Table
of Contents
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-12G
GENERAL
FORM FOR REGISTRATION OF SECURITIES
Pursuant
to Section 12(b) or (g) of the Securities Exchange Act of 1934
Commission file
number: 033-09218
SPORTSQUEST,
INC.
| DELAWARE |
20-4742564 |
| State or other jurisdiction of |
(I.R.S. Employer |
| incorporation or organization |
Identification No.) |
| |
|
| 500 Australian Avenue, Suite
600, West Palm Beach, Florida |
33401 |
| (Address of principal executive offices) |
(Zip Code) |
Registrant’s
telephone number, including area code: 954-837-6833
Securities
registered pursuant to Section 12(b) of the Act: NONE
Securities
registered pursuant to section 12(g) of the Act:
COMMON STOCK, $0.001
PAR VALUE
(Title of class)
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company, ”and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer |
☐ |
Accelerated filer |
☐ |
| Non-accelerated
filer |
☒ |
Smaller reporting company |
☒ |
| |
|
Emerging growth company |
☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
SportsQuest Inc., a Delaware
corporation, is filing this registration statement on Form 10 (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to provide
current public information to the investment community in anticipation of being required to register under Section 12(g) of the Exchange
Act in the future, to comply with applicable requirements thereunder.
This Registration Statement does not constitute
an offer of securities of SportsQuest, Inc. or any other entity. Once this Registration Statement has been deemed effective, we will be
subject to the requirements of Section 13(a) of the Exchange Act, including the rules and regulations promulgated thereunder, which will
require us, among other things, to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K,
and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements
pursuant to Section 12(g) of the Exchange Act.
TABLE OF CONTENTS
PART
I
Introduction:
The new management of the company is filing this multi-year
form 10-K under Section 1320.4 of SEC Financial Reporting Manual outlining Delinquent Filers Program. For the entire two year period of
this multiyear form 10-K, the company qualified as an Inactive Registrant as per Section 1320.2 of SEC Financial Reporting Manual and
is therefore not required to file audited financial statements.
Also, for the same entire period of this 10-K, the company
essentially existed as a non-Shell Company which had assets, expenses and material operations.
Finally, the new management of the company has prepared these
statements from information and explanations made available from previous management. However, much of the required information is unknown
and not reasonably available to new management because obtaining the information would involve unreasonable effort and expense. (See
REASONS FOR FILING DELINQUENCIES below)
OVERVIEW OF DELINQUENT FILINGS
Before this filing, the company is not current in its SEC
reporting requirements as follows:
| 1. | 10-Q for the quarter ending November 30, 2008 |
| 2. | 10-Q for the quarter ending February 28, 2009 |
| 3. | 10-K for the fiscal year ending May 31, 2009 |
| 4. | 10-Q for the quarter ending August 31, 2009 |
| 5. | 10-Q for the quarter ending November 30, 2009 |
| 6. | 10-Q for the quarter ending February 28, 2010 |
| 7. | 10-K for the fiscal year ending May 31, 2010 |
| 8. | 10-Q for the quarter ending August 31, 2010 |
| 9. | 10-Q for the quarter ending November 30, 2010 |
| 10. | 10-Q for the quarter ending February 28, 2011 |
Annual Filings are completed and up to date on OTC Markets.
REASONS FOR FILING DELINQUENCIES
The existing management and majority shareholders first
acquired control of the company in June 2021. The previous management of the company, when filing form 15-15D on April 13, 2011, subsequently
activated an ongoing SEC filing obligation, pursuant to federal securities laws for the periods above. Unfortunately, prior to filing
said Form 15-15D, the management of the day incorrectly filed disclosures under OTC Markets subsequently ceasing all business reporting
including all mandatory filings, communications and correspondence with regulatory agencies, including the company Stock Transfer Agent.
The new management accessed previous accounting records and re-created the disclosures and supplied the OTC Market alternative reporting
requirements.
PLAN OF ACTION TO REMEDY DEFICIENCIES
In addition to this multi-year form 10-K, the new management
will be submitting to SEC via Edgar filing system, within two business days from the date of this filing (ie: on or before end of business
on August 30, 2023), a Form 8-A with the required disclosures will be filed to cure the existing delinquencies.
Item 1. Business.
The franchise industry is booming, and one
of its best-kept secrets is franchise consulting. SportsQuest intends to franchise consulting systems, infrastructure and services to
individuals who will become Franchise Consultant Professionals and subsequently utilize the SportsQuest’s expertise to assist their
clients in identifying the franchise opportunity which provides them with the best opportunity for long term success. As a Franchise Consultant
Professional we counsel people who are considering franchise ownership. By definition, a franchise is an exchange of the rights and licenses
of a business for a fee. With this business consultant role, we look at a prospective candidate’s background, financial situation,
goals, and more. Many Franchise Consultants are part of a franchise consulting company such as BAI. As a member of a franchise consulting
company, we work with industry clients to help prospective candidates identify the best fit franchise based on the potential franchisees
needs, lifestyle, personality, and financial situation assuring they invest in the most ideal franchise for them.
With the candidate’s best interests
in mind, Franchise Consultants guide candidates through the franchise selection, evaluation, and buying process. Once a candidate decides
on a brand, a franchise business consultant may also assist in acquiring the necessary capital to own and operate the business.
A Franchise Consultant is also thought of
as a matchmaker who connects hopeful entrepreneurs with franchise opportunities. Once people find out about Franchise Consultant opportunities
and why people use Franchise Consultants, they want to hear more. The franchise consultant acts as a broker/buffer between the franchisor
and the potential franchisee at the introductory stage and further as required.
Most people in the industry know that Franchise
Consultants have been vital in the industry’s growth. They also recognize the flexibility and freedom with a consultant role. A
career as a Certified Franchise Consultant is like no other. As a franchise business consultant, you have an incredible work-life balance
and the opportunity to help others with tremendous income potential.
A franchise business consultant from a candidate’s
perspective is a trusted advisor, counselor, educator, and guide. Franchise Consultants start by assessing the most crucial issue—determining
if franchise ownership is even the right path for the candidate. If it is, then through multiple conversations and other methods such
as questionnaires, the role of a business consultant is to narrow down several opportunities to explore. Good Franchise Consultants will
work alongside their candidates until they have found the right opportunity and have a signed contract (franchise agreement) with a franchisor.
The best Franchise Consultants, always keep in touch with the people they placed in business to find out about the experience with the
brand. This not only helps consultants identify other candidates who might be a good fit but also those franchisors who may no longer
be ideal franchisors.
Franchise consulting is one part counseling
and one part artistry. The franchise business consultant must be an active listener to best serve the candidate. The consultant's role
involves understanding a candidate’s background, interests, and desired lifestyle and then translate it into an ideal franchise
opportunity. Sometimes a Certified Franchise Consultant understands more about what his candidate wants than the candidate even does.
Above all, a Franchise Consultant must consider what’s best for the candidate.
Company mission statement
Our mission is geared to help clients structure a franchise strategy
based on the uniqueness of their situation and what they find most compelling as to brand, culture and operating models in order to attain
their goals.
Company
philosophy and vision
a.
Our corporate philosophy is based on providing entrepreneurs with honesty, integrity, value, innovation, comparables, and to be
the buffer they need so that they can make a decision on what is best for them rather than the franchisor thus eliminating the high pressure
tactics used by some franchisors.
b.
Our Vision is to establish ourselves as the go to franchise consultants for honest information and resources required for
entrepreneurs to make an educated decision on what is best for them in the end.
Company goals
Our goals and milestones involve in connecting one to three entrepreneurs
with a franchisor that best suits them per month as we grow our franchise consultant business from Florida to other States. In addition
to this once we are established strongly in Florida and move to other States we will continue to expand our business by adding additional
personnel on a per State basis.
Target
market
Our target market are entrepreneurs that wish to start a franchise,
business minded individuals that look for franchises to be their own boss with the guidance of a franchisor, young university graduates
that may have saved some money or have been given some money from their parents to start a franchise or business, retired people that
feel they need additional cash flows to sustain a certain lifestyle, and business minded individuals that have been given the golden parachute
and are looking to start a business of their own.
Industry
As franchise consultants we
have the experience and knowledge to help entrepreneurs find the business that fits what they want to achieve. We will walk them through
what being a franchise owner really means, and we will help them cut through any red tape they may face along the way. Once
we determine their capabilities and the orientation that fits their lifestyle, the next leg of their journey is exploring the industry.
With over 3,000+ registered franchise companies available in the marketplace, determining the right one can certainly seem like an intimidating
task.
Working with us as their guide potential franchisees will understand
what to look for in evaluating their options and making what could be a difficult process much more manageable. Working together, we will
determine the best ways to articulate their interests and how they would mesh with potential franchises.
The final part of our journey together gives them a chance to dive
further into franchises that we end up picking as their finalists. We will then determine which one is their best choice by interacting
with a multitude of industry experts from legal advisors, financial advisors, other franchisees, the franchisor, and even the competition.
With the economic uncertainty that exists ,as a result of damages done
to various industry sectors, due to the recent pandemic and other attributing factors people are looking for strong business models. The
economic downturn triggered over spending, and inflation forcing many entrepreneurs to either lose their job or lose their business. In
addition to this some entrepreneurs in trying to save their business even their savings forced them to rethink their strategy into finding
a business that can provide them with a strong and resilient industry that they may be qualified for and most of the time it's these surviving
franchises that they turn to.
Our competitive edge will rely on staying on top of the latest changes
and new potential franchisors in the industry by constantly researching and reading the latest events that can potentially affect one
franchise over the other. Providing optimum support for our prospects and providing them with timely information, so that they can make
educated decisions. In addition to this, we will put the prospects interest first, as a happy customer will generate more leads for us
in the form of future referrals.
Legal structure
The business is an established Delaware Corp .
The startup capital is invested by initial shareholders of a RegD offering in the account opened with Wells Fargo for Sports Quest Inc.
Technology & Services Technology
In summary, Franchise Brokerage, Lead
Generation and Match Making utilizing AI selective services .
Our unique technology is what sets us apart from the competition. Our
portal works as a closed loop network of over 350 franchisors who have signed up to be represented in a relationship similar to that of
a real estate transaction of a homeowner and a real estate broker. By that we mean that SPQS agents and representatives can represent
the franchisor and the purchaser of the business simultaneously or separately and earn a favorable commission which is split between us
and the BAI marketing company on a sliding scale starting at 90% up to 95%. We retain 95%. The average commission we will earn on a franchise
sale is well north of $20,000 per sale.
Lead Generation.
The portal is designed to be user friendly and integrates with almost
all leading customer service or CSR type of utility tools offered by companies such as Salesforce, Pipedrive, and similar suppliers. By
lead generation we mean where the franchisor will advertise his company and his concept on the portal. Typically, they receive a tile
type advertising with their company logo which once clicked by the end user spawns a landing page with detailed description of the franchise.
The end user is given the opportunity to complete their contact information. This lead is prepopulated in the CSR back office back engine
so that the salesperson can follow up on the lead and convert it to a sale. There are many lead providers that offer this exact same service
such as franchisegator.com, franchise.com, entrepreneur.com, and others. Typical monthly advertising costs range between $400 per month
to over $2000 per month. The average portal has virtual real estate of approximately 100 tiles on their portal. In addition to the tile
advertising these portals also offer banner advertising under stitch advertising where the advertising or landing page lands or displays
after you leave the web page, favorable positioning throughout the portal cookie tracking and other technologies. These auxiliary services
are in high demand and are reserved for up to 6 to 10 advertisers per month and range in price between $5500 to $15,000 per month.
The uniqueness of our company is that we provide both lead generation
as well as full-service brokerage services. This is an ideal situation and set up for those franchisors with a weak sales force or for
those that do not farewell with introduction of their business to new operators. The franchisors that do not fare well are usually as
a result of lack of funding or lack of resources to hire a good sales team. We provide both a virtual sales team and a robust advertising
portal.
Portal is the key:
ieFranchise.com portal is the key and the secret sauce. We have affiliations
and established relationships with over 350 Nationwide franchisors we can represent. Without the portal the company is nothing more than
a franchise broker with a static web page. Basically, another static type web site with no relationship back office for support and after
sale service. Portal provides a complete turnkey solution for the enterprise. The portal is highly customizable built on a WordPress platform
which is well received and in compliance with many search engines such as: Google, Yahoo, and others. In addition, the portal offers many
plug and play features which allow the end user and the franchisor to have the best user experience thus providing the optimal return
on their time or money spent in the portal. ieFranchise.com is a tier1 domain meaning it has been in constant use for trade and commerce
for over 20 years.
Artificial Intelligence (AI) (under
development)
One of the biggest challenges of any franchisor is selecting a suitable
franchisee to operate their business in a manner as described by the franchisor. Many franchisors spend enormous amounts of money on personality
straights tests such as Moyer Briggs entrepreneur select and others. Some of these compatibility tests cost the franchisors anywhere between
$10 for a simple topography compatibility test up to several thousand dollars depending on the complexity and scope of the test they wish
to conduct. With the portal we can provide algorithms and selection processes including those basic topography type overtures which benefit
the franchisor in having artificial intelligence deployed in the selection process to assist them in selecting the best qualified candidate.
Right now, our AI program is under development, however it will use all of the aforementioned attributes and deploy them in the system
for the franchise selection.
Services
Sports Quest, provides potential prospects with the ability to connect
with franchises on a consultative basis taking the edge off of the strong sales tactics from franchisors and looking at the best interest
of the prospect looking to purchase a franchise.
Service solves
Our close association with the latest updates on all franchises/franchisors
as well and resources for our prospects utilizing an unbiased approach, will ensure that we find the most suitable business opportunity
for our prospects.
Competitive advantage
Due to the fact that we come from a franchise background and sold over
300 franchises we have experience on what franchisors look for in franchisees and the importance of franchisors to find a mutually fitting
franchisee. We also have available artificial intelligence software that we are in the process of developing for the purpose of qualifying
not only employees but also potential franchisees so that we can find the best matching franchise opportunity for them.
Service Pricing
We do not charge the potential franchisee for our consultant services
we charge the franchisor anywhere between 25- 50% of the franchise fee. In some cases based on the franchisor we can charge 100% of the
franchise fee based on the franchisor as they prefer to primarily live off of the recurring royalties. We have over 350 franchisors we
represent with pre-determined already agreed upon fees.
Market research
Primary market: Services will be marketed in various social
media portal, blogs, press releases, newsletters, franchise portals, our website, YouTube, and via social events where we will be presenting
our business card containing a bar code people can scan.
Secondary market research: registering with BBB (Better business
Bureau), Chamber of Commerce, attending Franchise Shows and handing out our business cards, may be worth having a booth at the franchise
show, AFA(American Franchise Association), IFA (International Franchise Association), Franchise journal publication, The Great American
Franchise Expo, Franchise times, Franchise Business Review and a blog that discusses franchise news such as Blue MauMau. In addition to
this we will network by attending various events on EventBrite and other such networking events as they arise.
