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<SEC-DOCUMENT>0001014897-10-000051.txt : 20100406
<SEC-HEADER>0001014897-10-000051.hdr.sgml : 20100406
<ACCEPTANCE-DATETIME>20100406110313
ACCESSION NUMBER: 0001014897-10-000051
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20091231
FILED AS OF DATE: 20100406
DATE AS OF CHANGE: 20100406
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DALE JARRETT RACING ADVENTURE INC
CENTRAL INDEX KEY: 0001094032
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389]
IRS NUMBER: 593564984
STATE OF INCORPORATION: FL
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-27251
FILM NUMBER: 10733441
BUSINESS ADDRESS:
STREET 1: 1313 10TH AVENUE LANE, SE
CITY: HICKORY
STATE: NC
ZIP: 28602
BUSINESS PHONE: 8884672231
MAIL ADDRESS:
STREET 1: 1313 10TH AVENUE LANE, SE
CITY: HICKORY
STATE: NC
ZIP: 28602
FORMER COMPANY:
FORMER CONFORMED NAME: JARRETT FAVRE DRIVING ADVENTURE INC
DATE OF NAME CHANGE: 19990827
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>dalejarrett10k09.txt
<DESCRIPTION>FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009
<TEXT>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2009
OR
[ ] 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 000-27251
DALE JARRETT RACING ADVENTURE, INC.
(Exact name of registrant in its charter)
FLORIDA 59-3564984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1313 10TH Avenue Lane, SE
Hickory, NC 28602
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (888) 467-2231
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Stock, $.0001 par value
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act
Yes [ ] No [x]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.406 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [x] No [ ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or such shorter period that Dale the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the part 90 days.
Yes [x] No[ ]
<PAGE>2
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained hereof, and will not be
contained, to will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of "large accelerated filer,"
"accelerated file" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter. The market
value of the registrant's voting $.0001 par value common stock held by
non-affiliates of the registrant was approximately $698,651.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number
of shares outstanding of the registrant's only class of common stock, as
of March 15, 2010 was 24,510,502 shares of its $.0001 par value common
stock.
No documents are incorporated into the text by reference.
<PAGE>3
Dale Jarrett Racing Adventure, Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2009
Table of Contents
Part I
ITEM 1. BUSINESS 4
ITEM 1A. RISK FACTORS 6
ITEM 1B. UNRESOLVED STAFF COMMENTS 6
ITEM 2. PROPERTIES 7
ITEM 3. LEGAL PROCEEDINGS 7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7
Part II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES 8
ITEM 6. SELECTED FINANCIAL DATA 9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK 13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 14
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 32
ITEM 9A. CONTROLS AND PROCEDURES 32
ITEM 9B. OTHER INFORMATION 33
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT 34
ITEM 11. EXECUTIVE COMPENSATION 36
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS 38
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE 39
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 40
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 41
<PAGE>4
PART I
ITEM 1. BUSINESS
The registrant was formed as a C corporation and incorporated November
24, 1998. The registrant is currently not involved with any
proceedings, bankruptcy or receiverships.
The registrant offers entertainment based oval driving schools and
events. These classes are conducted at various racetracks throughout
the country.
The registrant completed its first driving classes in Rockingham, NC
July of 1999. Since July 4th, 1999, the registrant has run classes at
over forty NASCAR tracks.
The registrant currently owns fifteen (15) race cars. These race cars
are classified as stock cars and are equipped for oval or round tracks
only. They are fully loaded with race engines, six (6) point harnesses,
neck and head restraints, communications, track specific gears and
complete safety cages.
The registrant has negotiated terms with over forty (40) racetracks
where, for a fee ranging from $0 to $10,000 a day, we can rent their
tracks.
On October 29, 2008, the registrant introduced its new World War II
Adventure. Participants receive a three day opportunity to relive the
experience of a B-17 aviator heading out on a bombing mission over enemy
territory. Our debut adventure was February 27-March 1, 2009.
Products and Services. The registrant offers five(5) types of ride or
drive programs for individuals and corporations. The "Qualifier" is a
three(3) lap ride with a professional driver which lasts about five(5)
minutes, depending on the length of the track. The "Season Opener" is a
half day training class culminating in the student driving for ten(10)
laps. The "Rookie Adventure" and "Happy Hour" are also half day driving
classes with the students driving twenty(20) or thirty(30) laps
respectively. The "Advanced Stock Car Adventure" is a full day sixty
(60) lap class.
The operation is similar to that of a traveling show in that we
transport the stock cars, the mechanics, the sales staff and the
instructors from event to event.
The main purpose of each event is the thrill of actually driving the
race car.
The registrant's objective is to utilize this first "hub" of fifteen
(15) race cars on the east coast to their full potential. It is in the
registrant's plans that once this first hub becomes utilized at least
fifteen(15) days per month and is profitable, to then add another "hub"
on the West Coast. This would entail the purchase of another ten(10)
race cars and the support equipment necessary to maintain them.
<PAGE>5
The registrant has fifteen (15) stock cars, which had an original
purchase price of approximately $50,000 per car. Parts are nominal due
to the lack of any sustained stress on the cars, approximately $10,000
per month per site. Staffing costs are approximately $20,000 per month
at each active "hub". The registrant owns a Miller Semi Tractor Trailer
to haul the cars from track to track. The transporting of staff to the
event and their food and lodging costs average $4,000 per day. The
registrant is required to maintain a minimum of five million
dollars($5,000,000) of liability insurance, worker's compensation and
property and casualty insurance.
The registrant also offers a number of add-on sale items including CDs
from its Adventure Cam located in the car, clothing, souvenirs and
photography.
The registrant also offers a World War II Adventure. Participants
receive a three day opportunity to relive the experience of a B-17
aviator heading out on a bombing mission over enemy territory.
Vendor Agreement. During 2009, the registrant entered into an agreement
with a vendor, who provides video equipment and video recording
services, which enables the registrant to sell video recordings to its
customers. Under the agreement, the registrant is entitled to a 60%
allocation of revenue for all video products and services sold. The
agreement is through December 31, 2011 and is renewable annually
thereafter.
Marketing. The registrant offers its products and services at various
tracks throughout the country. The registrant employs a marketing
director. This individual is primarily responsible with closing the
prospects created through promotion. These services will be sold as
corporate outings and directly to the public through various marketing
and advertising mediums with an emphasis on radio and the Internet.
Promotional and Licensing Agreements. In December 1998, the registrant
entered into promotional and licensing agreements with Dale Jarrett, Ned
Jarrett, Glenn Jarrett, Jason Jarrett and Brett Favre whereby these
individuals have granted the registrant the use of their names and
likeliness in advertising, products and promotional materials, as well
as an agreed upon number of appearances per year and an agreed upon
number of radio and/or television commercials as set out in each
agreement. Ned Jarrett is the father of Dale Jarrett and Glenn Jarrett.
Dale Jarrett is the father of Jason Jarrett.
Pursuant to these agreements, the registrant had issued an aggregate of
5,500,000 Common Shares of the registrant. The term of each agreement
was Ten (10) years and expired in December 2008. These individuals have
verbally agreed to continue their relationship with the registrant
without a written agreement and will be compensated for future services
only when they are rendered.
<PAGE>6
The unearned services under the promotional and licensing agreements
aggregated $25,000 at December 31, 2008 and is classified as a reduction
of stockholders' equity. Services charged to expense during the year
ended December 31, 2008 amounted to $ $25,000. The services were charged
to expense ratably over the terms of the agreements.
