Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

The Company leased space for certain of its offices and airport facilities under leases expiring from one month to two years after September 30, 2013. In 2012, the Company abandoned the leased properties but remain still liable for unpaid rent which has been accrued.

The Company has, from time to time, been involved in legal proceedings, claims, and litigation that have occurred in the normal course of business. The Company routinely assesses its liabilities and contingencies in connection with these matters based upon the latest available information and, when necessary, seeks input from its third-party advisors when making these assessments. Described below are material pending legal proceedings (other than ordinary routine litigation incidental to the Company’s business), material proceedings known to be contemplated by governmental authorities, other proceedings arising under federal, state, or local environmental laws and regulations (including governmental proceedings involving potential fines, penalties, or other monetary sanctions in excess of $10,000) and such other pending matters that we may determine to be appropriate.

On April 26, 2012, a judgment was entered against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Palm Beach County, Florida by Sky Way Enterprises, Inc. in the sum of $194,427 for services rendered, damages, including costs, statutory interest and attorneys’ fees. The aggregate amount is reflected in the balance sheet under ‘litigation accrual, discontinued operations’.

On March 4, 2013, a judgment was entered against our subsidiary, Pet Airways, Inc., in District Court of Douglas County, Nebraska by Suburban Air Freight in the sum of $88,547 for services rendered, including statutory interest and attorneys’ fees. The aggregate amount is reflected in the balance sheet under ‘litigation accrual, discontinued operations’.

On March 6, 2013, an order was issued a by the labor commissioner of the State of California for our subsidiary, Pet Airways, Inc., to pay a former employee Alyce Tognotti wages and penalties in the sum of $18,365 for services rendered, including penalties, statutory interest and liquidated damages. The aggregate amount is reflected in the balance sheet under ‘litigation accural, discontinued operations’.

On May 31, 2013, a motion for final judgment was filed against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Broward County, Florida by AFCO Cargo BWI, LLC in the sum of $31,614 for services rendered, including statutory interest and attorneys’ fees. The aggregate amount is reflected in the balance sheet under ‘litigation accrual, discontinued operations’.

Other than the foregoing, there were no claims, actions, or lawsuits which to our knowledge are pending or threatened that could reasonably be expected to have a material effect on the results of our operations. The Company is self-insured and has not accrued a reserve against potential losses from unknown risks and liabilities.