In accordance with the International Franchise Association the “The
overall number of franchise establishments will increase by almost 15,000 units in 2023, or 1.9%, to 805,000 units in the U.S. Franchising
will add approximately 254,000 jobs in 2023. Growing at 3.0%, total franchise employment is forecasted to reach 8.7 million.
The total output of franchised businesses — the measure of total
economic activity in nominal dollars — will increase by 4.2% to $860.1 billion in 2023, up from $825.4 billion in 2022.
Franchises’ GDP share of the overall economy will remain stable
at 3%. Compared with 2022, franchises’ GDP — the monetary value of all the finished goods and services produced within U.S.
borders — will grow at a slightly slower pace of 4.2% to $521.3 billion.
Service-based industries and quick-service restaurants will witness
higher growth than other industries. On the state and regional level, the report shows that states have experienced different rates of
franchise business growth due to disparities in business climates, migration trends, the labor market, and major industry investments.
On the state level, it is predicted that:
States in the Southeast and Southwest will experience the fastest
franchise business growth in 2023.
The top 10 states for franchise growth in 2023 are projected to be:
Texas, Illinois, Florida, Georgia, Tennessee, North Carolina, South Carolina, Arizona, Colorado, and Indiana.
The Southeast region, which has the largest franchise concentration
in the U.S., will have an estimated 234,079 total establishments by 2023, employing 2.5 million workers and contributing $250 billion
in output to the U.S. economy.” This industry trend will create demand for franchise consultants as people scramble to find the
most suitable franchise to purchase.
| |
● |
High marketing costs: In this era of social media and AI our approach to reaching audiences will need to acknowledge that we will need
to pierce the saturated market with creative ideas and short message that add value to our approach to purchasing a franchise utilizing
a buffer consultative approach that eliminates the high pressure tactics of direct sales keeping the prospects needs in mind first and
foremost. |
| |
|
|
| |
● |
Brand recognition challenges - ieFranchise is a brand that has been around for a long time, but we need
to fill a gap that existed from 2009 where it was merely an advertising portal for franchises. Currently the portal has undergone
extensive work to facilitate not only the lead generation but the consultative services we provide. |
| |
|
|
| |
● |
Finding qualified employees: Florida is known as having many transient employees so we will need to qualify them and thoroughly
run criminal checks and various other personality test to ensure they fit our corporate culture. |
Threats and opportunities
| |
● |
Changes in government regulations: Currently there are no licenses required to run this business but with changes in government
legislations on the running of franchise consultant business we may be faced with the need to apply for a license to run the business.
In the event that we need to apply for a license this may delay the continuance of the business until business license is issued. |
| |
|
|
| |
● |
Changes in the economy: Economic changes that affect the value of the currency or the uncertainty of how inflation and currency
changes may affect people finances may slow down the process of getting into any business with people delaying purchases due to skepticism
on which way to invest money. |
SWOT Analysis
| |
Strengths |
Weaknesses |
Opportunities |
Threats |
|
Product/ Service Offering |
Great sales and consultative experience |
Competition |
Knowledge and Experience in the Franchise Industry |
New Regulations
Changes in the Economy |
|
Brand/ Marketing |
Have strong marketing SEO able to dedicate time on social media |
New brand will need time to expose brand online |
We can collect our own leads from the portal we have developed |
SEO does not work out and we need to find someone new |
|
Staff/HR |
Experienced SEO to carry out task |
Saturated market required more money poured into marketing |
Have strong administrative and sales staff |
Transient staff in Florida |
|
Finance |
Funds readily available for promotion and marketing |
Discovering which marketing channels work best and which don’t
prior to singling out a strategy that works best |
Well connected with resources for expanding the business into other
States when the time comes |
Economic bankruptcy or new currency adjustments |
|
Operations/
Management |
Strong management and Operations experience in the Franchise Industry |
Illness prevents management from continuing to run the operations |
Strong experience in training staff on all aspects of the business |
Not finding the right management in other States may jeopardize the success of absentee ownership if Key Performance Indicators are not managed properly |
| Market |
People looking to start their own business in the franchise industry is expected to increase in 2023 |
If dollar gets devalued the amount of money people will have can jeopardize the ability to invest |
Layoffs due to inflation or economic uncertainty have people seeking a way to make money by starting their own business |
Economic downturn creating uncertainty in investments of any kind |
Using our strength to combat the potential weaknesses and threats that may arise
People are the key in successful companies and Sports Quest is starting with very experienced staff in management, operations, administration, sales, and marketing. All staff have many years of experience in the franchise industry and general marketing. When dealing with a saturated market of Consultants we know that customer service and prompt responses are crucial. Cross training staff in all aspects of the business can alleviate any need for covering for those employees that are ill thus preventing any gaps in the business which could lead to lost opportunities. It is of the utmost importance that we set up key performance indicators (KPI) to evaluate staff within the State of Florida and after expansion into other States. In addition to this it is important to stay on top of all new rules for franchise by subscribing to journals and reading latest government or States Laws that may affect the day to day operations of the business.
Short term goals
The short term goals for the business is to ensure that our source of lead generation is working without any glitches, that staff gets cross trained by creating Standard Operating Procedure Manual that they can refer to if and when needed, lastly that KPIs (Key Performance Indicators) are established .
Long term goals
The long term goals for SPQS. is to focus on developing opportunities for people in Florida then grow our business into other States. Developing a strong Customer Relationship Management tool that allows us to manage staff and cater to their needs by providing them with all the necessary resources they need to succeed.
Service features and benefits
Franchise Consulting service will be provided without any charge to
the end-user by SportsQuest. It is only after the sale is made by the franchisor will the 25-100% of the franchise fee be received by
the franchise consultant. This methodology proves to have no pressure tactic for the potential franchisee or end-user. As franchise consultants
we ensure that the franchisee or the potential franchisee receives valuable information and support without the direct pressure tactics
some franchisors utilize to close the sale. Moreover, the support provided by the franchise consultant continues until the end-user becomes
a franchisee. The best part is that as franchise consultants we do not favor one franchisor over another, as we work with the potential
franchisee by finding out exactly what their needs are, based on their lifestyle and financial capability. As one can see there are numerous
benefits to working with a franchise consultant versus going directly to a franchisor.
The secondary service provided by SportsQuest is selling unused or
excess leads to franchisors similar to franchise portals such as franchisegator.com
Our third revenue source is from speaking to potential private businesses
that wish to franchise their business. The president of the company was able to franchise his own private business and grow it into 300
plus locations prior to selling the opportunity creating an exit strategy for the business.
The fourth revenue source comes from the Presidents many years in the
mergers and acquisitions business and his ability to take private companies public should the need arise for them to raise funds in the
public markets or need that exit strategy most companies can benefit from.
The fifth revenue source comes from referrals we provide to potential
franchisees for funding and or legal advice.
Target customer
| Target Customer |
Demographic profile |
| 1. Entrepreneur |
This includes people: that have been given the golden parachute, looking to purchase a franchise, people looking to start their own business and be their own boss |
| 2. Franchisor |
This includes franchisors: that need fresh quality leads that are qualified |
| 3. Independent business owners |
This includes: establish business owners looking to expand their business |
| 4. Franchisors/ independent business owners |
This includes: business owners that wish to take their company public, merge, and acquire another business or go public all strategies allow for these companies to have an exit strategy and/or raise additional capital for the growth or marketing needs for instance. |
Target Market Specifics
| College |
Candidates |
| Age |
25 to 60 |
| Gender |
Not Relevant |
| Location |
Starting in Florida |
| Income |
Not Relevant |
| Occupation |
Not Relevant |
| |
|
| Education Level |
High School with Business experience or higher |
| Industry |
Not Relevant |
| Size |
Not Relevant |
| Stage in Business |
Growing or mature business with some qualifying startups |
| Annual Sales |
Not Relevant |
Key competitors
The Leading Players involved
in the global Franchise Consulting market are:
| Competitor |
How they differ |
How we differ |
Benefits we
have |
| Franchise Direct |
Franchise advertising portal |
We advertise on our portal as well for franchise opportunities |
However we focus on utilizing a consultative approach based
on the needs of the prospect and not on the wants, by educating prospects on the realities of owning one franchise over another that
suits their lifestyle. |
| FranNet |
Use a consultative approach with training of their
franchise consultants |
Training provided is 5 weeks |
Communication software provided is superior. The Training
is less but company looks for experienced entrepreneurs. |
| The Entrepreneur’s
Source |
Coach potential franchise consultants |
Base selection on already experienced franchisees or franchisors |
Although training is great being in the trenches and having
the experience is fundamental to success. |
| Franchise America |
More of an advertising portal |
Our focus is not only to advertise but to provide most
relevant information on the franchisor based on prospect needs |
The alliance we have with BAI allows us to provide potential
prospects with the most accurate information on the franchisor/franchise |
| iFranchise Group |
Focus on assisting existing franchisors/franchisees |
Focus on assisting people looking to purchase a franchise |
We are in constant contact with franchisors so we are able
to pass the changes occurring in the franchise to our prospects for their benefit and selection |
| FranChoice |
Utilize a consultative approach with prospect |
Not much different than our system |
We are able to provide franchisors with various funding
strategies should the need arise benefiting the franchisee indirectly |
| Sunbelt Business Brokers |
Asssist in purchasing various businesses that are not necessarily
franchise specific |
Focus on franchises only and vetted businesses |
Having the inside scoop of business that have to file a
FDD makes the opportunity much safer for the potential prospect |
| FranServe |
Provide annual conferences for networking |
Provides lead support , great CRM and weekly newsletters
that can be used for educational purposes and to provide any potential candidates |
Funding partners support and Franchise lawyer
support available. |
| The Franchise Maker |
Teach how to franchise your private business |
Liaison between the franchisor and franchisee to find best
fitting opportunity for the potential franchisee |
We have two actively participating candidates that either
are in business or is looking to be in business making the process much easier as we utilize all the provided tools to find the best
fitting franchise for the potential candidates |
| The Franchise Consulting
Company |
Great resource of information but too much diversification
on the website can spread the services too wide and defocus customers |
Our key components on our website focuses on consulting
services and lead generation |
From experience if one places too many services on a
website this can lead to defocusing of customers and loss of potential customers. |
Positioning/Niche
Expertise
Based on years of experience in the consultancy and sales side of the
business and dealing with entrepreneurs we bring years of experience in the field of franchising, marketing, mergers and acquisitions.
We stay on top of the various changing laws in the industry by subscribing to legitimate government websites and utilizing lawyers we
have known in the industry for a long time for advice. Our skills and experience have been developed over years. We are not new in this
business and so we are very confident that we can succeed.
Competition
There are several competitors in the franchise consultant business
but not all have the number of years and experience we bring to the table. Others have a lack of expertise in 2 or 3 of the areas we excel
in such as producing various exit strategies and the development of artificial intelligence software primarily utilized to qualify potential
franchisees thus placing us in an advantageous position.
Change Rate and Product Life Cycle
Some employers may choose to hire an employee to provide consultancy
to the president of the company, but finding an ideal consultant that is well rounded with years of experience and no pay is next to impossible.
As consultants we only get paid when we align the entrepreneur with the ideal franchisor.
Predictability and Complexity
If an entrepreneur decides to talk to one of our competitors after
talking to us they may soon find out that they provide no exit strategy, something that is crucial to every business. As consultants we
can find a perfectly matching franchisor, take the private company public, find them a mergers and acquisition candidate or help them
find their own way of franchising their business.
Reputation, Word of Mouth and Referrals
As President of various other companies Irina V has developed a reputation
as a person with integrity and knowledgeable in various industries working as consultant to both public and private companies. Irina's
vast knowledge in the industry has made her a guru and the go-to person in dealing with both private and public companies.
Barriers to Entry
It takes years of experience and research to gain the knowledge that
Sports Quest Presidents has gained over the years this is not easy to replicate nor to cover that much knowledge in a short time.
Target Market
Our target market is entrepreneurs looking for a new business opportunity,
an exit strategy, and alternatives to working for someone else because they wish to be their own boss . Individuals either out of University
where parents are able to provide assistance until they get started, individuals that have been in business for a while, but are looking
for a change, individuals that would like to franchise their business, individuals seeking a solution for an exit strategy . Women looking
to add revenue to the household by starting a business, and veterans looking to start a business are ideal candidates.
Service Advertising and Marketing
| | Advertising: |
| ● | Online |
| ● | Print |
| ● | Radio |
| ● | Cable television |
| | Marketing may include: |
| ● | Business website |
| ● | Social media marketing |
| ● | Email marketing |
| ● | Mobile marketing |
| ● | Search engine optimization |
| ● | Content marketing |
| ● | Print marketing materials (brochures, flyers, business cards) |
| ● | Public relations |
| ● | Trade shows |
| ● | Networking |
| ● | Word-of-mouth |
| ● | Referrals |
| | Promotional budget |
| | ● | Before startup : $8,000 |
| ● | On an ongoing basis : $10,000 |
| Marketing Expenses Strategy Chart |
Target Market 1
Leads |
Target Market 2
Entrepreneurs |
Target Market 3
Franchisors |
One-Time
Expenses |
Website development
$5,000 |
Website development
$5,000 |
Website development
$5,000 |
| Monthly or Annual Expenses |
SEO
$4,000/mo. |
SEM
$4,000/mo. |
GOOGLE Marketing
$3,000/mo. |
| Labor Costs |
Lead caller
$3,000/mo. |
Consultant
Commission based on sales |
Marketing Sales Consultant
$ 2,500/mo. |
Item 1A. Risk Factors.
The SEC requires the company to identify risks
that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in
its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic
events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently
riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.
Summary of Risk Factors
Risks related to our business and industry
| | ● | Our
success depends substantially on the value of our brand, which could be materially and adversely
affected by the high level of competition in the industry, our ability to anticipate and
satisfy consumer preferences, shifting views of franchising and our ability to obtain and
retain high-profile strategic partnership arrangements. |
| | ● | Our
and our franchisees’ stores may be unable to attract and retain clients, which would
materially and adversely affect our business, results of operations and financial condition. |
| | ● | Our
intellectual property rights, including trademarks, trade names, copyrights and trade dress,
may be infringed, misappropriated or challenged by others. |
| | ● | We
and our franchisees rely heavily on information systems, including the use of email marketing
and social media, and any material failure, interruption or weakness may prevent us from
effectively operating our business, damage our reputation or subject us to potential fines
or other penalties. |
| | ● | If
we fail to properly maintain the confidentiality and integrity of our data, including member
credit card, debit card, bank account information and other personally identifiable information,
our reputation and business could be materially and adversely affected. |
| | ● | The
occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact
our business by causing a disruption to our operations, a compromise or corruption of confidential
information, and/or damage to our employee and business relationships and reputation, all
of which could harm our brand and our business. |
| | ● | If
we fail to successfully implement our growth strategy, which includes new regional development
by existing and new franchisees, our ability to increase our revenues and operating profits
could be adversely affected. |
| | ● | Our
planned growth and changes in the industry could place strains on our management, employees,
information systems and internal controls, which may adversely impact our business. |
| | ● | If
we cannot retain our key employees and hire additional highly qualified employees, we may
not be able to successfully manage our businesses and pursue our strategic objectives. |
| | ● | We
are subject to a variety of additional risks associated with our franchisees, such as potential
franchisee bankruptcies, franchisee changes in control, franchisee turnover rising costs
related to construction of new stores and maintenance of existing stores, which could adversely
affect the attractiveness of our franchise model, and in turn our business, results of operations
and financial condition. |
| ● | Our
business is subject to various laws and regulations and changes in such laws and regulations,
failure to comply with existing or future laws and regulations or failure to adjust to consumer
sentiment regarding these matters, could harm our reputation and adversely affect our business. |
Risks related to our common
stock
| | ● | Provisions of our corporate governance documents could make an acquisition of our company more difficult and may prevent attempts
by our stockholders to replace or remove our current management, even if beneficial to our stockholders. |
| | ● | Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their
purchase price. |
| | ● | Because we do not currently pay any cash dividends on our common stock, you may not receive any return on investment unless you
sell your common stock for a price greater than that which you paid for it. |
| | ● | Financial forecasting may differ materially from actual results. |
Risks related to our business and industry
Our success depends substantially on the value of our brand.