Competition. The driving schools industry is currently experiencing a
limited degree of competition with regard to availability, price,
service, quality and location. There is one well-established market
leader (Richard Petty Driving Experience) that is nationally recognized
and which possess substantially greater financial, marketing personnel
and other resources than the registrant. There are also a small number
of local or regional schools. Virtual reality driving experiences are
also becoming more and more realistic and therefore a growing
competitor. It is also likely that other competitors will emerge in
the near future. There is no assurance that the registrant will compete
successfully with other established driving schools. The registrant
shall compete on the basis of availability, price, service, quality and
location. Inability to compete successfully might result in increased
costs, reduced yields and additional risks to the investors herein.
Employees. The registrant employs seven full time employees responsible
for securing the Driving Adventure locations, procurement of equipment,
racecars, and the development and implementation of the registrant's
marketing plan. Each active location has up to 25 contract personnel
including but not limited to a mechanic, four to ten driving
instructors, two administrators, a flagman and a site manager.
Additional employees and/or independent contractors will be obtained as
required.
Seasonal Nature of Business Activities. The registrant's operations
have shown to be seasonal partly because some track locations may only
operate on certain days or certain times of the year. Primarily, this
is due to the weather. It is the registrant's plans to run more tracks
in the south during the winter. The registrant expects a steady
revenue stream in the future.
Government Regulation. The registrant does not currently need any
government approval of our services. The registrant is not aware of
any existing or probable governmental regulations on our business or
industry.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
<PAGE>7
ITEM 2. PROPERTIES
The registrant's executive offices which consist of 1,500 square feet
are located at 1313 10th Avenue Lane, SE, Hickory, North Carolina.
In October 2009, the registrant entered into an operating lease for use
of the offices. The lease requires a monthly payment of $1,830 and
expires in November, 2012. Future minimum payments under this lease
agreement are as follows: $21,960 in 2010, $21,960 in 2011, and $20,130
in 2012.
The registrant's garage which consists of 7,500 square feet is located
at 144 Allred Road, Lincoln, Alabama 35096. The registrant also leases
various office and warehouse space on a month to month basis or under
terms that are less than one year.
Rent expense amounted to $55,800 and $38,765 for the years ended
December 31, 2009 and 2008, respectively.
ITEM 3. LEGAL PROCEEDINGS.
The registrant is a defendant in litigation related to an alleged breach
of contract. The case is currently pending in the circuit court of
Talladega County, Alabama, and there is a possibility of a judgment
against the Company with a range of $25,000 to $50,000. The registrant
is contesting the claim and intends to vigorously defend its position,
and as such, there have been no amounts reflected in the accompanying
financial statements related to this matter.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
<PAGE>8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 5(a)
a) Market Information. The registrant began trading publicly on the
NASD Over the Counter Bulletin Board on June 22, 2000 under the symbol
"DJRT".
The following table sets forth the range of high and low bid quotations
for the registrant's common stock. The quotations represent inter-
dealer prices without retail markup, markdown or commission, and may not
necessarily represent actual transactions.
Quarter Ended High Bid Low Bid
3/31/08 .45 .15
6/30/08 .25 .11
9/30/08 .15 .09
12/31/08 .09 .03
3/31/09 .08 .04
6/30/09 .07 .04
9/30/09 .12 .03
12/31/09 .08 .04
b) Holders. At March 15, 2010, there were approximately 244
shareholders of the registrant.
c) Dividends. Holders of the registrant's common stock are entitled to
receive such dividends as may be declared by its board of directors. No
dividends on the registrant's common stock have ever been paid, and the
registrant does not anticipate that dividends will be paid on its common
stock in the foreseeable future.
d) Securities authorized for issuance under equity compensation plans.
No securities are authorized for issuance by the registrant under equity
compensation plans.
e) Performance graph. Not applicable.
f) Sale of unregistered securities.
During April 2009, the registrant issued 400,000 shares of common stock
to an officer for services valued at $16,000. The value assigned to the
shares issued was based upon the trading value of the registrant's
common stock at the date the shares were authorized by the registrant's
board of directors.
<PAGE>9
Item 5(b) Use of Proceeds. Not applicable.
Item 5(c) Purchases of Equity Securities by the issuer and
affiliated purchasers.
During the months of October through December 2009, the registrant
purchased a total of 294,500 shares of its common stock for cash
aggregating $17,867, which is classified as treasury stock in the
accompanying balance sheet as of December 31, 2009. Subsequent to the
balance sheet date, the registrant purchased an additional 201,250
shares of its common stock for cash aggregating $12,131.
During 2008, the registrant repurchased 855,000 shares of common stock
for cash aggregating $85,500. During January 2009, the registrant
retired 885,000 shares of common stock.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Trends and Uncertainties. Demand for the registrant's products are
dependent on, among other things, general economic conditions which are
cyclical in nature. Inasmuch as a major portion of the registrant's
activities are the receipt of revenues from its driving school services
and products, the registrant's business operations may be adversely
affected by the registrant's competitors and prolonged recessionary
periods.
There are no other known trends, events or uncertainties that have or
are reasonably likely to have a material impact on the corporation's
short term or long term liquidity. Sources of liquidity both internal
and external will come from the sale of the corporation's products as
well as the private sale of the registrant's stock. There are no
material commitments for capital expenditure at this time. There are
no trends, events or uncertainties that have had or are reasonably
expected to have a material impact on the net sales or revenues or
income from continuing operations. There are no significant elements
of income or loss that do not arise from the registrant's continuing
operations. There are no other known causes for any material changes
from period to period in one or more line items of the corporation's
financial statements.
The registrant currently has classes planned through December 2010.
Capital and Source of Liquidity. The registrant currently has no
material commitments for capital expenditures. The registrant has no
plans for future capital expenditures such as additional race cars at
this time.
<PAGE>10
The registrant believes that there will be sufficient capital from
revenues to conduct operations for the next twelve(12) months.
In 2009, the registrant's revenue comprised one hundred(100) percent of
the total cash necessary to conduct operations. Future revenues from
classes and events will determine the amount of additional financing
necessary to continue operations.
The board of directors has no immediate offering plans in place. The
board of directors shall determine the amount and type of financing as
the registrant's financial situation dictates.
For the year ended December 31, 2009, the registrant acquired property
and equipment of $96,381 resulting in net cash used in investing
activities of $96,381.
For the year ended December 31, 2008, the registrant acquired property
and equipment of $286,644 resulting in net cash used in investing
activities of $286,644.
The registrant continues to look for ways to decrease its cash
expenditures and still retain quality management and consultants. On
October 22, 2004, the registrant's board of directors approved the
issuance of options to certain officers and directors and a consultant
for the purchase of 3,500,000 common shares at an exercise price of $.15
per common share for a period of 5 years.
During April 2009, the registrant extended the expiration date of
3,500,000 outstanding options for an additional five years. The
exercise price remained at $.15 per share and the options now expire on
October 21, 2014. The incremental cost of the extension of these options
was $50,000 was charged to stock compensation expense during 2009.
During the years ended December 31, 2009 and 2008, stock option activity
is as follows:
Stock Weighted-average
Options Price per Share
------- ---------------
Outstanding at
Balance at December 31, 2007 4,928,571 $0.15
Expired (1,428,571) $0.14
---------
Balance at December 31, 2008 3,500,000 $0.15
---------
Balance at December 31, 2009 3,500,000 $0.15
=========
At December 31, 2009, the registrant has the following options
outstanding all of which are exercisable:
Exercise price: $0.15; Outstanding: 3,500,000; Contractual life: 4.8
years
<PAGE>11
For the year ended December 31, 2009, the registrant repaid long-term
debt of $28,652. As a result, the registrant had net cash used in
financing activities of $28,652.
