred total expenses of $65,598 and $97,440 for the years ended November 30, 2009 and 2008, respectively. These expenses consisted of general and administrative expenses incurred in connection with the day to day maintenance of our public company status and the related preparation and filing of our periodic reports.  Accounting and legal fees increased from $13,320 for the fiscal year ended November 30, 2008 to $50,142 for the fiscal year ended November 30, 2009 and office expense decreased from $31,613 to $15,456 over these same periods.  During the 2008 period, we also incurred directors fees’ of $45,100, which represents the estimated fair value of 4,510,000 common shares granted to our sole director for services rendered.

 

Our net loss for years ended November 30, 2009 and 2008 were $65,598 and $97,440, respectively.

 

We have generated no revenues and our net operating loss from inception through November 30, 2009 was $179,039.

 

Liquidity and Capital Resources

Our cash and cash equivalents balance as of November 30, 2009 was $0.00.

 

Note Offering

 

On September 9, 2008 we closed the Note Offering of the Investor Note for gross proceeds to us of $500,000. We used the proceeds of the Note Offering to complete the Bridge Financing to FLB.

 

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On February 3, 2010, as a result of the abandonment of the Company’s planned Merger with Diamond Sports, the Company and the Investor entered into a settlement agreement whereby the note evidencing the Bridge Financing was assigned by the Company to the Investor in full satisfaction of the Investor Note and all obligations thereunder, including the Company’s contingent obligation to issue Bridge Shares and Bridge Warrants to the Investor upon the closing of the Merger.  The Company has no further obligations to the Investor.

Capital Resources

We believe that we will have to raise cash to meet our expenses for the next three  months.  After such time, we will need to raise additional financing for us to continue our limited operations.  This financing may take the form of additional sales of our equity or debt securities or loans from our sole officer or principal stockholders.  We have not made any decisions with respect to such financing.  There can be no assurance that we will be successful in obtaining additional funding in amounts or on terms acceptable to us, if at all.  If we are unable to raise funding as necessary, we may not be able to proceed with our business plan.

Our auditors have issued an opinion that raises substantial doubt about our ability to continue as a going concern for the next 12 months given our current financial position.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

Our audited financial statements are included beginning immediately following the signature page to this report.  See Item 15 for a list of the financial statements included herein.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.[T]

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act of 1934 (the “Exchange Act”) is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.  Under the supervision and with the participation of our management, including our Chief Executive Officer and interim Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

 

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Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  Under the supervision and with the participation of our senior management, consisting of David Rector, our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our chief executive and chief financial officer concluded, as of the Evaluation Date, that our disclosure controls and procedures were not effective because of the identification of what might be deemed a material weakness in our internal control over financial reporting which is identified below.

 

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.  In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.  Based on this evaluation, our sole officer concluded that, during the period covered by this annual report, our internal controls over financial reporting were not operating effectively. Management did not identify any material weaknesses in our internal control over financial reporting as of November 30, 2009; however, it has identified the following deficiencies that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of that date:

1.

We do not have an audit committee. While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

2.

We did not maintain proper segregation of duties for the preparation of our financial statements. We currently only have one officer overseeing all transactions. This has resulted in several deficiencies including the lack of control over preparation of financial statements, and proper application of accounting policies:

This annual report 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 SEC that permit us to provide only management’s report in this annual report

 

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Officers’ Certifications

Appearing as exhibits to this Annual Report are “Certifications” of our Chief Executive Officer and Chief Financial Officer.  The Certifications are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”).  This section of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification.  This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the year ended November 30, 2009 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Executive Officers and Directors

 

Below are the names and certain information regarding the Company’s current executive officers and directors:

 

Name		Age		Title		Date First Appointed
David Rector		62		Chief Executive Officer, Principal Financial Officer, President, Secretary, Treasurer and Director		September 30, 2008

 

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.

 

Currently, except for the $500 per month payment being made to Mr. Rector for his services to us as officer and director, directors are not compensated for their services, although their expenses in attending meetings may be reimbursed. Officers are elected by the Board of Directors and serve until their successors are appointed by the Board of Directors. Biographical resumes of each officer and director are set forth below.

 

Certain biographical information of our directors and officers is set forth below.

 

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ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

 

·

each person or entity known by us to be the beneficial owner of more than 5% of our common stock;

·

each of our directors;

·

each of our executive officers; and

·

all of our directors and executive officers as a group.

 

(1)

Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of March 1, 2010 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.

(2)	Percentage based upon 10,010,000 shares of common stock outstanding as of March 1, 2010.

 

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

 

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

 

(1)

“Audit fees” consists of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2)	“Audit-related fees” consists of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3)	“Tax fees” consists of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4)	“All other fees” consists of fees billed for all other services.

 

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

 

(1)	Filed with the SEC on April 18, 2008 as an exhibit, numbered as indicated above, to the Registrant’s current report (SEC File No. 333-140900) on Form 8-K, which exhibit is incorporated herein by reference.

(2)	Filed with the SEC on February 27, 2007 as an exhibit, numbered as indicated above, to the Registrant’s registration statement on Form SB-2 (SEC File No. 333-141480), which exhibit is incorporated herein by reference.

 

(3)	Filed with the SEC on September 15, 2008 as an exhibit, numbered as indicated above, to the Registrant’s current report (SEC File No. 333-140900) on Form 8-K, which exhibit is incorporated herein by reference.

 

(4)	Filed with the SEC on March 3, 2009 as an exhibit, numbered as indicated above, to the Registrant’s annual report (SEC File No. 333-140900) on Form 10-K for the fiscal year ended November 30, 2008, which exhibit is incorporated herein by reference.