Our success is dependent in large part upon our ability to maintain
and enhance the value of our brand, our store clients’ connection to our brand and a positive relationship with our franchisees.
Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity
or result in litigation. Some of these incidents may relate to our policies, the way we manage our relationships with our franchisees,
our growth strategies, our development efforts or the ordinary course of our, or our franchisees’, businesses. Other incidents that
could be damaging to our brand may arise from events that are or may be beyond our ability to control, such as:
| | ● | actions taken (or not taken) by one
or more franchisees or their employees relating to health, safety, welfare or otherwise; |
| | ● | data security breaches or fraudulent activities associated with our and our franchisees’ payment systems; |
| | ● | regulatory, investigative or other actions relating to our and our franchisees’ data privacy practices; |
| | ● | litigation and legal claims; |
| | ● |
third-party misappropriation, dilution or infringement or other violation of our intellectual property; |
| | ● | regulatory, investigative or other actions relating to our franchisees’ illegal activity targeted at us or others; and |
| ● | conduct by individuals affiliated with us which could violate ethical standards or otherwise harm the reputation of our brand. |
Consumer demand for our stores and our brand’s value could diminish
significantly if any such incidents or other matters erode consumer confidence in us, our consultants or our reputation as a franchising
brand, which would likely result in fewer clients sold or renewed and, ultimately, lower royalty revenue, which in turn could materially
and adversely affect our results of operations and financial condition.
The high level of competition in the franchising industry could
materially and adversely affect our business.
We compete with the following industry participants: other franchising
consultants; business consultants; accountants; business brokers; attorneys; and other businesses that rely on emerging business’
discretionary spending. We may not be able to compete effectively in the markets in which we operate. Competitors may attempt to copy
our business model, or portions thereof, which could erode our market share and brand recognition and impair our growth rate and profitability.
Competitors, including companies that are larger and have greater resources than us, may compete with us to attract clients in our markets.
This competition may limit our ability to attract and retain existing clients and our ability to attract new clients, which in each case
could materially and adversely affect our results of operations and financial condition.
If we are unable to anticipate and satisfy consumer preferences
and shifting views of franchising, our business may be adversely affected.
Our success depends on our ability to anticipate and satisfy consumer
preferences relating to franchising. Our business is and all of our services are subject to changing consumer preferences that cannot
be predicted with certainty. Developments or shifts in research or public opinion on the types of franchising services we provide could
negatively impact the business or consumers’ preferences for franchising services could shift rapidly to different types of franchising
centers or at-home fitness options; and we may be unable to anticipate and respond to shifts in consumer preferences. It is also possible
that competitors could introduce new products and services that negatively impact consumer preference for our business model, or that
consumers would prefer franchising opportunities outside of business operations that do not align with our business model. Failure to
predict and respond to changes in public opinion, public research and consumer preferences could adversely impact our business.
If we fail to obtain and retain high-profile strategic partnership
arrangements, or if the reputation of any of our partners is impaired, our business may suffer.
A principal component of our marketing program is to partner with high-profile
marketing partners to help us extend the reach of our brand. We may not be able to attract and partner with new marketing partners in
the future. In addition, if the actions of our partners were to damage their reputation, our partnerships may be less attractive to our
current or prospective clients. Any of these failures by us or our partners could adversely affect our business and revenues.
Our and our franchisees’ stores may be unable to attract
and retain clients, which would materially and adversely affect our business, results of operations and financial condition.
Our target market is business educated people seeking to expand and
help clients with finding the right franchise opportunity for their situation. The success of our business depends on our and our franchisees’
ability to attract and retain clients. Our and our franchisees’ marketing efforts may not be successful in attracting clients business
levels may materially decline over time, especially at locations in operation for an extended period of time. Some of the factors that
could lead to a decline in new clients include changing desires and behaviors of consumers or their perception of our brand, a shift to
digital fitness versus our core bricks and mortar fitness offerings, changes in business spending trends and general economic conditions,
market maturity or saturation, a decline in our ability to deliver quality service at a competitive price, an increase in monthly clientship
dues due to inflation, direct and indirect competition in our industry and a decline in the public’s interest in franchising, among
other factors.
Our intellectual property rights, including trademarks, trade
names, copyrights and trade dress, may be infringed, misappropriated or challenged by others.
Our intellectual property (including our brand) is important to our
continued success. We seek to protect our trademarks, trade names, copyrights, trade dress and other intellectual property by exercising
our rights under applicable state, provincial, federal and international laws. Policing unauthorized use and other violations of our intellectual
property rights is difficult, and the steps we take may not prevent misappropriation, infringement, dilution or other violations of our
intellectual property, especially internationally where foreign nations may not have laws to protect against “squatting,”
or in “first-to-file” nations where trademark rights can be obtained despite a third party’s prior use of our intellectual
property. If we were to fail to successfully protect our intellectual property rights for any reason, or if any third party misappropriates,
dilutes, infringes or violates our intellectual property, the value of our brand may be harmed, which could have an adverse effect on
our business, results of operations and financial condition. Any damage to our reputation could cause clientship levels to decline or
make it more difficult to attract new clients.
We may also from time to time be required to initiate litigation to
enforce our intellectual property rights. Third parties may also assert that we have infringed, diluted, misappropriated or otherwise
violated their intellectual property rights, which could lead to litigation against us. Litigation, even where we are likely to prevail,
is inherently uncertain and could divert the attention of management, result in substantial costs and diversion of resources and negatively
affect our clientship sales and profitability regardless of whether we are able to successfully enforce or defend our rights. Despite
our efforts to enforce and defend our intellectual property rights, title defects can arise from conduct of third parties that we cannot
anticipate or control, or our exclusive ownership and control over our intellectual property, especially our rights in trademarks and
trade secrets, could be diminished or impaired. For example, under U.S. law a third party’s prior use of a trademark similar to
a SportsQuest trademark could impair our rights in our trademarks, which, despite reasonable research and efforts, we may not have been
able to discover or anticipate. In addition, our trade secrets and confidential information could be compromised through misappropriation
or unauthorized disclosure, including through a cyber incident, and, despite our reasonable efforts to protect our confidential information
and trade secrets, and to maintain the proprietary status thereof, the information could be disclosed or a court could reasonably rule
that legal protections provided to trade secrets are no longer enforceable, which could have a material adverse effect on our business,
results of operations, financial condition and cash flow.
We and our franchisees rely heavily on information systems, and
any material failure, interruption or weakness may prevent us from effectively operating our business and damage our reputation.
We and our franchisees may rely on information systems managed by third
parties, to interact with our franchisees and clients and collect, maintain, store and transmit member information, billing information
and other personally identifiable information, including for the operation of stores, collection of cash, legal and regulatory compliance,
management of our supply chain, accounting, staffing, payment of obligations, ACH transactions, credit and debit card transactions and
other processes and procedures. Our ability to efficiently and effectively manage our franchisee and corporate-owned operations depends
significantly on the reliability and capacity of these systems, and any potential failure of these third parties to provide quality uninterrupted
service is beyond our control.
Our and our franchisees’ operations depend upon our ability,
and the ability of our franchisees and third-party service providers (as well as their third-party service providers), to protect our
computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic
events, as well as from internal and external security breaches, viruses, denial-of-service attacks and other disruptions. The failure
of these systems to operate effectively, stemming from maintenance problems, upgrading or transitioning to new platforms, expanding our
systems as we grow, a breach in security or other unanticipated problems could result in interruptions to or delays in our business and
member services and reduce efficiency in our operations. In addition, the implementation of technology changes and upgrades to maintain
current and integrate new systems may also cause service interruptions, operational delays due to the learning curve associated with using
a new system, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable laws. If our
information systems, or those of our franchisees and third-party service providers (as well as their third-party service providers), fail
and our or our partners’ third-party back-up or disaster recovery plans are not adequate to address such failures, our revenues
and profits could be reduced and the reputation of our brand and our business could be materially adversely affected, which in turn may
materially and adversely affect our results of operations and financial condition.
Use of email marketing and social media may adversely impact
our reputation or subject us to fines or other penalties.
There has been a substantial increase in the use of email and social
media platforms, including v-logs, blogs, chat platforms, social media websites and other forms of internet-based communication, which
allow access to a broad audience of consumers and other interested persons. The rising popularity of social media and other consumer-oriented
technologies has increased the speed and accessibility of information dissemination. Negative or false commentary about us may be posted
on social media platforms or similar platforms at any time and may harm our business, brand, reputation, marketing partners, financial
condition, and results of operations, regardless of the information’s accuracy.
We also use email and social media platforms as marketing tools. For
example, we maintain social media accounts and may occasionally email clients to inform them of certain offers or promotions. As laws
and regulations, including Federal Trade Commission (“FTC”) enforcement, rapidly evolve to govern the use of these platforms
and devices, the failure by us, our employees, our franchisees or third parties acting at our direction to abide by applicable laws and
regulations in the use of these platforms and devices could adversely impact our and our franchisees’ business, financial condition
and results of operations or subject us to fines or other penalties.
If we fail to properly maintain the confidentiality and integrity
of our data, including credit card, debit card, bank account information and other personally identifiable information, our reputation
and business could be materially and adversely affected.
In the ordinary course of business, we and our franchisees collect,
maintain, store and transmit member and employee data, including credit and debit card numbers, bank account information, driver’s
license numbers, dates of birth and other highly sensitive personally identifiable information, in information systems that we maintain
and in those maintained by franchisees and third parties with whom we contract to provide services. In 2019, we introduced a mobile application
that tracks exercise and activity-related data, which may in the future track other personal information. Some of this data is sensitive
and could be an attractive target of a criminal attack by malicious third parties with a wide range of motives and expertise, including
lone wolves, organized criminal groups, “hacktivists,” disgruntled current or former employees and others. The integrity and
protection of member and employee data is critical to us.
Despite the security measures we have in place to comply with applicable
laws and rules, our facilities and systems, and those of our franchisees and third-party service providers (as well as their third-party
service providers), may be vulnerable to security breaches, acts of cyber terrorism or sabotage, vandalism or theft, computer viruses,
loss or corruption of data, programming or human errors or other similar events. Furthermore, the size and complexity of our information
systems, and those of our franchisees and our third-party service providers (as well as their third-party service providers), make such
systems potentially vulnerable to security breaches from inadvertent or intentional actions by our employees, franchisees or vendors,
or from attacks by malicious third parties. Because such attacks are increasing in sophistication and change frequently in nature, we,
our franchisees and our third-party service providers may be unable to anticipate these attacks or implement adequate preventative measures,
and any compromise of our systems, or those of our franchisees and third-party service providers (as well as their third-party service
providers), may not be discovered and remediated promptly. Changes in consumer behavior following a security breach or perceived breach,
act of cyber terrorism or sabotage, vandalism or theft, computer viruses, loss or corruption of data or programming or human error or
other similar event affecting a competitor, large retailer or financial institution may materially and adversely affect our business,
which in turn may materially and adversely affect our results of operations and financial condition.
Additionally, the handling of personally identifiable information by
our, or our franchisees’, businesses are regulated at the federal, state and international levels, as well as by certain industry
groups, such as the Payment Card Industry Security Standards Council, NACHA, and individual credit card issuers. Federal, state, international
and industry groups may also consider and implement from time to time new privacy and security requirements that apply to our businesses.
Compliance with contractual obligations and evolving privacy and security laws, requirements and regulations may result in cost increases
due to necessary system changes, new limitations or constraints on our business models and the development of new administrative processes.
They also may impose further restrictions on our handling of personally identifiable information that are housed in one or more of our,
or our franchisees’ databases, or those of our third-party service providers. Noncompliance with privacy laws or industry group
requirements or a security breach or perceived non-compliance or breach involving the misappropriation, loss or other unauthorized disclosure
of personal, sensitive or confidential information, whether by us or by one of our franchisees or vendors, could have material adverse
effects on our and our franchisees’ business, operations, brand, reputation and financial condition, including decreased revenue,
material fines and penalties, litigation, increased financial processing fees, compensatory, statutory, punitive or other damages, adverse
actions against our licenses to do business and injunctive relief by court or consent order. Despite our efforts, the handling of personally
identifiable information may not be in compliance with applicable law, or this information could be disclosed or lost due to a hacking
event or unauthorized access to our information system, or through publication or improper disclosure, any of which could affect the value
of our brand. We maintain and we require our franchisees to maintain cyber risk insurance, but in the event of a significant data security
breach, this insurance may not cover all of the losses that we would be likely to suffer.
The occurrence of cyber incidents, or a deficiency in cybersecurity,
could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information,
and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business.
We could be in the future, subject to cyber incidents or other adverse
events that threaten the confidentiality, integrity or availability of information resources, including intentional attacks or unintentional
events where parties gain unauthorized access to systems to disrupt operations, corrupt data or steal confidential information about customers,
franchisees, vendors and employees. Such attacks have become more common, and many companies have recently experienced serious cyber incidents
and breaches of their information technology systems. As our reliance on technology has increased, so have the risks posed to our systems,
both internal and those we have outsourced. The three primary risks that could directly result from the occurrence of a cyber incident
include operational interruption, damage to the relationship with clients and private data exposure, which each in turn could create additional
risks and exposure. We maintain insurance coverage to address cyber incidents, and have also implemented processes, procedures and controls
to help mitigate these risks. However, these measures do not guarantee that our reputation and financial results will not be adversely
affected by such an incident.