For the year ended December 31, 2008, the registrant reduced its
outstanding debt by repaying shareholder advances of $210,922 and long-
term debt of $28,647. For the year ended December 31, 2008, the
registrant redeemed common shares for $85,500. As a result, the
registrant had net cash used in financing activities of $325,069.
On a long term basis, liquidity is dependent on continuation of
operation and receipt of revenues.
Results of Operations. For the year ended December 31, 2009, the
registrant had sales of $2,810,541, which represented a 5% increase over
the 2008 sales of $2,667,526. Cost of sales in 2009 increased 4% to
$1,257,365 from 2008 cost of sales of $1,208,521. This resulted in a 6%
increase in gross profit from $1,459,005 in 2008 to $1,553,176 in 2009.
For the year ended December 31, 2009, the registrant had general and
administrative expenses of $1,692,290. The percentage of general and
administrative expenses to revenues for the year ended December 31, 2009
decreased to 60% from 66% for the year ended December 31, 2009 because
of management's ongoing effort to maintain and/or reduce these types of
expenses.
Plan of Operation. The registrant may experience problems; delays,
expenses and difficulties sometimes encountered by an enterprise in the
registrant's stage, many of which are beyond the registrant's control.
These include, but are not limited to, unanticipated problems relating
to additional costs and expenses that may exceed current estimates and
competition.
Critical Accounting Policies
Revenue Recognition
In general, we record revenue when persuasive evidence of an arrangement
exists, services have been rendered or product delivery has occurred,
the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect
specific criteria for the various revenue streams of the Company:
Revenue is recognized at the time the product is delivered or the
service is performed.
Deferred revenue is recorded for amounts received in advance of the time
at which services are performed and included in revenue at the
completion of the related services. Deferred revenue aggregated
$1,153,313 and $946,469 at December 31, 2009 and 2008, respectively.
<PAGE>12
Property and Equipment
Property and equipment are recorded at cost and are depreciated based
upon estimated useful lives using the straight-line method. Estimated
useful lives range from 3 to 10 years.
Stock-Based Compensation
The registrant records stock based compensation in accordance with FASB
ASC 718, Stock Compensation. ASC 718 requires that the cost resulting
from all share-based transactions be recorded in the financial
statements. It establishes fair value as the measurement objective in
accounting for share-based payment arrangements and requires all
entities to apply a fair-value-based measurement in accounting for
share-based payment transactions with employees. The Statement also
establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-
based payment transactions.
Recent Pronouncements
The following Accounting Standards Codification Updates have been
issued, or will become effective, after the end of the period covered by
this discussion:
Pronouncement Issued Title
ASU No. 2009-13 October 2009 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue
Arrangements - a consensus of
the FASB Emerging Issues Task
Force
ASU No. 2009-14 October 2009 Software (Topic 985): Certain
Revenue Arrangements That
Include Software Elements-a
consensus of the FASB Emerging
Issues Task Force
ASU No. 2009-15 October 2009 Accounting for Own-Share Lending
Arrangements in Contemplation of
Convertible Debt Issuance or
Other Financing
ASU No. 2009-16 December 2009 Transfers and Servicing (Topic
860): Accounting for Transfers
and Financial Assets
ASU No. 2009-17 December 2009 Consolidations (Topic
810): Improvements to Financial
Reporting by Enterprises
Involved with Variable Interest
Entities
ASU No. 2010-01 January 2010 Equity (Topic 505): Accounting
for Distributions to
Shareholders with Components of
Stock and Cash - a consensus of
the FASB Emerging Issues Task
Force
<PAGE>13
ASU No. 2010-02 January 2010 Consolidation (Topic
810): Accounting and Reporting
for Decreases in Ownership of a
Subsidiary - a Scope
Clarification
ASU No. 2012-03 January 2010 Extractive Activities - Oil and
Gas (Topic 932): Oil and Gas
Reserve Estimation and
Disclosures
ASU No. 2010-04 January 2010 Accounting for Various Topics:
Technical Corrections to SEC
Paragraphs
ASU No. 2010-05 January 2010 Compensation - Stock
Compensation (Topic718):
Escrowed Share Arrangements and
the Presumption of Compensation
ASU No. 2010-06 January 2010 Fair Value Measurements and
Disclosures (Topic 820):
Improving Disclosures about Fair
Value Measurements
ASU No. 2010-07 January 2010 Not-for-Profit Entities (Topic
958): Not-for-Profit Entities -
Mergers and Acquisitions
ASU No. 2010-08 February 2010 Technical Corrections to Various
Topics
ASU No. 2010-09 February 2010 Subsequent Events (Topic 855):
Amendments to Certain
Recognition and Disclosure
Requirements
ASU No. 2010-10 February 2010 Consolidation (Topic 810):
Amendments for Certain
Investment Funds
ASU No. 2010-11 March 2010 Derivatives and Hedging (Topic
815): Scope Exceptions Embedded
Credit Derivatives
The registrant has determined that the aforementioned recently issued
accounting standards do not have a material impact on the financial
statements or do not apply to its operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
<PAGE>14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Dale Jarrett Racing Adventure, Inc.
Index to the Financial Statements
Report of Independent Registered Public Accounting Firm 15
Financial Statements of Dale Jarrett Racing Adventure, Inc.:
Balance Sheets as of December 31, 2009 and 2008 16
Statements of Operations For the Years
Ended December 31, 2009 and 2008 17
Statements of Stockholders' Equity (Deficit) For
the Years Ended December 31, 2009 and 2008 18
Statements of Cash Flows For the Years Ended
December 31, 2009 and 2008 20
Notes to Financial Statements 22
<PAGE>15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Dale Jarrett Racing Adventure, Inc.
We have audited the accompanying balance sheets of Dale Jarrett Racing
Adventure, Inc. as of December 31, 2009 and 2008, and the related
statements of operations, stockholders' equity (deficit), and cash flows
for the years ended December 31, 2009 and 2008. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States of America). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Dale Jarrett
Racing Adventure, Inc. as of December 31, 2009 and 2008, and the results
of its operations, and its cash flows for the years ended December 31,
2009 and 2008, in conformity with accounting principles generally
accepted in the United States of America.
Kingery & Crouse, P.A.
Certified Public Accountants
Tampa, Florida
April 6, 2010
<PAGE>16
Dale Jarrett Racing Adventure, Inc.
Balance Sheets
December 31, 2009 and 2008
2009 2008
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $ 544,563 $ 522,695
Accounts receivable 58,484 41,725
Note receivable - 10,000
Spare parts and supplies 149,844 86,204
Prepaid expenses and other current assets 64,494 60,201
---------- ----------
Total current assets 817,385 720,825
---------- ----------
Property and equipment, at cost, net of
accumulated depreciation of $757,747
and $628,355 574,368 604,295
---------- ----------
Other assets 3,600 6,684
---------- ----------
$1,395,353 $1,331,804
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------
Current liabilities:
Current portion of long-term debt $ 23,627 $ 28,634
Accounts payable 152,422 198,121
Accrued expenses 34,026 15,337
Deferred revenue 1,153,313 946,469
---------- ----------
Total current liabilities 1,363,388 1,188,561
---------- ----------
Long-term debt 48,182 71,827
---------- ----------
Stockholders' equity (deficit):
Preferred stock, $.0001 par value,
5,000,000 shares authorized, none issued - -
Common stock, $.0001 par value,
200,000,000 shares authorized, 24,510,502
and 24,995,502 shares issued and 24,216,002
24,995,502 shares outstanding 2,451 2,500
Additional paid-in capital 6,184,480 6,118,431
Treasury Stock, 294,500 shares at cost (17,867) -
Accumulated (deficit) (6,185,281) (6,049,515)
---------- ----------
Total stockholders' equity (deficit) (16,217) 71,416
---------- ----------
$1,395,353 $1,331,804
========== ==========
See accompanying notes to financial statements.