Because our franchisees accept electronic forms of payment from their
customers, our business requires the collection and retention of customer data, including credit and debit card numbers and other personally
identifiable information in various information systems that we and our franchisees maintain and in those maintained by third parties
with whom we and our franchisees contract to provide credit card processing. We also maintain important internal company data, such as
personally identifiable information about our employees and franchisees and information relating to our operations. Our use of personally
identifiable information is regulated by foreign, federal and state laws, as well as by certain third-party agreements. As privacy and
information security laws and regulations and contractual obligations with third parties evolve, we may incur additional costs to ensure
that we remain in compliance with those laws and regulations and contractual obligations. If our security and information systems are
compromised or if we, our employees or franchisees fail to comply with these laws, regulations, or contract terms, and this information
is obtained by unauthorized persons or used inappropriately, it could adversely affect our reputation and could disrupt our operations
and result in costly litigation, judgments, or penalties arising from violations of federal and state laws and payment card industry regulations.
Under certain laws, regulations and contractual obligations, a cyber
incident could also require us to notify customers, employees or other groups of the incident or could result in adverse publicity, loss
of sales and profits or an increase in fees payable to third parties. We could also incur penalties or remediation and other costs that
could adversely affect the operation of our business, which in turn may materially and adversely affect our results of operations and
financial condition.
If we fail to successfully implement our growth strategy, which
includes new franchisees, our ability to increase our revenues and operating profits could be adversely affected.
Our growth strategy relies in large part upon new franchisees. Our
franchisees face many challenges in opening new operation, including:
| |
● |
availability and cost of financing; |
| |
● |
competition; |
| |
● |
negotiation of acceptable financing terms; |
| |
● |
securing required domestic or foreign governmental permits and approvals; |
| |
● |
franchising trends in new geographic regions and acceptance of our offerings; |
| |
● |
employment, training and retention of qualified employees; and |
| |
● |
general economic and business conditions. |
Our growth strategy also relies on our ability to identify, recruit
and enter into agreements with a sufficient number of franchisees. In addition, our ability and the ability of our franchisees to successfully
open and operate new stores in new or existing markets may be adversely affected by a lack of awareness or acceptance of our brand, as
well as a lack of existing marketing efforts and operational execution in these new markets. To the extent that we are unable to implement
effective marketing and promotional programs and foster recognition and affinity for our brand in new domestic and international markets,
our and our franchisees’ new stores may not perform as expected and our growth may be significantly delayed or impaired.
Economic, political and other risks associated with our international operations
could adversely affect our profitability and international growth prospects.
We may have stores operating in certain other countries around the
world. Our international operations would be subject to a number of risks inherent to operating in foreign countries, and
any expansion of our international operations will increase the impact of these risks. These risks include, among others:
| |
● |
inadequate brand infrastructure within foreign countries to support our international activities; |
| |
● |
inconsistent regulation or sudden policy changes by foreign agencies or governments; |
| |
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the collection of royalties from foreign franchisees; |
| |
● |
difficulty of enforcing contractual obligations of foreign franchisees; |
| |
● |
increased costs in maintaining international franchise and marketing efforts; |
| |
● |
franchisees’ difficulty in raising adequate capital; |
| |
● |
problems entering international markets with different cultural bases and consumer preferences; |
| |
● |
political and economic instability of foreign markets; |
| |
● |
compliance with laws and regulations applicable to our international operations, such as the Foreign Corrupt Practices Act and
regulations promulgated by the Office of Foreign Asset Control; |
| |
● |
fluctuations in foreign currency exchange rates; and |
| |
● |
operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application
and enforceability of laws and regulations relating to contract and intellectual property rights. |
As a result, those new stores may be less successful than stores in
our existing markets. Further, effectively managing growth can be challenging, particularly as we continue to expand into new international markets
where we must balance the need for flexibility and a degree of autonomy for local management against the need for consistency with our
mission and standards.
Our financial results are affected by the operating and financial
results of, and our relationships with, our franchisees.
A substantial portion of our revenues come from royalties, which
are generally based on a percentage of gross monthly clientship dues and annual fees at our franchise stores or, in certain cases, a
sliding scale based on gross monthly clientship dues, other fees and commissions generated from activities associated with our
franchisees, and equipment sales to our franchisees. As a result, our financial results are largely dependent upon the operational
and financial results of our franchisees. Negative economic conditions, including recession, public health emergencies,
inflation, increased unemployment levels and the effect of decreased consumer confidence or changes in consumer behavior, could
materially harm our franchisees’ financial condition, which would cause our royalty and other revenues to decline and
materially and adversely affect our results of operations and financial condition as a result. In addition, if our franchisees fail
to renew their franchise agreements, these revenues may decrease, which in turn could materially and adversely affect our results of
operations and financial condition.
Our franchisees could take actions that harm our business.
Our franchisees are contractually obligated to operate their stores
in accordance with the operational, safety and health standards set forth in our agreements with them, including adherence to applicable
laws and regulations. However, franchisees are independent third parties and their actions are outside of our control. In addition,
we cannot be certain that our franchisees will have the business acumen or financial resources necessary to operate successful franchises
in their approved locations, and certain state franchise laws limit our ability to terminate or not renew these franchise agreements.
Our franchisees own, operate and oversee the daily operations of their stores. As a result, the ultimate success and quality of any franchise
store rests with the franchisee. If franchisees do not successfully operate stores in a manner consistent with required standards and
comply with local laws and regulations, franchise fees and royalties paid to us may be adversely affected, and our brand image and reputation
could be harmed, which in turn could materially and adversely affect our results of operations and financial condition.
Although we believe we generally maintain positive working relationships
with our franchisees, disputes with franchisees could damage our brand image and reputation and our relationships with our franchisees
generally.
We are subject to a variety of additional risks associated with
our franchisees.
Our franchise business model subjects us to a number of risks, any
one of which may impact our royalty revenues collected from our franchisees, may harm the goodwill associated with our brand, and may
materially and adversely impact our business and results of operations.
Bankruptcy of franchisees. A franchisee bankruptcy could
have a substantial negative impact on our ability to collect payments due under such franchisee’s franchise agreement(s). In a franchisee
bankruptcy, the bankruptcy trustee may reject its franchise agreement(s), ADA(s) and/or franchisee lease/sublease pursuant to Section 365
under the U.S. bankruptcy code, in which case there would be no further royalty payments from such franchisee, and we may not ultimately
recover those payments in a bankruptcy proceeding of such franchisee in connection with a damage claim resulting from such rejection.
Franchisee changes in control. Our franchises are operated
by independent business owners. Although we have the right to approve franchise owners, and any transferee owners, we cannot predict in
advance whether a particular franchise owner will be successful. If an individual franchise owner is unable to successfully establish,
manage and operate the store, the performance and quality of service of the store could be adversely affected, which could reduce clients
and negatively affect our royalty revenues and brand image. Although our agreements prohibit “changes in control” of a franchisee
without our prior consent as the franchisor, our form franchise agreement, and state franchise relationship laws limit our ability to
withhold our consent to the transfer of a store to a new owner. In any transfer situation, the transferee may not be able to perform its
obligations under its franchise agreements and successfully operate the store. In such a case the performance and quality of service of
the store could be adversely affected, which could also reduce clients and negatively affect our royalty revenues and brand image.
In addition, in the event of the death or permanent disability of a
franchisee (if a natural person) or a principal of a franchisee entity, the executors and representatives of the franchisee are required
to appoint an operator approved by us to manage the store. There is, however, no assurance that any such operator would be found or, if
found, would be able to successfully operate its store. In the event that an acceptable operator is not found, the franchisee
would be in default under its franchise agreement and, among other things, the franchise agreement and the franchisee’s right to
operate the store under the franchise agreement could be terminated. If a new operator is not found or approved by us, or the new operator
is not as successful in operating the store as the then-deceased franchisee or franchisee principal, the gross EFT of the store
may be affected and could adversely affect our business and operating results.
Franchisee insurance. Our form franchise agreement requires
each franchisee to maintain certain insurance types and levels. Losses arising from certain extraordinary hazards, however, may not be
covered, and insurance may not be available (or may be available only at prohibitively expensive rates) with respect to many other risks,
or franchisees may fail to procure the required insurance. Moreover, any loss incurred could exceed policy limits and policy payments
made to franchisees may not be made on a timely basis. Any such loss or delay in payment could have a material adverse effect on a franchisee’s
ability to satisfy its obligations under its franchise agreement or other contractual obligations, which could cause the termination of
the franchisee’s franchise agreement and, in turn, may materially and adversely affect our operating and financial results.
Some of our franchisees are operating entities. Franchisees
may be natural persons or legal entities. Our franchisees that are operating companies (as opposed to limited purpose entities) are subject
to business, credit, financial and other risks, which may be unrelated to the operation of their stores. These unrelated risks could materially
and adversely affect a franchisee that is an operating company and its ability to service its clients and maintain store operations while
making royalty payments, which in turn may materially and adversely affect our business and operating results.
Franchise agreement termination; nonrenewal. Each franchise
agreement is subject to termination by us as the franchisor in the event of a default, generally after expiration of applicable cure periods,
although under certain circumstances a franchise agreement may be terminated by us upon notice without an opportunity to cure. The default
provisions under the former franchise agreement are drafted broadly and include, among other things, any failure to meet operating standards
and actions that may threaten our brand’s goodwill. Moreover, a franchisee may have a right to terminate its franchise agreement
in certain circumstances. Our ability to terminate a franchise agreement following a default that is not cured within the applicable cure
period, if any, and the ability of franchisees under certain circumstances to terminate a franchise agreement, could reduce our royalty
revenue, which in turn may materially and adversely affect our business and operating results.
In addition, each franchise agreement has an expiration date. Upon
the expiration of a franchise agreement, we or the franchisee may, or may not, elect to renew the franchise agreement. If the franchise
agreement is renewed, the franchisee will receive a “successor” franchise agreement for an additional term. Such option, however,
is contingent on the franchisee’s execution of the then-current form franchise agreement (which may include increased royalty payments,
advertising fees and other fees and costs), the satisfaction of certain conditions (including re-equipment and remodeling of the store
and other requirements) and the payment of a successor fee. If a franchisee is unable or unwilling to satisfy any of the foregoing conditions,
the expiring franchise agreement will terminate upon expiration of its term. If not renewed, a franchise agreement and the related payments
will terminate. We may be unable to find a new franchisee to replace such lost revenues, which in turn may materially and adversely affect
our business and operating results.
Franchisee litigation; effects of regulatory efforts. We
and our franchisees are subject to a variety of litigation risks, including, but not limited to, member claims, personal injury claims,
vicarious liability claims, litigation with or involving our relationship with franchisees, litigation alleging that the franchisees are
our employees or that we are the co-employer of our franchisees’ employees, employee allegations against the franchisee or us of
improper termination and discrimination, landlord/tenant disputes and intellectual property claims. Each of these claims may increase
costs, reduce the execution of new franchise agreements and affect the scope and terms of insurance or indemnifications we and our franchisees
may have. In addition, we and our franchisees are subject to various regulatory efforts to enforce employment laws, such as efforts to
classify franchisors as the co-employers of their franchisees’ employees and legislation to categorize individual franchised businesses
as large employers for the purposes of various employment benefits. We and our franchisees also may be subject to changes in state tax
laws or enforcement of state tax laws, whereby states subject certain franchisee payments to out of state franchisors to state sales tax
or other, similar taxes. These and other legislation or regulations may have a disproportionate impact on franchisors and/or franchised
businesses. These changes may impose greater costs and regulatory burdens on franchising and negatively affect our ability to sell new
franchises, which in turn may materially and adversely affect our results of operations and financial condition.
Franchise agreements and franchisee relationships. Our
franchisees develop and operate their stores under terms set forth in our area development agreement (ADAs) and franchise agreements,
respectively. These agreements typically give rise to long-term relationships that involve a complex set of mutual obligations
and mutual cooperation. We have a standard set of agreements that we typically use with our franchisees, but various franchisees have
negotiated specific terms in these agreements. Furthermore, we may from time to time negotiate terms of our franchise agreements with
individual franchisees or groups of franchisees (e.g., a franchisee association). We seek to have positive relationships with our franchisees,
based in part on our common understanding of our mutual rights and obligations under our agreements, to enable both the franchisees’
business and our business to be successful. However, we and our franchisees may not always maintain a positive relationship or always
interpret our agreements in the same way. Our failure to have positive relationships with our franchisees could individually or in the
aggregate cause us to change or limit our business practices, which may make our business model less attractive to our franchisees or
our clients and could result in costly litigation between us and our franchisees. Finally, we have the discretion to, and may change over
time, the financial and other terms of our franchise agreements and ADAs offered to new franchisees and developers. In the past, we have
sought to discuss and reach an accord with our franchisee association over such changes, but there is no assurance that we will be successful
in such efforts in the future. If we were unsuccessful, this may lead to discord with our franchisee association that could have a detrimental
effect on the growth of our business.
Construction and maintenance costs. Our franchisees
may incur rising costs related to construction of new stores and maintenance of existing stores, which could adversely affect the attractiveness
of our franchise model, and in turn our business, results of operations and financial condition. Corporate-owned stores require significant
upfront and ongoing investment, including periodic remodeling and equipment replacement. If our franchisees’ costs are greater than
expected, franchisees may need to outperform their operational plan to achieve their targeted return. In addition, increased costs may
result in lower profits to franchisees, which may allow a franchisee to terminate its franchise agreement or make it harder for us to
attract new franchisees, which in turn could materially and adversely affect our business, results of operations and financial condition.
Franchisee turnover. There can be no guarantee of the retention
of any, including the top performing, franchisees in the future, or that we will maintain the ability to attract, retain, and motivate
sufficient numbers of franchisees of the same caliber. The quality of existing franchisee operations may be diminished by factors beyond
our control, including franchisees’ failure or inability to hire or retain qualified managers and other personnel. Training of managers
and other personnel may be inadequate. These and other such negative factors could reduce franchise stores’ revenues, impact payments
to us from franchisees under the franchise agreements and could have a material adverse effect on our revenues, which in turn may materially
and adversely affect our business.
Our business is subject to various laws and regulations and changes
in such laws and regulations, or failure to comply with existing or future laws and regulations, could adversely affect our business.
We are subject to the FTC Franchise Rule, which is a trade regulation
imposed on franchising promulgated by the FTC that regulates the offer and sale of franchises in the United States and that requires us
to provide to all prospective franchisees certain mandatory disclosure in a FDD. In addition, we are subject to state franchise registration
and disclosure laws in approximately 14 states and various state business opportunity laws that regulate the offer and sale of franchises
by requiring us, unless otherwise exempt, to register our franchise offering in those states prior to our making any offer or sale of
a franchise in those states and to provide a FDD to prospective franchisees in accordance with such laws. We are subject to franchise
disclosure laws in States that regulate the offer and sale of franchises by requiring us, unless otherwise exempt, to prepare and deliver
a franchise disclosure document to disclose our franchise offering in a prescribed format to prospective franchisees in accordance with
such laws, and that regulate certain aspects of the franchise relationship. We are subject to similar franchise sales laws in Canada,Mexico,
and Australia (should we expand internationally), and may become subject to similar laws in other countries in which we may offer franchises
in the future. Failure to comply with such laws may result in a franchisee’s right to rescind its franchise agreement
and damages, and may result in investigations or actions from federal or state franchise authorities, civil fines or penalties, and stop
orders, among other remedies. We are also subject to franchise relationship laws in approximately 20 states and in various U.S. territories
that regulate many aspects of the franchise relationship including, depending upon the jurisdiction, renewals and terminations of franchise
agreements, franchise transfers, the applicable law and venue in which franchise disputes must be resolved, discrimination and franchisees’
right to associate, among others. Our failure to comply with such franchise relationship laws could result in fines, damages and our inability
to enforce franchise agreements where we have violated such laws. Although we believe that our FDDs, franchise sales practices and franchise
activities comply with such franchise sales laws and franchise relationship laws, our non-compliance could result in liability to franchisees
and regulatory authorities (as described above), inability to enforce our franchise agreements and a reduction in our anticipated royalty
revenue, which in turn may materially and adversely affect our business and results of operations.