<PAGE>17
Dale Jarrett Racing Adventure, Inc.
Statements of Operations
For The Years Ended December 31, 2009 and 2008
2009 2008
---------- -----------
Sales $2,810,541 $2,667,526
Cost of sales and services 1,257,365 1,208,521
---------- ----------
Gross profit 1,553,176 1,459,005
---------- ----------
General and administrative expenses 1,692,290 1,773,253
---------- ----------
Income (loss) from operations (139,114) (314,248)
Other income and (expense):
Interest income 8,872 19,601
Interest expense - shareholders - (5,312)
Interest expense (5,524) (6,082)
---------- ----------
Loss before taxes (135,766) (306,041)
Income taxes - -
---------- ----------
Net income (loss) $ (135,766) $ (306,041)
========== ==========
Per share information basic and diluted:
Income (loss) per share $ (0.01) $ (0.01)
========== ==========
Weighted average shares outstanding 24,410,502 24,995,502
========== ==========
See accompanying notes to financial statements.
<PAGE>18
Dale Jarrett Racing Adventure, Inc.
Statement of Stockholders' Equity (Deficit)
For the Years Ended December 31, 2009 and December 31, 2008
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Unearned
ACTIVITY Shares Amount Capital Services
---------- ---------- ---------- --------
<s> <c> <c> <c> <c>
Balance December 31, 2007 24,995,502 2,500 $ 6,203,931 $ (25,000)
Shares redeemed for cash - - (85,500) -
Amortization of unearned services - - - 25,000
Net (loss) for the year ended
December 31, 2008 - - - -
---------- ---------- ---------- --------
Balance December 31, 2008 24,995,502 2,500 6,118,431 -
Shares issued for services 400,000 40 15,960 -
Stock option based compensation - - 50,000 -
Shares retired (885,000) (89) 89 -
Purchase of treasury stock - - - -
Net (loss) for the year ended
December 31, 2009 - - - -
---------- ---------- ---------- --------
Balance December 31, 2009 24,510,502 $ 2,451 $6,184,480 $ -
========== ========== ========== ========
<PAGE>19
Dale Jarrett Racing Adventure, Inc.
(CONTINUED) Statement of Stockholders' (Deficit)
For the Years Ended December 31, 2009 and December 31, 2008
Treasury Stock
Accumulated --------------
ACTIVITY (Deficit) Shares Amount Total
----------- ------ ------ -----
Balance December 31, 2007 $(5,743,474) - $ - $ 437,957
Shares redeemed for cash - - - (85,500)
Amortization of unearned services - - - 25,000
Net (loss) for the year ended
December 31, 2008 (306,041) - - (306,041)
----------- ---------- -------- ---------
Balance December 31, 2008 (6,049,515) - - 71,416
Shares issued for services - - - 16,000
Stock option based compensation - - - 50,000
Shares retired - - -
Purchase of treasury stock - 294,500 (17,867) (17,867)
Net (loss) for the year ended
December 31, 2009 (135,766) - - (135,766)
---------- ---------- --------- --------
Balance December 31, 2009 $(6,185,281) 294,500 $(17,867) $ (16,217)
========== ========== ========= ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>20
Dale Jarrett Racing Adventure, Inc.
Statements of Cash Flows
For The Years Ended December 31, 2009 and December 31, 2008
2009 2008
---------- ----------
Net income (loss) $ (135,766) $ (306,041)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 129,392 146,490
Common stock issued for services 16,000 -
Stock option based compensation 50,000 -
Loss on disposal of assets - 15,225
Interest added to officer loans - 5,312
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (16,759) 1,869
(Increase) decrease in inventories and
supplies (63,640) 1,988
(Increase) decrease in prepaid expenses
and other current assets (4,293) 12,534
(increase) decrease in note receivable 10,000 (10,000)
Increase (decrease) in deferred revenue 206,844 114,302
Increase (decrease) in accrued salaries -
officers - (100,000)
Increase in accounts payable and accrued
expenses (27,010) (70,486)
---------- ---------
Total adjustments 300,534 117,234
---------- ----------
Net cash provided by (used in) operating
activities 164,768 (188,807)
---------- ---------
Cash flows from investing activities:
Acquisition of property and equipment (96,381) (286,644)
---------- ---------
Net cash (used in) investing activities (96,381) (286,644)
---------- ---------
Cash flows from financing activities:
Repayment of shareholder advance - (210,922)
Shares redeemed for cash - (85,500)
Purchase of treasury stock (17,867) -
Repayment of long-term debt (28,652) (28,647)
---------- ---------
Net cash used in financing activities (46,519) (325,069)
---------- ---------
Increase (decrease) in cash and cash
equivalents 21,868 (800,520)
Cash and cash equivalents, beginning 522,695 1,323,215
---------- ----------
Cash and cash equivalents, ending $ 544,563 $ 522,695
========== ==========
<PAGE>21
Dale Jarrett Racing Adventure, Inc.
(CONTINUED) Statements of Cash Flows
For The Years Ended December 31, 2009 and December 31, 2008
2009 2008
---------- ----------
Supplemental cash flow information:
Cash paid for interest $ 5,524 $ 3,865
========= =========
Cash paid for income taxes $ - $ -
========= =========
Non-cash Investing and Financing Activities:
Vehicles acquired for notes payable $ - $ 67,519
========= =========
See accompanying notes to financial statements.
<PAGE>22
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies
Dale Jarrett Racing Adventure, Inc. (referred to as "we", "us", "our" or
the "Company") was incorporated in Florida on November 24, 1998. The
Company offers the "NASCAR" racing school to the public. The Company
owns fifteen "NASCAR" type racecars and has secured several racetrack
locations at which it offers these services at various dates during the
year.
Reclassifications
Certain amounts in the 2008 financial statements have been reclassified
to conform to the current year presentation.
Revenue Recognition
In general, we record revenue when persuasive evidence of an arrangement
exists, services have been rendered or product delivery has occurred,
the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect
specific criteria for the various revenue streams of the Company:
Revenue is recognized at the time the product is delivered or the
service is performed.
Deferred revenue is recorded for amounts received in advance of the time
at which services are performed and included in revenue at the
completion of the related services.
Cash and Cash Equivalents
For purposes of the statement of cash flows, we consider all highly
liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Accounts Receivable
Accounts receivable are stated at estimated net realizable value.
Accounts receivable are comprised of balances due from customers net of
estimated allowances for uncollectible accounts. In determining
collectability, historical trends are evaluated and specific customer
issues are reviewed to arrive at appropriate allowances. There was no
allowance at December 31, 2009 and 2008.
<PAGE>23
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies (continued)
Spare Parts and Supplies
Spare parts and supplies include engine parts, tires and other supplies
used in the racecar operation and are recorded at cost.