We and our franchisees are also subject to the Fair Labor Standards
Act of 1938, as amended, and various other laws in the United States, Canada, Panama, Mexico and Australia governing such matters as minimum-wage
requirements, overtime and other working conditions. Based upon our experience with hiring employees and operating corporate-owned stores,
we believe a significant number of our and our franchisees’ employees are paid at rates related to the U.S. federal or state minimum
wage, and past increases in the U.S. federal and/or state minimum wage have increased labor costs, as would future increases. Any increases
in labor costs might result in our and our franchisees inadequately staffing stores. Such increases in labor costs, and those that may
arise due to other changes in labor laws or as a result of low unemployment rates, could affect store performance and quality of service,
decrease royalty revenues and adversely affect our brand.
Our and our franchisees’ operations and properties are subject
to extensive U.S., Canadian, Panamanian, Mexican and Australian, federal, international, state, provincial and local laws and regulations,
including those relating to environmental, building and zoning requirements. Our and our franchisees’ development of properties
depends to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use, environmental,
traffic and other regulations and requirements. Failure to comply with these legal requirements could result in, among other things, revocation
of required licenses, administrative enforcement actions, fines and civil and criminal liability, which could adversely affect our business.
We and our franchisees are responsible at stores we each operate for
compliance with state, provincial and local laws that regulate the relationship between stores and their clients. Many states and
provinces have consumer protection regulations that may limit the collection of clientship dues or fees prior to opening, require certain
disclosures of pricing information, mandate the maximum length of contracts and “cooling off” periods for clients (after the
purchase of a clientship), set escrow and bond requirements for stores, govern member rights in the event of a member relocation or disability,
provide for specific member rights when a store closes or relocates, or preclude automatic clientship renewals. Our or our franchisees’
failure to comply fully with these rules or requirements may subject us or our franchisees to fines, penalties, damages and civil liability,
or result in clientship contracts being void or voidable. In addition, states or provinces may update these laws and regulations. Any
additional costs which may arise in the future as a result of changes to the legislation and regulations or in their interpretation could
individually or in the aggregate cause us to change or limit our business practices, which may make our business model less attractive
to our franchisees or our clients.
Risks related to our common stock
Provisions of our corporate governance documents could make an
acquisition of our Company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even
if beneficial to our stockholders.
Our certificate of incorporation and bylaws and the Delaware General
Corporation Law (the “DGCL”) contain provisions that could make it more difficult for a third party to acquire us, even if
doing so might be beneficial to our stockholders. These provisions include:
| |
● |
the division of our board of directors
into three classes and the election of each class for three-year terms; |
| |
● |
advance notice requirements for stockholder
proposals and director nominations; |
| |
● |
the ability of the board of directors
to fill a vacancy created by the expansion of the board of directors; |
| |
● |
the ability of our board of directors
to issue new series of, and designate the terms of, preferred stock, without stockholder approval, which could be used to, among other
things, institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer,
likely preventing acquisitions that have not been approved by our board of directors; |
| |
● |
limitations on the ability of stockholders
to call special meetings and to take action by written consent; and |
| |
● |
the required approval of holders of
at least 75% of the voting power of the outstanding shares of our capital stock to adopt, amend or repeal certain provisions of our certificate
of incorporation and bylaws or remove directors for cause. |
In addition, Section 203 of the DGCL may affect the ability of
an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that
the stockholder becomes an “interested stockholder.” While we have elected in our certificate of incorporation not to be subject
to Section 203 of the DGCL, our certificate of incorporation contains provisions that have the same effect as Section 203 of
the DGCL and accordingly will not be subject to such restrictions.
Because our board of directors is responsible for appointing the clients
of our management team, these provisions could in turn affect any attempt to replace current clients of our management team. As a result,
you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective measures, and
efforts by stockholders to change the direction or management of the Company may be unsuccessful.
Our stock price could be extremely volatile, and, as a result,
stockholders may not be able to resell shares at or above their purchase price.
Currently our common stock is listed on the Pink Sheets or OTC Markets
and it is thinly traded. This situation means our stock price could fluctuate based on very low trading volume. In addition, in recent
years the stock market in general has been highly volatile. As a result, the market price and trading volume of our common stock is likely
to be similarly volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value of their
stock, including decreases unrelated to our results of operations or prospects, and could lose part or all of their investment. The price
of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this
report and others such as:
| |
● |
variations in our operating performance and the performance of our competitors; |
| |
● |
actual or anticipated fluctuations in our quarterly or annual operating results; |
| |
● |
publication of research reports by securities analysts about us or our competitors or our industry; |
| |
● |
the public’s reaction to our press releases, our other public announcements and our filings with the SEC; |
| |
● |
our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give
fo the market. |
| |
● |
additions and departures of key employees. |
| |
● |
strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments
or changes in business strategy; |
| |
● |
the passage of legislation or other regulatory developments affecting us or our industry; |
| |
● |
speculation in the press or investment community; |
| |
● |
changes in accounting principles; |
| |
● |
terrorist acts, acts of war or periods of widespread civil unrest; |
| |
● |
natural disasters, pandemics and other calamities; |
| |
● |
breach or improper handling of data or cybersecurity events; and |
| |
● |
changes in general market and economic conditions. |
In the past, securities class action litigation has often been initiated
against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and
divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or
to settle litigation.
Because we do not currently pay any cash dividends on our common
stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for
it.
We may retain future earnings, if any, for future operations, expansion
and debt repayment and do not currently pay any cash dividends on our common stock. Any decision to declare and pay dividends in the future
will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial
condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our
ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur,
including our securitized financing facility. As a result, you may not receive any return on an investment in our common stock unless
you sell our common stock for a price greater than that which you paid for it.
Financial forecasting may differ materially from actual results.
Due to the inherent difficulty of predicting future events and results,
our forecasted financial and operational results may differ materially from actual results. Discrepancies between forecasted and actual
results could cause a decline in the price of our stock.
ITEM 2. PROPERTIES
The Company’s corporate headquarters are located in West Palm
Beach FL at 500 S. Australian Ave. Suite #600, West Palm Beach, Florida 33401. We also use another West Palm Bech location for administrative
purposes. These premises consist of approximately 600 square feet in a multi-tenant building leased by the Company from an unaffiliated
third party pursuant to a month-to-month lease with the option to convert to a longer term at the Company’s sole option. Current
monthly rent under this lease is approximately $2,500.
ITEM 3. LEGAL PROCEEDINGS
As of the period ending June 30, 2023, the Company was not involved
in any legal proceedings, save and accept the company threatened to take legal action against a group of ex shareholders Alan Tucker et
al if they do not return certain shares which remain unpaid. Subsequently the management learned that these shares were sold in the open
market.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART
II
Item 5. Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our shares of common stock are currently traded on the OTC Markets
Pink Sheets (“OTC”) under the symbol “OTC:SPQS” Investors can find real-time quotes and market information on
the Company on www.otcmarkets.com.
The 52-week range of our trading price is $0.0007 to $0.0028 with an
average trading volume of 314,012 shares over the past 30 days. The most recent closing price was $0.0009 on August 18, 2023. We
consider our stock to be “thinly traded” and any reported sale prices may not be a true market-based valuation of the stock.
Some of the bid quotations from the OTC set forth below may reflect inter-dealer prices, without retail mark-up, markdown or commission
and may not represent actual transactions.
Holders of common equity
As of August 18, 2023, we had approximately 130 record holders of our
common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners
of common stock whose shares are held in the names of various security brokers, dealers and registered clearing agencies.
Dividend information
We have not declared or paid a cash dividend to stockholders since
our company was organized. Our board of directors presently intends to retain any earnings to finance operations and does not expect to
authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company’s results
of operations, financial condition, contractual restrictions, capital requirements and other factors deemed relevant by the board of directors.
Issuer Purchases of Equity Securities
The Company has never purchased nor does it own any equity securities
of any other issuer.
Recent Sales of Unregistered
Securities
There have been no new issuance of common shares during the past two
years.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
Furnish the information required by Item 303 of Regulation
S-K (§ 229.303 of this chapter).
(3) A registrant that qualifies as a smaller reporting
company, as defined by § 229.10(f)(1), is not required to provide the information required by this section. https://www.law.cornell.edu/cfr/text/17/229.302
The management operates an outsourced offshore office with very low
monthly burn rate in monthly expenses due to the nature of the low wages afforded by offshore outsourcing. The leads are worked through
by the offshore office and all prospects are handled by the company USA based management and office. The company has secured additional
capital injection in form of capital contribution from its current management and has no need to add current to seek outside capital.
The franchise industry is one of the few recession resistant industries and this type of business thrives in a down market or a downturn
in the market. The industry equally does well when the market is in the uptrend due to the incoming management of its clients receiving
either a golden parachute or the actual client itself grows their business to a new level.
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk.
As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange
Act and in Item 10(f)(1) of Regulation S-K, this Item is inapplicable to us.
Item 8. Financial Statements and Supplementary
Data.
For information required with respect to this Item 8, see index to
Financial Statements and Schedules on page F-1 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.
Furnish the information required by Item 304(b) of Regulation S-K (§
229.304(b) of this chapter).
Company stopped reporting to the SEC during the economic crisis of
2008 and subsequently deregistered in 2011. To the best of our knowledge and understanding there has not been any disagreements with the
previous accounting or management.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2023, the end of the period covered by this report,
we conducted, under the supervision and with the participation of our management, including our Chief Executive and Chief Financial Officer,
an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act in ensuring that information required to be disclosed by us in our reports is recorded, processed,
summarized and reported within the required time periods in the relevant SEC rules and forms. Based on the foregoing, the Chief Executive
and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.
Management’s Annual Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control system
is a process designed by, or under the supervision of, our principal executive and principal financial officer, or persons performing
similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally
accepted accounting principles (“U.S. GAAP”).
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal control over financial reporting
that occurred during the quarterly period ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
Attestation Report of Independent Registered Public Accounting Firm
An attestation report of our registered public accounting firm regarding
internal control over financial reporting is not required.
Item 9B. Other Information.
NONE.
Item 9C. Disclosure Regarding Foreign
Jurisdictions that Prevent Inspections.
Non Applicable
PART
III
Item 10. Directors, Executive Officers and
Corporate Governance.
Board of Directors and Executive Officers
Our directors and executive officers are as follows:
| Name |
|
Age |
|
|
Position |
| Zoran Cvetojevic |
|
|
72 |
|
|
Chairman of the Board of Directors, President, Treasurer, Secretary |
| Irina Veselinovic |
|
|
41 |
|
|
Chief Operations Officer, Chief Executive Officer |
| Alexander Sentic |
|
|
56 |
|
|
Independent Director |
| Dr. Sanja Pekovic D.Sc. |
|
|
69 |
|
|
Independent Director |
Set forth below is biographical information
with respect to each of the aforementioned individuals.
ZORAN CVETOJEVIC, CHAIRMAN AND DIRECTOR,
AGE 72
Zoran Cvetojevic
graduated from the University of Electronic Engineering, Skopje, North Macedonia, (Former Yugoslavia). MSc degree Master of Science in
Electronic design at Cranfield Institute of Technology, England in 1989. During his long work experience as a manager and director of
various companies, Mr. Cvetojevic expanded his interests into business administration and strategy. Mr. Cvetojevic is an accredited investor
and sits as a Chairman and or an independent Board Advisor on many publicly traded companies. His past hobby involved stock trading financing
and being a Marketing director. Mr. Cvetojevic has a great ability to design, implement and facilitate the required annual marketing plan.
In addition to this, Mr. Cvetojevic possesses a great ability to develop, and execute Research, analysis, and monitoring of financial,
technological, and demographic factors. Mr. Cvetojevic understands the importance of undertaking and evaluating customer research, market
conditions, and competitor data. Mr. Cvetojevic has experience with new software implementation and is not afraid to test and implement
the latest technologies available to provide corporations with the competitive advantage required to succeed.
IRINA VESELINOVIC, CHIEF EXECUTIVE OFFICER
AND CHIEF OPERATING OFFICER, AGE 41
As a Business
Development Manager, Irina was working in private companies, and spent almost two decades mastering her leadership in administration,
accounting, investor relations skills and financial intelligence. In addition, her creativity and entrepreneurial versatility is reflected
by her professional endeavors in the interior design and fashion industries. Relying on her extensive background in various business fields,
Irina is able to provide the necessary connections and momentum that is the cornerstone of our team.
DR SANJA
PEKOVIC, SCI INDEPENDENT DIRECTOR, AGE 69
Dr Sanja
Pekovic, is a Principal Scientist and Project Leader at the Institute for Biological Research “Sinisa Stankovic” (IBISS),
University of Belgrade member since 1986, and Head of the Department of Neurobiology since 2006. She is a Professor of Experimental Models
of CNS Diseases at PhD studies in Neurosciences at the Faculty of Biology, University of Belgrade, and Invited lecturer at PhD studies
in Neurosciences, School of Medicine, University of Belgrade, course: Molecular Biology of the Nervous System. Dr Pekovic is the permanent
member of the Working Groups representing Serbia in the following COST (European Cooperation in the Field of Scientific and Technical
Research) actions: COST B10 (2001-2005) and COST B30 (2006-2010).
Dr Pekovic
participated as one of the project leaders, in the preparation of several FP6 and FP7 European projects, and is the participant of a German-Serbian
collaborative project (2010-2012). Also, she is a member of Scientific and Organizing Boards of several conferences and congresses with
international participation, and a member of IBISS Scientific Council and Steering Board of Association for Advancement of Clinical Research
of Serbia.
The focus
of her research is on translational medicine and therapy of brain injury, multiple sclerosis, neurodegeneration, neuroinflammation, brain
plasticity, and currently on early and sensitive biomarkers of neuroinflammation and neurodegeneration in serum and CSF of patients with
traumatic brain injury.
ALEXANDER
SENTIC, INDEPENDENT DIRECTOR, AGE 56
Alex Sentic
is a businessperson who has been at the head of 9 different public companies. Alex Sentic is versatile in financial services. Using his
longtime experience in finance, sales, and his corporate development skills, backed by his large pool of business contacts, it did not
take long for him to make a success in multiple corporate transactions, and past endeavors. Mr. Sentic is supported by multiple experienced
CPAs that work in both Private and Public sectors. He also sustains multiple ongoing successful relationships with consultants with expertise
in Public Companies, Equity Financing and Investment Banking. Mr. Sentic has been a successful entrepreneur since a young age and has
held multiple Executive Positions over the years. Mr. Sentic specializes in Interim Management coupled with his expertise of Corporate
Development to uniquely assist both Private and Public trading companies.
Board of Directors and Officers
Each director is elected until our next annual
meeting of stockholders and until his successor is duly elected and qualified. The Board of Directors may also appoint additional
directors up to the maximum number permitted under our by-laws. A director so chosen or appointed will hold office until the next annual
meeting of stockholders. Each executive officer serves at the discretion of the Board of Directors and holds office until their successor
is elected or until their resignation or removal in accordance with our articles of incorporation and by-laws.
Family Relationships
There are no family relationships between or among
any of our directors or executive officers.
Significant Employees
The Company does not presently have any significant
employees other than the named officers and directors.
Meeting and Committees of the Board of Directors
During the years ended December 31, 2021 and 2022
our Board of Directors held no meetings and took no actions.
Company board members met several times to discuss
the recovery of certain shares of Allan Tucker, Mike Barbee, and Jeff Burns which remain unpaid for. The Company retained a litigation
barrister Martin Shell to attempt to recover these shares.
As our common stock is not presently listed for
trading or quotation on a national securities exchange or NASDAQ, we are not presently required to and do not have any board committees.
We do not currently have an audit committee financial
expert, nor do we have an audit committee. Our entire board of directors handles the functions that would otherwise be handled by an audit
committee. We do not currently have the capital resources to pay director fees to a qualified independent expert who would be willing
to serve on our board and who would be willing to act as an audit committee financial expert. As our business expands and as we appoint
others to our board of directors we expect that we will seek a qualified independent expert to become a member of our board of directors.
Before retaining any such expert, our board would make a determination as to whether such a person is independent.
Due to our small size and limited operations to
date, we do not presently have a nominating committee, compensation committee or other committee performing similar functions. We have
not adopted any procedures by which security holders may recommend nominees to the board of directors, and we do not have a diversity
policy.
Board Leadership Structure and Role on Risk
Oversight
We have no policy requiring the combination or
separation of the Principal Executive Officer and Chairman roles and our governing documents do not mandate a particular structure. Our
directors recognize that the leadership structure and the combination or separation of these leadership roles is driven by our needs at
any point in time.
Our directors are involved in the general oversight
of risks that could affect our business and they will continue to evaluate our leadership structure and modify such structure as appropriate
based on our size, resources and operations.
Stockholder Communication with the Board of
Directors
Stockholders may send communications to our board
of directors by writing to SportsQuest, Inc., 500 S. Australian Ave., Suite #600, West Palm Beach, FL 33401 or corporate@sports-quest.co.
Officers and Directors Indemnification
Under our Certificate of Incorporation and Bylaws,
the Company may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his or her position,
if he or she acted in good faith and in a manner he or she reasonably believed to be in the Company’s best interest. The Company
may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding
as to which he or she is to be indemnified, the Company must indemnify the officer or director against all expenses incurred, including
attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in
defending the proceeding, and if the officer or director is judged liable, then only by a court order. The indemnification coverage is
intended to be to the fullest extent permitted by applicable laws.
Regarding indemnification for liabilities
arising under the Securities Act, which may be permitted to officers or directors under applicable state law, the Company is informed
that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Securities
Act and is, therefore, unenforceable.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires our
directors, officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports
of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To the best of our knowledge there are no known delinquencies
Item 11. Executive Compensation.
The following table sets forth information concerning compensation
for fiscal 2021 and 2022 earned by Zoran Cvetojevic, the Company’s Chairman and Chief Executive Officer, Irina Veselinovic, the
Company’s Chief Operating Officer (the “Named Executives”) and Alexander Sentic and Dr. Sanja Pekovic, D. Sc., Independent
Directors.
EXECUTIVE COMPENSATION TABLE
Name and Principal
Position |
|
Year |
|
|
Salary |
|
|
Stock
Awards
($)(1)(2) |
|
|
Option
Awards
($)(1)(2) |
|
|
All other Compensation
($) |
|
|
Total
($) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Zoran Cvetojevic, |
|
2021/2022 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Chairman, President, Treasurer, Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Irina Veselinovic |
|
2021/2022 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Chief Operating Officer, CEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander Sentic |
|
2021/2022 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Independent Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Sanja Pekovic D. Sc. |
|
2021/2022 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Independent Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment Agreements
None.
Outstanding Equity Awards
None.
Other Compensation
There are no plans that provide for the payment
of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined
benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution
plans. Except as set forth above with respect to cash compensation amounting to 2% of the purchase price in the event of a sale of
the Company payable to each of the Named Executives as provided in their Employment Agreements, there are no contracts, agreements, plans
or arrangements, whether written or unwritten, that provide for payment(s) to a named executive officer at, following, or in connection
with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in the named
executive officer’s responsibilities following a change in control, with respect to each named executive officer.
Stock Option Plans and Stock Compensation Plans
No retirement, pension, profit sharing, stock
option or insurance programs or other similar programs have been adopted by the Company for the benefit of the Company’s employees.
Indebtedness of Directors and Officers
None of our directors or senior officers, and
no associates or affiliates of any of them, is indebted to us.
Compensation Committee Interlocks and Insider
Participation
We do not have a compensation committee or a committee
performing similar functions. We plan to have a compensation committee when we elect additional independent persons to our board of directors.
Compensation Committee Report
Because we do not have a compensation committee
or a committee performing similar functions, we do not have a compensation committee report. All compensation matters are determined by
our board of directors.
Compensation of Directors
We have not established standard compensation
arrangements for our directors and the compensation, if any, payable to each individual for their service on our board will be determined
from time to time by our board of directors based upon the amount of time expended by each of the directors on our behalf. None of our
directors has received any compensation for their services.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
The following table sets forth certain information
regarding beneficial ownership of our common stock as of August 25, 2023, by (i) each person known by us to be the beneficial owner of
more than five (5) percent of the outstanding common stock, (ii) each director, (iii) each executive officer, and (iv) all executive officers
and directors as a group. The number of shares beneficially owned is determined under rules promulgated by the SEC, and the information
is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right
to acquire within 60 days of July 20, 2021, through the exercise or conversion of any stock option, convertible security, warrant or other
right. Including those shares in the tables does not, however, constitute an admission that the named stockholder is a direct or indirect
beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment
power (or shares that power with that person’s spouse) with respect to all shares of common stock listed as owned by that person
or entity.
| Name and Address of Beneficial Owner | |
Amount | | |
Percentage of Class
Ownership (2) | |
| Jeffrey Burns – Thomasville, GA | |
| 650,000,000
Common | | |
| 26.16% | |
| Energy 101 Consulting (Alan Tucker) – Fort Lauderdale, FL | |
| 195,000,000
Common | | |
| 8.7% | |
| Jim Consulting, Inc (Alan Tucker) – Fort Lauderdale, FL | |
| 195,000,000
Common | | |
| 8.7% | |
Changes in
Control
There are no arrangements known to us the operation
of which may at a later date result in a change in control of our company.
Item 13. Certain Relationships and Related Transactions,
and Director Independence.
Other than as set forth below, or discussed in
the notes to the Consolidated Financial Statements herein, during the fiscal years covered by this filing there have not been any relationships,
transactions or proposed transactions to which we were or are to be a party, in which any of the directors, officers, or 5% or greater
stockholders (or any immediate family thereof) had or is to have a direct or indirect material interest except for the following:
Share Issuances
None
Convertible Notes
A convertible not was issued by the company in
favor of Emry Capital in the amount of $160,000 in March 2021. The note allows for conversion at $0.001 or par value, whichever is lower.
The Note carries and interest of 15% per annum. At the time of the end of the June 30, 2023 quarterly report the remaining principal of
the Note was $63,000 with accrued interest of $97,000. No other convertible notes are issued by th company.
Director Independence
Our director may not be considered “independent”
in accordance with rule 4200(a)(15) of the NASDAQ Marketplace Rules. We are not currently traded on NASDAQ and are therefore not required
to comply with the NASDAQ Marketplace Rules.
Item 14. Principal
Accounting Fees and Services
Audit Related Fees
There were no fees billed in the fiscal years
reported in this Comprehensive 10-K for professional services rendered for audit-related services.
Tax Fees
There were no fees billed in the fiscal years
reported in this Comprehensive 10-K for professional services rendered for tax compliance, tax advice, or tax planning.
All Other Fees
There were no other fees billed in the fiscal
years reported in this Comprehensive 10-K for products and services other than the services reported above.
Audit Committee’s Pre-Approval Practice
We do not have a separate audit committee. Our
full board of directors performs the functions of an audit committee.
PART IV
Item 15. Exhibit and Financial Statement
Schedules.
(a) FINANCIAL
STATEMENTS.
The
financial statements and financial statement schedules filed as part of this Registration Statement are on page F-1 of
this Form 10.
(b) EXHIBITS.
The following exhibits are included as part of this report:
| Exhibit No. |
Description |
| 3.1* |
Articles of Incorporation with all amendments |
| 3.2* |
By-Laws |
| 3.3* |
Certificate of Designation Series A Preferred Stock |
_____________
* To be filed by amendment
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange
Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
SPORTSQUEST, INC |
| |
|
|
| Dated: August 29, 2023 |
|
|
| |
|
|
| |
By: |
/s/ Irina Veselinovic |
| |
Irina Veselinovic
Chief Executive Officer and Chief Operational Officer
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer) |
Pursuant to the requirements of the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
| Name |
|
Position |
|
Date |
| |
|
|
|
|
| /s/ Zoran Cvetojevic |
|
Chairman of the Board of Directors |
|
August 29, 2023 |
|
Zoran Cvetojevic |
|
|
|
|
SPORTSQUEST, INC.
Index to the Financial Statements
Audited Report & Financial Statements for the Period ended June 30, 2023
Audited Report & Financial Statements for the Period ended March 31, 2023
Audited Report & Financial Statements for the year ended December 31, 2022 and 2021
SPORTSQUEST, INC.
CONSOLIDATED BALANCE SHEETS
| | |
As of June 30, 2023 | | |
As of Dec 31, 2022 | |
| ASSETS | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash and Bank | |
$ | 1,882 | | |
$ | 2,207 | |
| Interest Receivable | |
| – | | |
| – | |
| Dues from related party | |
| – | | |
| – | |
| Total current assets | |
| 1,882 | | |
| 2,207 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 1,882 | | |
$ | 2,207 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Convertible notes payable | |
$ | 146,612 | | |
$ | 130,973 | |
| Accrued Interest Payable | |
| 107,218 | | |
| 101,235 | |
| | |
| | | |
| | |
| Total current liabilities | |
| 253,830 | | |
| 232,208 | |
| | |
| | | |
| | |
| Total other liabilities | |
| – | | |
| – | |
| | |
| | | |
| | |
| TOTAL LIABILITIES | |
| 253,830 | | |
| 232,208 | |
| | |
| | | |
| | |
| Stockholders' Equity | |
| | | |
| | |
| Common stock, par value $0.0001 - authorized 5,000,000,000 shares 4,178,763,151 and 4,178,763,151 shares issued and outstanding as of June 30, 2023 and 2022 respectively | |
| 417,876 | | |
| 417,876 | |
| Additional paid-in-capital | |
| 2,370,488 | | |
| 2,370,488 | |
| Accumulated deficit | |
| (3,040,312 | ) | |
| (3,018,365 | ) |
| Net Income | |
| | | |
| | |
| TOTAL STOCKHOLDERS' EQUITY | |
| (251,948 | ) | |
| (230,001 | ) |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | |
$ | 1,882 | | |
$ | 2,207 | |
The accompanying notes are an integral part
of these consolidated financial statements
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
June, 2023 | | |
June, 2022 | |
| Operating Revenue: | |
| | | |
| | |
| Revenue | |
$ | – | | |
$ | – | |
| Total revenue | |
| – | | |
| – | |
| | |
| | | |
| | |
| Operating Expenses: | |
| | | |
| | |
| Bank Charges | |
| 45 | | |
| 73 | |
| Miscellaneous Expense | |
| – | | |
| 817 | |
| Subscription & Dues | |
| – | | |
| 170 | |
| Rentals | |
| – | | |
| 7,500 | |
| Transportation and Travels | |
| – | | |
| 11,394 | |
| Hotel and Accommodation | |
| 3,310 | | |
| 8,378 | |
| Telecommunication | |
| 2,434 | | |
| 1,498 | |
| Consulting Services | |
| 10,175 | | |
| 2,250 | |
| Interest Expense | |
| 5,983 | | |
| 30,403 | |
| Total operating expenses | |
| 21,947 | | |
| 62,482 | |
| | |
| | | |
| | |
| Loss from operations | |
| (21,947 | ) | |
| (62,482 | ) |
| | |
| | | |
| | |
| Other Income (expenses) | |
| | | |
| | |
| Interest Income | |
| – | | |
| – | |
| Gain/(Loss) from disposal of assets | |
| – | | |
| – | |
| Misc. receivables written off | |
| – | | |
| – | |
| Misc. payables written off | |
| – | | |
| – | |
| Gain/(Loss) from settlement/debt extinguishment | |
| – | | |
| – | |
| Total other income/(expense) | |
| – | | |
| – | |
| | |
| | | |
| | |
| Net Income/ loss | |
$ | (21,947 | ) | |
$ | (62,482 | ) |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY
| | |
Common stock | | |
Additional
Paid-in | | |
Accumulated | | |
| |
| Description | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance – Balance 1, 2022 | |
| 1,244,783,961 | | |
$ | 124,478 | | |
$ | 2,663,886 | | |
$ | (2,893,401 | ) | |
$ | (105,037 | ) |
| Common stock issued | |
| 2,933,979,190 | | |
| 293,398 | | |
| – | | |
| – | | |
| 293,398 | |
| Additional paid in capital | |
| – | | |
| – | | |
| (293,398 | ) | |
| – | | |
| (293,398 | ) |
| Net (loss) | |
| – | | |
| – | | |
| – | | |
| (3,018,365 | ) | |
| (3,018,365 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – December 30, 2022 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,018,365 | ) | |
$ | (230,001 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – Balance 1, 2023 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,018,365 | ) | |
$ | (230,001 | ) |
| Additional paid in capital | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Net (loss) | |
| – | | |
| – | | |
| – | | |
| (21,947 | ) | |
| (21,947 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – June 30, 2023 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,040,312 | ) | |
$ | (240,832 | ) |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
Period Ended | | |
Period Ended | |
| | |
June 30, 2023 | | |
June 30, 2022 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net loss from continuing operations attributable to common stockholders | |
$ | (21,947 | ) | |
$ | (62,482 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Preferred stock issued for services | |
| – | | |
| – | |
| Changes in: | |
| | | |
| | |
| Interest Receivables | |
| – | | |
| – | |
| Due from related party | |
| – | | |
| – | |
| Due to related party & Interest Payable | |
| 5,983 | | |
| 30,403 | |
| Net cash used in operating activities | |
| (15,964 | ) | |
| (32,079 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities | |
| | | |
| | |
| License agreements | |
| – | | |
| – | |
| Security deposits | |
| – | | |
| – | |
| Net cash used in investing activities | |
| – | | |
| – | |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Convertible note payable | |
| 15,640 | | |
| 33,183 | |
| Additional paid in capital | |
| – | | |
| (146,699 | ) |
| Common share | |
| – | | |
| 146,699 | |
| Net cash provided by financing activities | |
| 15,640 | | |
| 33,182 | |
| | |
| | | |
| – | |
| Net increase in cash | |
| (325 | ) | |
| 1,103 | |
| | |
| | | |
| | |
| Cash, beginning of period | |
| 2,207 | | |
| – | |
| Cash, end of period | |
$ | 1,882 | | |
$ | 1,103 | |
The accompanying notes are an integral
part of these consolidated financial statements.