Property and Equipment
Property and equipment are recorded at cost and are depreciated using
the straight-line method over the estimated useful lives of the
respective assets, ranging from 3 to 10 years. Major additions are
capitalized, while minor additions and maintenance and repairs, which do
not extend the useful life of an asset, are expensed as incurred.
Intangible Assets and Long Lived Assets
The Company makes reviews for the impairment of long-lived assets and
certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount. No such
impairment losses have been identified by the Company for the years
ended December 31, 2009 and 2008.
Use of Estimates
The preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period.
Estimates which are critical to the financial statements include the
recoverability of long-lived assets and the fair value of stock-based
compensation. Actual results could differ from those estimates.
Advertising Costs
Advertising costs are charged to operations when the advertising first
takes place. Advertising costs charged to operations were $476,011 and
$564,609 for the years ended December 31, 2009 and 2008.
<PAGE>24
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies
(continued)
Fair Value of Financial Instruments
The Company's short-term financial instruments consist of cash, accounts
and notes receivable, accounts payable and accrued expenses and notes
payable. The carrying amounts of these financial instruments approximate
fair value because of their short-term maturities. Financial
instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash
equivalents and accounts receivable. We continually monitor our
positions with, and the credit quality of, the financial institutions in
which we invest. As of December 31, 2009 and 2008, and periodically
throughout such years, balances in various operating accounts exceeded
federally insured limits. We have not experienced any losses in such
accounts. We do not hold or issue financial instruments for trading
purposes nor do we hold or issue interest rate or leveraged derivative
financial instruments.
The carrying value of our long-term debt approximated its fair value
based on the current market conditions for similar debt instruments.
Segment Information
The Company follows Financial Accounting Standards Board (FASB) ASC 280-
10, Segment Reporting. Under ASC 280-10, certain information is
disclosed based on the way management organizes financial information
for making operating decisions and assessing performance. We currently
operate in a single segment and will evaluate additional segment
disclosure requirements as we expand its operations.
Income Taxes
We compute income taxes in accordance with FASB ASC Topic 740, Income
Taxes. Under ASC-740, deferred tax assets and liabilities are computed
based upon the difference between the financial statement and income tax
basis of assets and liabilities using the enacted marginal tax rate
applicable when the related asset or liability is expected to be
realized or settled. Deferred income tax expenses or benefits are based
on the changes in the asset or liability each period. Also, the effect
on deferred taxes of a change in tax rates is recognized in income in
the period that included the enactment date. If available evidence
suggests that it is more likely than not that some portion or all of the
deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax assets to the amount that is more
likely than not to be realized. Future changes in such valuation
allowance are included in the provision for deferred income taxes in the
period of change.
<PAGE>25
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies
(continued)
Beginning January 1, 2007, we adopted FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (ASC 740-10). The
Interpretation prescribes a recognition threshold and a measurement
attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those
benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The amount
recognized is measured as the largest amount of benefit that is greater
than 50 percent likely of being realized upon ultimate settlement.
Stock-Based Compensation
The Company records stock based compensation in accordance with FASB ASC
718, Stock Compensation. ASC 718 requires that the cost resulting from
all share-based transactions be recorded in the financial statements. It
establishes fair value as the measurement objective in accounting for
share-based payment arrangements and requires all entities to apply a
fair-value-based measurement in accounting for share-based payment
transactions with employees. The Statement also establishes fair value
as the measurement objective for transactions in which an entity
acquires goods or services from non-employees in share-based payment
transactions.
Net Income (Loss) Per Common Share
We calculate net income (loss) per share in accordance with ASC Topic
260, Earnings per Share. Basic earnings (loss) per share are calculated
by dividing net income (loss) by the weighted average number of common
shares outstanding for the period. Diluted earnings (loss) per share is
calculated by dividing net income (loss) by the weighted average number
of common shares and dilutive common stock equivalents outstanding.
During periods in which we incur losses, common stock equivalents, if
any, are not considered, as their effect would be anti-dilutive or have
no effect on earnings per share.
Recent Accounting Pronouncements
The following Accounting Standards Codification Updates have been
issued, or will become effective, after the end of the period covered by
this discussion:
Pronouncement Issued Title
ASU No. 2009-13 October 2009 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue
Arrangements - a consensus of
the FASB Emerging Issues Task
Force
<PAGE>26
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies
(continued)
ASU No. 2009-14 October 2009 Software (Topic 985): Certain
Revenue Arrangements That
Include Software Elements-a
consensus of the FASB Emerging
Issues Task Force
ASU No. 2009-15 October 2009 Accounting for Own-Share Lending
Arrangements in Contemplation of
Convertible Debt Issuance or
Other Financing
ASU No. 2009-16 December 2009 Transfers and Servicing (Topic
860): Accounting for Transfers
and Financial Assets
ASU No. 2009-17 December 2009 Consolidations (Topic
810): Improvements to Financial
Reporting by Enterprises
Involved with Variable Interest
Entities
ASU No. 2010-01 January 2010 Equity (Topic 505): Accounting
for Distributions to
Shareholders with Components of
Stock and Cash - a consensus of
the FASB Emerging Issues Task
Force
ASU No. 2010-02 January 2010 Consolidation (Topic
810): Accounting and Reporting
for Decreases in Ownership of a
Subsidiary - a Scope
Clarification
ASU No. 2012-03 January 2010 Extractive Activities - Oil and
Gas (Topic 932): Oil and Gas
Reserve Estimation and
Disclosures
ASU No. 2010-04 January 2010 Accounting for Various Topics:
Technical Corrections to SEC
Paragraphs
ASU No. 2010-05 January 2010 Compensation - Stock
Compensation (Topic718):
Escrowed Share Arrangements and
the Presumption of Compensation
ASU No. 2010-06 January 2010 Fair Value Measurements and
Disclosures (Topic 820):
Improving Disclosures about Fair
Value Measurements
ASU No. 2010-07 January 2010 Not-for-Profit Entities (Topic
958): Not-for-Profit Entities -
Mergers and Acquisitions
ASU No. 2010-08 February 2010 Technical Corrections to Various
Topics
<PAGE>27
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 1. Organization and Significant Accounting Policies
(continued)
ASU No. 2010-09 February 2010 Subsequent Events (Topic 855):
Amendments to Certain
Recognition and Disclosure
Requirements
ASU No. 2010-10 February 2010 Consolidation (Topic 810):
Amendments for Certain
Investment Funds
ASU No. 2010-11 March 2010 Derivatives and Hedging (Topic
815): Scope Exceptions Embedded
Credit Derivatives
The Company has determined that the aforementioned recently issued
accounting standards do not have a material impact on the financial
statements or do not apply to its operations.
Note 2. Property and Equipment
Property and equipment consists of the following at December 31, 2009
and 2008:
2009 2008
---- ----
Office furniture and equipment $ 54,593 $ 54,593
Software 26,398 26,398
Shop and track equipment 260,407 202,973
Race vehicles 611,390 569,359
Vehicles - other 379,327 379,327
--------- ---------
1,332,115 1,232,650
Less accumulated depreciation (757,747) (628,355)
--------- ---------
$ 574,368 $ 604,295
========= =========
Depreciation charged to operations was $129,392 and $121,490 for the
years ended December 31, 2009 and 2008, respectively, of which $114,274
and $108,136 is included in cost of sales and services for those years.