SPORTSQUEST, INC.
NOTES TO JUNE 30, 2023, AND 2022
CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Organization and Operations
Sportsquest Inc., a Delaware corporation, (the
“Company”) was formed under the laws of the State of Delaware on April 3, 1986. Office address is located at 500 S Australian
Ave, 600 West Palm Beach FI 33401 USA.
The Sportsquest business was created to develop,
own and manage high end sports events and their operating entities, as well as executing a growth strategy involving acquisition of diverse
and effective sports marketing platforms. SportsQuest was incorporated in April 3, 1986 in Delaware under the name Bay Head Ventures,
Inc. The Company has been managing the US Pro Golf Tour and anticipates it will continue to manage USPGT for the foreseeable future. SportsQuest
trades on the Pink Sheets under “SPQS.PK”. SportsQuest holds significant value in content media and is refocusing is business
model.
Note 2 – Summary of Significant Accounting
Policies
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principle of consolidation
The accompanying consolidated financial statements
include only the accounts of the parent company Company as of June 30, 2023 and 2022.
Use of Estimates and Assumptions and Critical
Accounting Estimates and Assumptions
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial
statements and the reported amounts of revenues and expenses during the reporting period(s).Critical accounting estimates are estimates
for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain
matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance
is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:
| |
(i) |
Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. |
These significant accounting estimates or assumptions
bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates
or assumptions are difficult to measure or value.
Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates
utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After
such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of
the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States
of America (U.S. GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements
and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques
used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted)
in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value
hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1 |
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 |
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 |
|
Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their
fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable.
The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amount of the Company’s
financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair value
because of the short maturity of those instruments.
Transactions involving related parties cannot
be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not
exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated
on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less to be cash and cash equivalents.
Property and Equipment
Property and equipment are recorded at cost. Expenditures
for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is calculated
using the straight-line method over the estimated useful lives, which range from five (5) Periods for computer equipment to seven (7)
Periods for office furniture. Upon sale or retirement of office equipment, the related cost and accumulated depreciation are removed from
the accounts and any gain or loss is reflected in statements of operations. As of June 30, 2023 and 2022 the company has no investment
in Property and equipment
Related Parties
The Company follows subtopic 850-10 of the FASB
Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to
Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.
other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures
of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary
course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required
in those statements.
The disclosures shall include: a. the nature of
the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which
income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding
period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB
Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements
are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to
occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate
of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position, results
of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
Revenue Recognition
The Company applies paragraph 605-10-S99-1 of
the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and
earned.
The Company considers revenue realized or realizable
and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped
or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably
assured.
The Company derives its revenues from sales contracts
with its customers with revenues being generated upon rendering of services. Persuasive evidence of an arrangement is demonstrated via
invoice; service is considered provided when the service is delivered to the customers; and the sales price to the customer is fixed upon
acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive.
A right of return exists for customers’
retainers that were received prior to commencement of services. If a customer cancels a service contract subsequent to the commencement
date, the customer is entitled to a refund, except for services already provided.
Income Tax Provision
The Company accounts for income taxes under Section
740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns.
Under this method, deferred tax assets and liabilities
are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect
for the Period in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the Periods in which those temporary differences are expected to be recovered
or settled.
The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted the provisions of paragraph
740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized
upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company
operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate
provisions for income taxes have been made for all Periods. If actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
Uncertain Tax Positions
The Company did not take any uncertain tax positions
and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at June 30, 2023 and 2022.
Earnings per Share
Earnings Per Share is the amount of earnings attributable
to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. Earnings per share (“EPS”)
is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through
260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number
of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting
both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative
preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also
from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued
during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement,
stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through
260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security
holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected
in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8
through 55-11 require that another method be applied.
Equivalents of options and warrants include non-vested
stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23).
Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury
stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and
common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the
average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference
between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted
EPS computation.
There were no potentially debt or equity instruments
issued and outstanding at any time during the Periods ended June 30, 2023 and 2022.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of
the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem
from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation
method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net
cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the
effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts
and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports
the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the
effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and
ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting
in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Subsequent Events
The Company follows the guidance in Section 855-10-50
of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through
the date when the financial statements were issued and has determined to disclose the underlisted events
| 1. | On January 19th 2023 SportsQuest, Inc signed a convertible loan agreement with Worldways International
Network Corporation and obtained a loan of $2,000 with 3 Periods maturity form the date of the agreement |
| 2. | On January 20th 2023 SportsQuest, Inc signed a convertible loan agreement with Zoran Cvetojevic
an individual located at Vladimira Rolovica 158, Sebia and obtained a loan of $67,500 with 3 Periods maturity form the date of the agreement |
| 3. | On April 4th, 2023 SportsQuest, Inc signed a convertible loan agreement with Zecevic M Custom
Management a company located at 15711 Grove Ln, Wellington, FL 33414, USA and obtained a loan of $3,500 with 3 Periods maturity form the
date of the agreement |
| 4. | On June 30th, 2023 SportsQuest, Inc signed a convertible loan agreement with Emry Capital Group
a company located at 500 S Australian Ave., West Palm Beach FL 33401 USA and obtained a loan of $3,000 with 3 Periods maturity form the
date of the agreement |
SPORTSQUEST, INC.
CONSOLIDATED BALANCE SHEETS
| | |
As of March 31, 2023 | | |
As of Dec 31, 2022 | |
| ASSETS | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash and Bank | |
$ | 2,562 | | |
$ | 2,207 | |
| Interest Receivable | |
| – | | |
| – | |
| Dues from related party | |
| – | | |
| – | |
| Total current assets | |
| 2,562 | | |
| 2,207 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 2,562 | | |
$ | 2,207 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Convertible notes payable | |
$ | 140,473 | | |
$ | 130,973 | |
| Accrued Interest Payable | |
| 102,921 | | |
| 101,235 | |
| | |
| | | |
| | |
| Total current liabilities | |
| 243,394 | | |
| 232,208 | |
| | |
| | | |
| | |
| Total other liabilities | |
| – | | |
| – | |
| | |
| | | |
| | |
| TOTAL LIABILITIES | |
| 243,394 | | |
| 232,208 | |
| | |
| | | |
| | |
| Stockholders' Equity | |
| | | |
| | |
| Common stock, par value $0.0001 - authorized 5,000,000,000 shares 4,178,763,151 and 4,178,763,151 shares issued and outstanding as of March 31, 2023 and 2022 respectively | |
| 417,876 | | |
| 417,876 | |
| Additional paid-in-capital | |
| 2,370,488 | | |
| 2,370,488 | |
| Accumulated deficit | |
| (3,029,196 | ) | |
| (3,018,365 | ) |
| Net Income | |
| | | |
| | |
| TOTAL STOCKHOLDERS' EQUITY | |
| (240,832 | ) | |
| (230,001 | ) |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | |
$ | 2,562 | | |
$ | 2,207 | |
The accompanying notes are an integral part
of these consolidated financial statements
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
PERIOD ENDED MARCH, 2023 (Unaudited) | | |
PERIOD ENDED MARCH, 2022 (Unaudited) | |
| Operating revenue: | |
| | | |
| | |
| Revenue | |
$ | – | | |
$ | – | |
| Total revenue | |
| – | | |
| – | |
| | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | |
| Bank Charges | |
| 5 | | |
| 36 | |
| Miscelleneous Expense | |
| – | | |
| 408 | |
| Subscription & Dues | |
| – | | |
| 85 | |
| Rentals | |
| – | | |
| 3,750 | |
| Transportation and Travels | |
| – | | |
| 5,697 | |
| Hotel and Accommodation | |
| 914 | | |
| 4,189 | |
| Telecommunication | |
| 1,216 | | |
| 749 | |
| Consulting Services | |
| 7,011 | | |
| 1,125 | |
| Interest Expense | |
| 1,686 | | |
| 15,202 | |
| Total operating expenses | |
| 10,831 | | |
| 31,241 | |
| | |
| | | |
| – | |
| Loss from operations | |
| (10,831 | ) | |
| (31,241 | ) |
| | |
| | | |
| | |
| Other Income (expenses) | |
| | | |
| | |
| Interest Income | |
| – | | |
| – | |
| Gain/(Loss) from disposal of assets | |
| – | | |
| – | |
| Misc. receivables written off | |
| – | | |
| – | |
| Misc. payables written off | |
| – | | |
| – | |
| Gain/(Loss) from settlement/debt extinguishment | |
| – | | |
| – | |
| Total other income/(expense) | |
| – | | |
| – | |
| | |
| | | |
| | |
| Net Income/ loss | |
$ | (10,831 | ) | |
$ | (31,241 | ) |
| | |
| | | |
| | |
| Earnings per share | |
| | | |
| | |
| Basic | |
$ | (0.0561 | ) | |
$ | – | |
| Diluted | |
$ | (0.0561 | ) | |
$ | – | |
| | |
| | | |
| | |
| Weighted average number of common shares - Basic | |
$ | 2,228,763 | | |
$ | 557,191 | |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY
| | |
Common stock | | |
Additional
Paid-in | | |
Accumulated | | |
| |
| Description | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance – Balance 1, 2022 | |
| 1,244,783,961 | | |
$ | 124,478 | | |
$ | 2,663,886 | | |
$ | (2,893,401 | ) | |
$ | (105,037 | ) |
| Common stock issued | |
| 2,933,979,190 | | |
| 293,398 | | |
| – | | |
| – | | |
| 293,398 | |
| Additional paid in capital | |
| – | | |
| – | | |
| (293,398 | ) | |
| – | | |
| (293,398 | ) |
| Net (loss) | |
| – | | |
| – | | |
| – | | |
| (3,018,365 | ) | |
| (3,018,365 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – December 30, 2022 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,018,365 | ) | |
$ | (230,001 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – Balance 1, 2023 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,018,365 | ) | |
$ | (230,001 | ) |
| Additional paid in capital | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
| Net (loss) | |
| – | | |
| – | | |
| – | | |
| (10,831 | ) | |
| (10,831 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – March 30, 2023 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (3,029,196 | ) | |
$ | (240,832 | ) |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
Period Ended | | |
Period Ended | |
| | |
March 31, 2023 | | |
March 31, 2022 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net loss from continuing operations attributable to common stockholders | |
$ | (10,831 | ) | |
$ | (31,241 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Preferred stock issued for services | |
| – | | |
| – | |
| Changes in: | |
| | | |
| | |
| Interest Receivables | |
| – | | |
| – | |
| Due from related party | |
| – | | |
| – | |
| Due to related party & Interest Payable | |
| 1,686 | | |
| 15,202 | |
| Net cash used in operating activities | |
| (9,145 | ) | |
| (16,040 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities | |
| | | |
| | |
| License agreements | |
| – | | |
| – | |
| Security deposits | |
| – | | |
| – | |
| Net cash used in investing activities | |
| – | | |
| – | |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Convertible note payable | |
| 9,500 | | |
| 16,591 | |
| Additional paid in capital | |
| – | | |
| (73,350 | ) |
| Common share | |
| – | | |
| 73,349 | |
| Net cash provided by financing activities | |
| 9,500 | | |
| | |
| | |
| | | |
| | |
| Net increase in cash | |
| 355 | | |
| 552 | |
| | |
| | | |
| | |
| Cash, beginning of period | |
| 2,207 | | |
| – | |
| Cash, end of period | |
$ | 2,562 | | |
$ | 552 | |
The accompanying notes are an integral
part of these consolidated financial statements.
SPORTSQUEST, INC.
NOTES TO MARCH 31, 2023, AND 2022
CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Organization and Operations
Sportsquest Inc., a Delaware corporation, (the
“Company”) was formed under the laws of the State of Delaware on April 3, 1986. Office address is located at 500 S Australian
Ave, 600 West Palm Beach FI 33401 USA.
The Sportsquest business was created to develop,
own and manage high end sports events and their operating entities, as well as executing a growth strategy involving acquisition of diverse
and effective sports marketing platforms. SportsQuest was incorporated in April 3, 1986 in Delaware under the name Bay Head Ventures,
Inc. The Company has been managing the US Pro Golf Tour and anticipates it will continue to manage USPGT for the foreseeable future. SportsQuest
trades on the Pink Sheets under “SPQS.PK”. SportsQuest holds significant value in content media and is refocusing is business
model.
Note 2 – Summary of Significant Accounting
Policies
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principle of consolidation
The accompanying consolidated financial statements
include only the accounts of the parent company Company as of March 31, 2023 and 2022.
Use of Estimates and Assumptions and Critical
Accounting Estimates and Assumptions
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial
statements and the reported amounts of revenues and expenses during the reporting period(s).Critical accounting estimates are estimates
for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain
matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance
is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:
| |
(i) |
Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. |
These significant accounting estimates or assumptions
bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates
or assumptions are difficult to measure or value.
Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates
utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After
such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of
the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States
of America (U.S. GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements
and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques
used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted)
in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value
hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1 |
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 |
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 |
|
Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their
fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable.
The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amount of the Company’s
financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair value
because of the short maturity of those instruments.
Transactions involving related parties cannot
be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not
exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated
on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less to be cash and cash equivalents.
Property and Equipment
Property and equipment are recorded at cost. Expenditures
for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is calculated
using the straight-line method over the estimated useful lives, which range from five (5) Periods for computer equipment to seven (7)
Periods for office furniture. Upon sale or retirement of office equipment, the related cost and accumulated depreciation are removed from
the accounts and any gain or loss is reflected in statements of operations. As of March 31, 2023 and 2022 the company has no investment
in Property and equipment
Related Parties
The Company follows subtopic 850-10 of the FASB
Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to
Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.
other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures
of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary
course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required
in those statements.