Note 3. Long-term Debt
At December 31, 2009 and 2008, long-term debt consists of obligations
under vehicle purchase contracts having outstanding principal balances
of $71,809 and $100,461, respectively. The loans are payable in
<PAGE>28
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 3. Long-term Debt (continued)
monthly installments of $2,306, including interest at rates ranging from
5.0% to 7.5% through March 2013, and are collateralized by three support
vehicles.
Principal repayments are due as follows: $23,627 in 2010, $24,246 in
2011, $21,547 in 2012, and $2,389 in 2013.
Note 4. Stockholders' Equity (Deficit)
During the months of October through December 2009, the Company
purchased a total of 294,500 shares of its common stock for cash
aggregating $17,867, which is classified as treasury stock in the
accompanying balance sheet as of December 31, 2009. During 2010, the
Company purchased an additional 201,250 shares of its common stock for
cash aggregating $12,131.
During April 2009, the Company issued 400,000 shares of common stock to
an officer for services valued at $16,000. The value assigned to the
shares issued was based upon the trading value of the Company's common
stock at the date the shares were authorized by the Company's Board of
Directors.
During 2008, the Company repurchased 855,000 shares of common stock for
cash aggregating $85,500. During January 2009, the Company retired
885,000 shares of common stock.
During October 2008, the Company amended its Articles of Incorporation
to authorize 5,000,000 shares of $.0001 par value preferred stock and
200,000,000 shares of $.0001 par value common stock. The par value of
the Company's outstanding common stock has been adjusted to reflect the
change in par value.
During December 1998, the Company negotiated personal service contracts
with certain members of the Jarrett family and Brett Favre. The Jarretts
and Favre have had a prior business relationship related to automobile
racing. The contracts required the individuals to provide personal
appearances and to participate in the advertising and promotional
efforts of the Company for a period of ten years. The Company issued an
aggregate of 5,500,000 shares in connection with the personal service
contracts. Services charged to expense during the year ended December
31, 2008 amounted to $25,000. The contracts expired in December 2008.
These individuals have verbally agreed to continue their relationship
with the Company without a written agreement and will be compensated for
future services only when they are rendered.
<PAGE>29
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 4. Stockholders' Equity (Deficit)
(continued)
The following table summarizes stock option activity during the years
ended December 31, 2009 and 2008:
Stock Weighted-average
Options Price per Share
------- ----------------
Outstanding at
Balance at December 31, 2007 4,928,571 $0.15
Expired (1,428,571) $0.14
--------- -----
Balance at December 31, 2008 3,500,000 $0.15
Expired - -
--------- -----
Balance at December 31, 2009 3,500,000 $0.15
=========
On October 22, 2004, the board of directors approved the issuance of
options to certain officers and directors and a consultant for the
purchase of 3,500,000 common shares at an exercise price of $.15 per
common share for a period of five years.
During April 2009, the Company extended the expiration date of 3,500,000
outstanding options for an additional five years. The exercise price
remained at $.15 per share and the options now expire on October 21,
2014. The incremental cost of the extension of these options was $50,000
and was charged to stock option based compensation expense during 2009.
Note 5. Income Taxes
Deferred income taxes may arise from temporary differences resulting
from income and expense items reported for financial accounting and tax
purposes in different periods. Deferred taxes are classified as current
or non-current, depending on the classifications of the assets and
liabilities to which they relate. Deferred taxes arising from temporary
differences that are not related to an asset or liability are classified
as current or non-current depending on the periods in which the
temporary differences are expected to reverse. The Company had no
significant deferred tax items arise during any of the periods
presented.
The Company has not provided for income taxes during any period
presented as a result of operating losses. The Company has a net
operating loss carryforward at December 31, 2009 of approximately
$4,370,000 that will expire through 2030. The principal difference
between the loss for financial reporting purposes and the loss for tax
purposes results from stock based compensation. The Company has fully
reserved the deferred tax asset that would arise from the loss
carryforward since the Company believes that it is more likely than not
<PAGE>30
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 5. Income Taxes
(continued)
that future income from operations will not be available to utilize the
deferred tax asset. The approximate deferred tax asset and the related
reserve are as follows:
Deferred tax asset
Tax benefit of net operating loss $ 1,423,000
Less valuation allowance (1,423,000)
-----------
Net deferred tax asset $ -
===========
The increase in the reserve was approximately $23,000 during 2009.
Since inception, we have been subject to tax by both federal and state
taxing authorities. Until the respective statutes of limitations expire,
we are subject to income tax audits in the jurisdictions in which we
operate. We are no longer subject to U.S. federal tax examinations for
fiscal years prior to 2005, and we are not subject to audits prior to
the 2005 fiscal year for the state jurisdiction.
Note 6. Commitments and Contingencies
Operating Leases
In October 2009, the Company entered an operating lease for use of a
building in Hickory, North Carolina. The lease requires a monthly
payment of $1,830 and expires in November, 2012. Future minimum
payments under this lease agreement are as follows: $21,960 in 2010,
$21,960 in 2011, and $20,130 in 2012. The Company also leases various
office and warehouse space on a month to month basis or under terms that
are less than one year. Rent expense amounted to $55,800 and $38,765
for the years ended December 31, 2009 and 2008, respectively.
Employment Agreements
During November 2008, the Company entered into an employment agreement
with an officer for a period of five years at a salary of $110,000 per
year.
Vendor Agreement
During 2009, the Company entered into an agreement with a vendor, who
provides video equipment and video recording services, which enables the
Company to sell video recordings to its customers. Under the agreement,
the Company is entitled to a 60% allocation of revenue for all video
products and services sold. The agreement is through December 31, 2011
and is renewable annually thereafter.
<PAGE>31
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2009 and 2008
Note 6. Commitments and Contingencies
(continued)
Litigation
The Company is a defendant in litigation related to an alleged breach of
contract. The case is currently pending in the circuit court of
Talladega County, Alabama, and there is a possibility of a judgment
against the Company with a range of $25,000 to $50,000. The Company is
contesting the claim and intends to vigorously defend its position, and
as such, there have been no amounts reflected in the accompanying
financial statements related to this matter.
Note 7. Related Party Transactions
During the years ended December 31, 2009 and 2008, an officer of the
Company paid approximately $114,000 and $128,000, respectively, of
expenses for the Company and has been reimbursed for those payments.
During 2008, the Company made cash repayments of shareholder advances
totaling $210,922, including interest of $5,312.
<PAGE>32
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-
15(e) and 15d-15(e) under the Exchange Act that are designed to insure
that information required to be disclosed in the reports we file or
submit under the Exchange Act is recorded, processed, summarized and
reported within the periods specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated
and communicated to our management, including our Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), or the persons
performing similar functions, to allow timely decisions regarding
required disclosure.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has evaluated
the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this annual report. Based on that
evaluation, our CEO and CFO, or the persons performing similar
functions, concluded that our disclosure controls and procedures were
effective as of December 31, 2009.
Management's Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the supervision
of our CEO and CFO, or the persons performing similar functions, to
provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of our financial statements for external
reporting in accordance with accounting principles generally accepted in
the United States of America. Management has evaluated the
effectiveness of our internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control over Financial Reporting
- - Guidance for Smaller Public Companies.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has assessed
the effectiveness of our internal control over financial reporting as of
December 31, 2008, and concluded that it is effective.
This annual report does not include an attestation report of the
registrant's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the registrant's registered public accounting firm
<PAGE>33
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or
those persons performing similar functions, our management has evaluated
changes in our internal controls over financial reporting that occurred
during the fourth quarter of 2008. Based on that evaluation, our CEO
and CFO, or those persons performing similar functions, did not identify
any change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various inherent
limitations, including cost limitations, judgments used in decision
making, assumptions about the likelihood of future events, the soundness
of our systems, the possibility of human error, and the risk of fraud.