The disclosures shall include: a. the nature of
the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which
income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding
period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB
Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements
are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to
occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate
of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position, results
of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
Revenue Recognition
The Company applies paragraph 605-10-S99-1 of
the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and
earned.
The Company considers revenue realized or realizable
and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped
or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably
assured.
The Company derives its revenues from sales contracts
with its customers with revenues being generated upon rendering of services. Persuasive evidence of an arrangement is demonstrated via
invoice; service is considered provided when the service is delivered to the customers; and the sales price to the customer is fixed upon
acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive.
A right of return exists for customers’
retainers that were received prior to commencement of services. If a customer cancels a service contract subsequent to the commencement
date, the customer is entitled to a refund, except for services already provided.
Income Tax Provision
The Company accounts for income taxes under Section
740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns.
Under this method, deferred tax assets and liabilities
are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect
for the Period in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the Periods in which those temporary differences are expected to be recovered
or settled.
The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted the provisions of paragraph
740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized
upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company
operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate
provisions for income taxes have been made for all Periods. If actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
Uncertain Tax Positions
The Company did not take any uncertain tax positions
and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at March 30, 2023 and 2022.
Earnings per Share
Earnings Per Share is the amount of earnings attributable
to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. Earnings per share (“EPS”)
is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through
260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number
of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting
both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative
preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also
from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued
during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement,
stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through
260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security
holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected
in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8
through 55-11 require that another method be applied.
Equivalents of options and warrants include non-vested
stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23).
Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury
stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and
common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the
average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference
between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted
EPS computation.
There were no potentially debt or equity instruments
issued and outstanding at any time during the Periods ended March 30, 2023 and 2022.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of
the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem
from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation
method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net
cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the
effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts
and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports
the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the
effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and
ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting
in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Subsequent Events
The Company follows the guidance in Section 855-10-50
of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through
the date when the financial statements were issued and has determined to disclose the underlisted events
| 1. | On January 19th 2023 SportsQuest, Inc signed a convertible loan agreement with Worldways International
Network Corporation and obtained a loan of $2,000 with 3 Periods maturity form the date of the agreement |
| 2. | On January 20th 2023 SportsQuest, Inc signed a convertible loan agreement with Zoran Cvetojevic
an individual located at Vladimira Rolovica 158, Sebia and obtained a loan of $67,500 with 3 Periods maturity form the date of the agreement |
| 3. | On April 4th, 2023 SportsQuest, Inc signed a convertible loan agreement with Zecevic M Custom
Management a company located at 15711 Grove Ln, Wellington, FL 33414, USA and obtained a loan of $3,500 with 3 Periods maturity form the
date of the agreement |
| 4. | On June 30th, 2023 SportsQuest, Inc signed a convertible loan agreement with Emry Capital Group
a company located at 500 S Australian Ave., West Palm Beach FL 33401 USA and obtained a loan of $3,000 with 3 Periods maturity form the
date of the agreement |
Report of an Independent Registered Public Accounting
Firm
To the shareholders and the board of directors
of SportsQuest, Inc
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of SportsQuest, Inc (the “Company”) as of December 31, 2022, the related consolidated statements
of operations, changes in shareholders’ equity and cash flows, for each of the two years in the period ended December 31,
2022, and the related notes collectively referred to as the “financial statements.
In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2022, and 2021, and the results of its operations
and its cash flows for the year ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
Going Concern
The accompanying financial statements have been
prepared assuming the company will continue as a going concern as disclosed in Note 3 to the financial statement, the Company has continuously
incurred a net loss of $124,964 for the year ended December 31, 2022, and an accumulated deficit of $3,018,365 at December 31, 2022. The
continuation of the Company as a going concern through December 31, 2022, is dependent upon improving the profitability and the continuing
financial support from its stockholders. Management believes the existing shareholders or external financing will provide additional cash
to meet the Company’s obligations as they become due.
These factors raise substantial doubt about the
company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from
the outcome of the uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. The company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion
OLAYINKA
OYEBOLA & CO.
(Chartered Accountants)
We have served as the Company’s auditor
since July 2023.
August 17th, 2023.
Lagos, Nigeria
SPORTSQUEST, INC.
CONSOLIDATED BALANCE SHEETS
| | |
December 31,
2022 | | |
December 31,
2021 | |
| ASSETS | |
| | | |
| | |
| Current Assets: | |
| | | |
| | |
| Cash | |
$ | 2,207 | | |
$ | – | |
| Total Assets | |
$ | 2,207 | | |
$ | – | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDER’S EQUITY(DEFICIT) | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Convertible note payables | |
$ | 130,973 | | |
$ | 64,608 | |
| Accrued interest | |
| 101,235 | | |
| 40,429 | |
| Total Liabilities | |
| 232,208 | | |
| 105,037 | |
| | |
| | | |
| | |
| Commitments and Contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Stockholders’ Equity: | |
| | | |
| | |
| Common stock, par value $0.001, 5,000,000,000 shares authorized; 4,178,763,151 and 1,244,783,961 shares issued and outstanding as of December 31, 2022, and 2021 respectively | |
| 417,876 | | |
| 124,478 | |
| Additional paid-in capital | |
| 2,370,488 | | |
| 2,663,886 | |
| Accumulated deficit | |
| (3,018,365 | ) | |
| (2,893,401 | ) |
| Total stockholders’ equity | |
| (230,001 | ) | |
| (105,037 | ) |
| Total Liabilities and Stockholder’s Equity | |
$ | 2,207 | | |
$ | – | |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
Year Ended
December 31, 2022 | | |
Year Ended
December 31, 2021 | |
| | |
| | |
| |
| Revenue | |
$ | – | | |
$ | – | |
| Cost of revenue | |
| – | | |
| – | |
| Gross profit | |
| – | | |
| – | |
| | |
| | | |
| | |
| Operating Expenses: | |
| | | |
| | |
| General and administrative | |
| 64,158 | | |
| – | |
| Total operating expenses | |
| 64,158 | | |
| – | |
| Income (Loss) from Operations | |
| (64,158 | ) | |
| – | |
| Other Income/(expense) | |
| | | |
| | |
| Interest expense | |
| (60,806 | ) | |
| (40,429 | ) |
| Income (loss) before income tax provision | |
| (124,964 | ) | |
| (40,429 | ) |
| Income tax provision | |
| – | | |
| – | |
| Net Income (Loss) | |
$ | (124,964 | ) | |
$ | (40,429 | ) |
| | |
| | | |
| | |
| Net Loss Per Common Share: | |
| | | |
| | |
| Net Loss per common share - Basic and Diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| | |
| | | |
| | |
| Outstanding - Basic and Diluted | |
| 4,178,763,151 | | |
| 1,244,783,961 | |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY
| | |
Common stock | | |
Additional
Paid-in | | |
Accumulated | | |
| |
| Description | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance – January 1, 2020 | |
| 1,244,783,961 | | |
$ | 124,478 | | |
$ | 2,663,886 | | |
$ | (2,852,972 | ) | |
$ | (64,608 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net loss for the year ended | |
| – | | |
| – | | |
| – | | |
| (40,429 | ) | |
| (40,429 | ) |
| Balance – December 31, 2021 | |
| 1,244,783,961 | | |
$ | 124,478 | | |
$ | 2,663,886 | | |
$ | (2,893,401 | ) | |
$ | (105,037 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – Balance 1, 2022 | |
| 1,244,783,961 | | |
$ | 124,478 | | |
$ | 2,663,886 | | |
$ | (2,893,401 | ) | |
$ | (105,037 | ) |
| Common stock issued | |
| 2,933,979,190 | | |
| 293,398 | | |
| – | | |
| – | | |
| 293,398 | |
| Additional paid in capital | |
| – | | |
| – | | |
| (293,398 | ) | |
| – | | |
| (293,398 | ) |
| Net (loss) | |
| – | | |
| – | | |
| – | | |
| (3,018,365 | ) | |
| (3,018,365 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance – December 30, 2022 | |
| 4,178,763,151 | | |
$ | 417,876 | | |
$ | 2,370,488 | | |
$ | (250,779 | ) | |
$ | (230,001 | ) |
The accompanying notes are an integral part
of these consolidated financial statements.
SPORTSQUEST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
Year Ended
December 30, 2022 | | |
Year Ended
December 30, 2021 | |
| Operating Activities: | |
| | | |
| | |
| Net loss | |
$ | (52,857 | ) | |
$ | (40,429 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Interest payable | |
| 60,806 | | |
| 40,429 | |
| | |
| | | |
| | |
| Net Cash Provided (Used) by Operating Activities | |
| (64,158 | ) | |
| – | |
| | |
| | | |
| | |
| Investing Activities: | |
| | | |
| | |
| Acquisition of property and equipment | |
| – | | |
| – | |
| Acquisition of software | |
| – | | |
| – | |
| Net Cash Used in Investing Activities | |
| – | | |
| – | |
| | |
| | | |
| | |
| Financing Activities: | |
| | | |
| | |
| Convertible note payable | |
| 66,365 | | |
| 64,608 | |
| Additional paid in capital | |
| (293,398 | ) | |
| (64,608 | ) |
| | |
| 293,398 | | |
| – | |
| Net Cash Provided by Financing Activities | |
| 66,365 | | |
| – | |
| | |
| | | |
| | |
| Net Change in Cash | |
| 2,207 | | |
| – | |
| Cash - Beginning of Period | |
| – | | |
| – | |
| Cash - End of Period | |
$ | 2,207 | | |
$ | – | |
| | |
| | | |
| | |
| Cash paid during the period for: | |
| | | |
| | |
| Interest | |
$ | – | | |
$ | – | |
| Income tax paid | |
$ | – | | |
$ | – | |
The accompanying
notes are an integral part of these consolidated financial statements.
SPORTSQUEST, INC.
NOTES TO DECEMBER 31, 2022, AND 2021
CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Organization and Operations
Sportsquest Inc., a Delaware corporation, (the
“Company”) was formed under the laws of the State of Delaware on April 3, 1986. Office address is located at 15711 Cedar Grove
LN, Wellington, Florida 3344-6312.
The Sportsquest business was created to develop,
own and manage high end sports events and their operating entities, as well as executing a growth strategy involving acquisition of diverse
and effective sports marketing platforms. SportsQuest was incorporated in April 3, 1986 in Delaware under the name Bay Head Ventures,
Inc. The Company has been managing the US Pro Golf Tour and anticipates it will continue to manage USPGT for the foreseeable future. SportsQuest
trades on the Pink Sheets under “SPQS.PK”. SportsQuest holds significant value in content media and is refocusing is business
model.
Note 2 – Summary of Significant Accounting
Policies
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principle of consolidation
The accompanying consolidated financial statements
include only the accounts of the parent company Company as of December 31, 2022 and 2021.
Use of Estimates and Assumptions and Critical
Accounting Estimates and Assumptions
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial
statements and the reported amounts of revenues and expenses during the reporting period(s).Critical accounting estimates are estimates
for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain
matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance
is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:
| |
(i) |
Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. |
These significant accounting estimates or assumptions
bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates
or assumptions are difficult to measure or value.
Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates
utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After
such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of
the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States
of America (U.S. GAAP), and expands disclosures about fair value measurements.
To increase consistency and comparability in fair value measurements
and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques
used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted)
in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value
hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1 |
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 |
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 |
|
Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their
fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable.
The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amount of the Company’s
financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair value
because of the short maturity of those instruments.
Transactions involving related parties cannot
be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not
exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated
on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less to be cash and cash equivalents.
Property and Equipment
Property and equipment are recorded at cost. Expenditures
for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is calculated
using the straight-line method over the estimated useful lives, which range from five (5) years for computer equipment to seven (7) years
for office furniture. Upon sale or retirement of office equipment, the related cost and accumulated depreciation are removed from the
accounts and any gain or loss is reflected in statements of operations. As of December 31, 2022 and 2021 the company has no investment
in Property and equipment
Related Parties
The Company follows subtopic 850-10 of the FASB
Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to
Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.
other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures
of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary
course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required
in those statements.
The disclosures shall include: a. the nature of
the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which
income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding
period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB
Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements
are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to
occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate
of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position, results
of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
Revenue Recognition
The Company applies paragraph 605-10-S99-1 of
the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and
earned.
The Company considers revenue realized or realizable
and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped
or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably
assured.
The Company derives its revenues from sales contracts
with its customers with revenues being generated upon rendering of services. Persuasive evidence of an arrangement is demonstrated via
invoice; service is considered provided when the service is delivered to the customers; and the sales price to the customer is fixed upon
acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive.
A right of return exists for customers’
retainers that were received prior to commencement of services. If a customer cancels a service contract subsequent to the commencement
date, the customer is entitled to a refund, except for services already provided.
Income Tax Provision
The Company accounts for income taxes under Section
740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns.
Under this method, deferred tax assets and liabilities
are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled.
The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted the provisions of paragraph
740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized
upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company
operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate
provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
Uncertain Tax Positions
The Company did not take any uncertain tax positions
and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at December 30, 2022 and 2021.
Earnings per Share
Earnings Per Share is the amount of earnings attributable
to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. Earnings per share (“EPS”)
is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through
260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number
of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting
both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative
preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also
from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued
during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement,
stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through
260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security
holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected
in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8
through 55-11 require that another method be applied.
Equivalents of options and warrants include non-vested
stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23).
Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury
stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and
common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the
average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference
between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted
EPS computation.
There were no potentially debt or equity instruments
issued and outstanding at any time during the years ended December 30, 2022 and 2021.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of
the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem
from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation
method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net
cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the
effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts
and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports
the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the
effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and
ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting
in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Subsequent Events
The Company follows the guidance in Section 855-10-50
of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through
the date when the financial statements were issued and has determined to disclose the underlisted events
| 1. | On January 19th 2023 SportsQuest, Inc signed a convertible loan agreement with Worldways International
Network Corporation and obtained a loan of $2,000 with 3 years maturity form the date of the agreement |
| 2. | On January 20th 2023 SportsQuest, Inc signed a convertible loan agreement with Zoran Cvetojevic
an individual located at Vladimira Rolovica 158, Sebia and obtained a loan of $67,500 with 3 years maturity form the date of the agreement |
| 3. | On April 4th, 2023 SportsQuest, Inc signed a convertible loan agreement with Zecevic M Custom
Management a company located at 15711 Grove Ln, Wellington, FL 33414, USA and obtained a loan of $3,500 with 3 years maturity form the
date of the agreement |
| 4. | On June 30th, 2023 SportsQuest, Inc signed a convertible loan agreement with Emry Capital Group
a company located at 500 S Australian Ave., West Palm Beach FL 33401 USA and obtained a loan of $3,000 with 3 years maturity form the
date of the agreement |
SportsQuest (PK) (USOTC:SPQS)
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