Moreover, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate
because of changes in conditions and the risk that the degree of
compliance with policies or procedures may deteriorate over time.
Because of these limitations, there can be no assurance that any system
of disclosure controls and procedures or internal control over financial
reporting will be successful in preventing all errors or fraud or in
making all material information known in a timely manner to the
appropriate levels of management.
ITEM 9B. OTHER INFORMATION
None
<PAGE>34
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Board of Directors. The following persons listed below have been
retained to provide services as director until the qualification and
election of his successor. All holders of common stock will have the
right to vote for directors of the registrant. The board of directors
has primary responsibility for adopting and reviewing implementation of
the business plan of the registrant, supervising the development
business plan, review of the officers' performance of specific business
functions. The board is responsible for monitoring management and from
time to time, to revise the strategic and operational plans of the
registrant. Directors receive no cash compensation or fees for their
services rendered in such capacity.
Mr. Shannon is a full time employee of the registrant.
The Executive Officers and Directors are:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<s> <c> <c>
Timothy B. Shannon, age 48 President, Director Inception to Present
Chief Executive Officer
Chief Financial Officer June 1, 2005 to present
Glenn Jarrett, age 58 Vice President Inception to Present
Director
Kenneth J. Scott, age 55 Director January 26, 2007
to present
</TABLE>
Resumes:
Timothy B. Shannon. Mr. Shannon has been President, Director and
Chief Executive Officer of the registrant since its inception in 1998.
Mr. Shannon became Chief Financial Officer in June 2005. Mr. Shannon
spent six years as a systems engineer and marketing representative with
IBM after graduating in 1983 from the University of South Florida's
Engineering College with a degree in Computer Science. From 1990 until
1994 Mr. Shannon was an investment advisor with Great Western
Securities and Hearn Financial Services in Orlando, FL. In 1995, he
co-founded Shannon/Rosenbloom Marketing with Brian Rosenbloom, a former
director of Dale Jarrett Racing Adventure, Inc.
Glenn Jarrett. Mr. Jarrett has been a Director of the registrant since
its inception. Mr. Jarrett works as an auto racing announcer and
consultant. Mr. Jarrett has been a senior motorsports announcer for TNN
since 1991. He is a motorsports announcer (Pits) at contracted events
and is the co-producer and co-host of the "World of Racing" radio
program on MRN radio which airs weekdays. Mr. Jarrett has an extensive
background in auto racing. He drove in the NASCAR Busch Series from
1982 to 1988 and ran a total of eighteen (18) NASCAR Winston Cup Races
from 1977 to 1983. Mr. Jarrett is the acting consultant and marketing
coordinator for DAJ Racing, Inc. and has been a guest speaker at many
<PAGE>35
auto racing and related functions. Mr. Jarrett graduated from the
University of North Carolina in 1972 with a Bachelor of Science degree
in Business Administration.
Kenneth J. Scott. Since 1985, Mr. Scott has been President of Kenneth
J. Scott, P.A., an accounting firm that provides financial, tax and
advisory services to a wide range of businesses and not-for-profit
organizations throughout the state of Florida. Mr. Scott has been a
certified public accountant in the state of Florida since 1979. He
graduated from Rollins College with a Bachelor of Arts degree in
Business Administration in 1978.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as
amended, an officer, director, or greater-than-10% shareholder of the
registrant must file a Form 4 reporting the acquisition or disposition
of registrant's equity securities with the Securities and Exchange
Commission no later than the end of the second business day after the
day the transaction occurred unless certain exceptions apply.
Transactions not reported on Form 4 must be reported on Form 5 within 45
days after the end of the registrant's fiscal year. Such persons must
also file initial reports of ownership on Form 3 upon becoming an
officer, director, or greater-than-10% shareholder. To our knowledge,
based solely on a review of the copies of these reports furnished to it,
the officers, directors, and greater than 10% beneficial owners complied
with all applicable Section 16(a) filing requirements during 2009.
Code of Ethics Policy
During July 2008, the registrant adopted a code of ethics that applies
to our principal executive officer, principal financial officer,
principal accounting officer or controller or persons performing similar
functions.
Corporate Governance
There have been no changes in any state law or other procedures by which
security holders may recommend nominees to our board of directors. In
addition to having no nominating committee for this purpose, we
currently have no specific audit committee and no audit committee
financial expert. Based on the fact that our current business affairs
are simple, any such committees are excessive and beyond the scope of
our business and needs.
Indemnification
The registrant shall indemnify to the fullest extent permitted by, and
in the manner permissible under the laws of the State of Florida, any
person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that he is or was a director or officer of the
registrant, or served any other enterprise as director, officer or
employee at the request of the registrant. The board of directors, in
<PAGE>36
its discretion, shall have the power on behalf of the registrant to
indemnify any person, other than a director or officer, made a party to
any action, suit or proceeding by reason of the fact that he/she is or
was an employee of the registrant.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE REGISTRANT FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
ITEM 11. EXECUTIVE COMPENSATION
The following table set forth certain information as to the
compensation paid to our sole executive officer.
Summary Compensation Table
<TABLE>
Name and Cash Stock Option All Other
Principal Position Year Salary Awards Awards Compensation Total
($) ($) ($) ($) ($)
- ------------------- ---- ------- ------ ------ ------------- -------
<s> <c> <c> <c> <c> <c> <c>
Timothy B. Shannon 2009 179,815 16,000 28,755 - 224,570
CEO, CFO 2008 154,481 - - 100,000 254,481
</TABLE>
The cash salary amount for 2009 includes a base salary of $150,000 and
commissions earned by Mr. Shannon during 2009 of $29,815.
The cash salary amount for 2008 includes a base salary of
$110,000 and commissions earned by Mr. Shannon during 2008 of $44,481.
The stock awards compensation for 2009 includes the value of stock
awards granted to Mr. Shannon by board of director's resolution on April
9, 2009. To calculate the fair value of the awards, the market price at
the grant date is used in accordance with ASC 718-10-30. The market
price at that date was $.04.
<PAGE>37
The option awards compensation for 2009 includes the fair value of the
extended options described in Note 4 of the financial statements over
the fair value of those options immediately preceding the extension as
required by ASC 718-20-35-3. These options were valued using a risk-
free rate of 1.9%, strike price of $.15, market price of $.04,
volatility of 73%, and a life of .54 years immediately prior to the
extension and 5.54 upon extension.
The all other compensation amount for 2008 represents salary accrued by
the registrant in prior years, but not paid to Mr. Shannon until 2009
and 2008.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth the outstanding stock options to the
registrant's sole executive officer:
Option Awards
Outstanding Equity Awards at December 31, 2009
<TABLE>
<CAPTION>
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option Option
Options/ Options/ Exercise Expiration
Name Exercisable Unexercisable Price Date
- ---- ----------- ------------- -------- ----------
<s> <c> <c> <c> <c>
Timothy B.
Shannon 2,000,000/2,000,000 2,000,000 $0.15 Oct. 21, 2014
</TABLE>
DIRECTOR COMPENSATION FOR 2009
The following table sets forth the compensation to our directors for
2009:
Name Total
- ---- -----
Timothy B. Shannon $0
Glenn Jarrett $0
Kenneth J. Scott $0
The registrant does not compensate its directors for their services as
such. The registrant reimburses the directors for their reasonable out-
of pocket expenses for attending meetings of the board of directors.
<PAGE>38
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
The following tabulates holdings of shares of the registrant by each
person who, subject to the above, holds of record or is known by
management to own beneficially more than 5.0% of the common shares and,
in addition, by all directors and officers of the registrant
individually and as a group. Each named beneficial owner has sole
voting and investment power with respect to the shares set forth
opposite his name.
Shareholdings at March 15, 2010
Percentage of
Number & Class(1) Outstanding
of Shares Common Shares
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class(2)
- -------------------- -------------------- --------
Timothy B. Shannon 3,983,333(1) 16.25%
c/o Dale Jarrett Racing
Adventure, Inc.
1313 10TH Avenue Lane, SE
Hickory, NC 28602
Glenn Jarrett 2,000,000(3) 8.16%
c/o Dale Jarrett Racing
Adventure, Inc.
1313 10TH Avenue Lane, SE
Hickory, NC 28602
Ned Jarrett 1,000,000 4.08%
3182 Ninth Tee Drive
Newton, NC 28658
Dale Jarrett 1,500,000 6.12%
3182 Ninth Tee Drive
Newton, NC 28658
Brett Favre 1,500,000 6.12%
132 Westover Drive
Hattiesburg, MS 39402
Kenneth J. Scott 1,109,800(4) 4.53%
c/o Dale Jarrett Racing
Adventure, Inc.
1313 10TH Avenue Lane, SE
Hickory, NC 28602
(1) Includes 1,983,333 common shares and immediately exercisable
options to purchase 2,000,000 common shares by Mr. Shannon.
(2) The percentages are based upon 24,510,502 issued and outstanding
common shares.
<PAGE>39
(3) Includes 1,000,000 common shares and immediately exercisable
options to purchase 1,000,000 common shares by Mr. Glenn Jarrett.
(4) Includes 609,800 common shares and immediately exercisable options
to purchase 500,000 common shares by Mr. Scott.
The following information relates to the common shares beneficially
owned by each of our directors and executive officers and all of our
directors and executive officers as a group:
Name and Address of Amount and Nature of Percent
Beneficial Owner (1) Beneficial Ownership of Class
- ------------------- -------------------- ---------
Kenneth J. Scott 1,109,800 (2) 4.53 (3)
Glenn Jarrett 2,000,000 (4) 8.16 (5)
Timothy B. Shannon 3,983,333 (6) 16.25 (7)
All directors and executive
officers as a group (3 persons) 7,093,133 (8) 28.94 (9)
(1) The address for each of the persons listed above is c/o Dale
Jarrett Racing Adventure, Inc., 1313 10TH Avenue Lane, SE, Hickory, NC
28602.
(2) Includes 609,800 common shares and immediately exercisable options
to purchase 500,000 common shares by Mr. Scott.
(3) The percentage is based upon 24,510,502 issued and
outstanding common shares and immediately exercisable options to
purchase 500,000 common shares by Mr. Scott.
(4) Includes 1,000,000 common shares and immediately exercisable
options to purchase 1,000,000 common shares by Mr. Jarrett.
(5) The percentage is based upon 24,510,502 issued and outstanding
common shares and immediately exercisable options to purchase 1,000,000
common shares by Mr. Glenn Jarrett.
(6) Includes 1,983,333 common shares and immediately exercisable
options to purchase 2,000,000 common shares by Mr. Shannon.
(7) The percentage is based upon 24,501,502 issued and outstanding
common shares and immediately exercisable options to purchase 2,000,000
common shares by Mr. Shannon.
(8) Includes 3,593,133 common shares and immediately exercisable option
to purchase 3,500,000 common shares by the three named directors and
officers.
(9) The percentage is based upon 24,510,502 issued and outstanding
common shares and immediately exercisable options to purchase 3,500,000
common shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
During the years ended December 31, 2009 and 2008, Timothy B. Shannon,
an officer of the registrant paid approximately $114,000 and $128,000,
respectively, of expenses for the registrant and has been reimbursed for
those payments.
During 2008, the registrant made cash repayments of shareholder advances
totaling $210,922, including interest of $5,312.
<PAGE>40
Director Independence.
The registrant's board of directors consists of Timothy Shannon, Dale
Jarrett and Kenneth Scott. Neither Timothy Shannon nor Dale Jarrett is
independent as such term is defined by a national securities exchange or
an inter-dealer quotation system. During the fiscal year ended December
31, 2007, there were no transactions with related persons other than as
described in the section above entitled "Item 11. Executive
Compensation".
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees. We paid aggregate fees and expenses of approximately
$29,000 and $27,000 respectively, from Stark Winter Schenkein and Co.,
LLP for the 2009 and 2008 fiscal years. Such fees included work
completed for our annual audits and for the review of our financial
statements included in our Form 10-Q. It is estimated that Kingery &
Crouse, P.A., our new principal accounting firm will invoice us
approximately $19,000 in 2010 related to the audit of our financial
statements for the years ended December 31, 2009 and 2008, which amount
is not included in the above referenced fees.
Tax Fees. We did not incur any aggregate tax fees and expenses from
Stark Winter Schenkein and Co., LLP for the 2009 and 2008 fiscal years
for professional services rendered for tax compliance, tax advice, and
tax planning.
All Other Fees. We did not incur any other fees from Stark Winter
Schenkein and Co., LLP during fiscal 2009 and 2008.
The board of directors, acting as the Audit Committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for fiscal years 2009 and 2008 were
approved by the board of directors pursuant to its policies and
procedures.
<PAGE>41
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, December 31, 2009 and 2008
Statements of Operations for the years ended December 31, 2009 and 2008
Statements of Stockholders' Equity for the years ended December 31, 2009
and 2008
Statements of Cash Flows for the years ended December 31, 2009 and 2008
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof:
None.
(a)(3) Exhibits
The following of exhibits are filed with this report:
(31) 302 certification
(32) 906 certification
<PAGE>42
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.
Date: April 6, 2010
Dale Jarrett Racing Adventure, Inc.
/s/ Timothy Shannon
- ------------------------------
By: Timothy Shannon, President
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the Corporation and in the capacities and on the dates
indicated.
/s/Timothy B. Shannon CEO/CFO April 6, 2010
- ------------------- Controller/Director
/s/Kenneth J. Scott Director April 6, 2010
- -------------------
/s/Glenn Jarrett Director April 6, 2010
- ------------------- Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>dalejarrett10k09ex31.txt
<DESCRIPTION>302 CERTIFICATION
<TEXT>
302 CERTIFICATION
I, Timothy B. Shannon, certify that:
1. I have reviewed this annual report on Form 10-K of Dale
Jarrett Racing Adventure, Inc.;
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this report;
4. I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under my
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in
which this report is being prepared;
b. Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed
under my supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report my conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of
internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information;
and
b. any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: April 6, 2010 /s/Timothy B. Shannon
----------------------------
Timothy B. Shannon
Chief Executive Officer
Chief Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>dalejarrett10k09ex32.txt
<DESCRIPTION>906 CERTIFICATION
<TEXT>
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officer of Dale Jarrett Racing Adventure, Inc. (the
"Company"), hereby certifies, to such officer's knowledge, that the
Company's Annual Report on Form 10-K for the year ended December 31,
2009 (the "Report") fully complies with the requirements of Section
13(a) of the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
/s/ Timothy B. Shannon
----------------------
Timothy B. Shannon
Chief Executive Officer
Chief Financial Officer
April 6, 2010
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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