**Exhibit 14.3**

 

**CHARTER OF THE**

**AUDIT COMMITTEE**

**OF THE BOARD OF DIRECTORS OF**

**XELR8 HOLDINGS, INC.**

 

**I.              PURPOSE**

 

Thepurpose of the Audit Committee is to oversee XELR8 Holdings, Inc.’saccounting and financial reporting processes, internal systems of control, independentauditor relationships, and audits of XELR8’s consolidated financialstatements.  The Audit Committee is alsoresponsible for determining the appointment of XELR8’s independent auditors andany change in that appointment, and for ensuring the auditor’s independence.

 

**II.            MEMBERSHIPREQUIREMENTS**

 

TheAudit Committee shall consist of no fewer than three members except that solong as XELR8 is a “small business issuer” as defined in Regulation S-B of theSecurities Act of 1933, as amended, the Audit Committee may consist of twomembers. The Board of Directors shall appoint the members of the AuditCommittee.

 

Themembers of the Audit Committee shall be members of the Board of Directors andshall meet the independence and experience requirements of the American StockExchange (AMEX), the Securities Exchange Act of 1934, as amended, and the rules andregulations of the Securities and Exchange Commission. Additionally, each AuditCommittee member shall be able to read and understand fundamental financialstatements, including XELR8’s balance sheet and income and cash flowstatements.

 

Atleast one member of the Audit Committee shall have past employment experiencein finance or accounting, or comparable experience or background which resultsin the individual’s financial sophistication. That individual shall be designated the financial expert. An individualwould qualify if he or she is or was a chief executive officer, chief financialofficer or other senior officer with financial oversight responsibilities.   A director who qualifies as an auditcommittee financial expert under Item 401(h) of Regulation S-K, or Item401(e) of Regulation S-B, is presumed to qualify as financiallysophisticated.

 

**III.           MEETINGS**

 

TheAudit Committee shall meet four times per year or more frequently ascircumstances require. All Audit Committee members are expected to attend eachmeeting, in person or via teleconference or videoconference. The AuditCommittee may ask members of management or others to attend the Audit Committeemeetings and provide pertinent information as necessary.

 

**IV.           AUDITCOMMITTEE AUTHORITY AND RESPONSIBILITIES**

 

TheAudit Committee shall monitor and establish policies with respect to thefinancial affairs of XELR8, including the following specific responsibilities:

 

***Financial Statements; Financial ReportingPrinciples; Internal Audit Controls***

 

1.               Review and discuss with management andthe independent auditor the annual audited financial statements, includingdisclosures made in management’s discussion and analysis, and recommend to theBoard of Directors whether the audited financial statements should be includedin XELR8’s Form 10-K.

 

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2.               Review and discuss with management andthe independent auditor XELR8’s quarterly financial statements prior to the filingof its Form 10-Q, including the results of the independent auditor’sreview of the quarterly financial statements.

 

3.               Discuss with management XELR8’s earningspress releases, including use of “pro forma” or “adjusted” non-GAAPinformation, as well as financial information and earnings guidance provided toanalysts and rating agencies.

 

4.               Review and discuss with management andthe independent auditors significant financial reporting issues and judgmentsmade in connection with the preparation of the financial statements, includingany significant changes in XELR8’s selection or application of accountingprinciples and the qualitative judgments regarding both the appropriateness andacceptability of auditing and accounting policies and principles and financialdisclosure practices used or proposed to be adopted by XELR8.

 

5.               Review and discuss reports from theindependent auditors on:

 

A.           All critical accounting principles andpractices which XELR8 will use, and the qualities of those policies and practices;

 

B.             All alternative treatments of financialinformation within generally accepted accounting principles that have beendiscussed with management, ramifications of the use of such alternativedisclosures and treatment preferred by the independent auditor; and

 

C.             Other material written communicationsbetween the independent auditor and management, such as any management letteror schedule of adjusted differences.

 

6.               Discuss with the independent auditor andthen disclose the matters required to be disclosed by Statement on AuditingStandards No. 61, including any difficulties the independent auditorencounters in the course of the audit work, any restrictions on the scope ofthe independent auditor’s activities, or on its access to requested information,and any significant disagreements with management.

 

7.               Review disclosures made to the AuditCommittee by XELR8’s Chief Executive Officer or Principal Accounting Officerduring their certification process for the Form 10-K and Form 10-Q.

 

8.               Resolve any disagreements betweenmanagement and the independent auditor regarding financial reporting.

 

***        Oversight of XELR8’s Relationship withthe Independent Auditors***

 

9.               Appoint, retain or replace, and establishthe audit fees of  XELR8’s independentauditor. The independent auditor shall report directly to, and be responsibleto, the Audit Committee.  Review andevaluate the performance of the independent auditors and review with the Boardof Directors any proposed discharge.

 

10.         Pre-approve all auditing services andnon-auditing services, including fees and terms thereof, to be performed forXELR8 by the independent auditor, subject to the de minimus exceptions fornon-audit services described in Section 10A(i)(1)(B) of theSecurities Exchange Act of 1934 which are approved by the Audit Committee priorto the completion of the audit. The Audit Committee shall have the soleauthority to pre-approve all auditing services and non-audit services.

 

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11.         Confirm the independence of theindependent auditor, including reviewing each major non-audit service providedby the independent auditor to XELR8, and the fees therefore. Ensure the receiptof periodic reports from the independent auditor delineating all relationshipsbetween the independent auditor and XELR8 consistent with IndependenceStandards Board Standard 1. Discuss such reports with the auditor, and ifdeemed necessary by the Audit Committee, take or recommend that the full Boardof Directors take, appropriate action to oversee the independence of theauditor.  Ascertain that the lead  and concurring partners serve in thatcapacity for no more than 5 years.

 

12.         Discuss with the independent auditor theoverall scope and plans for the audit, including the adequacy of staffing,compensation and resources.

 

***        Compliance Oversight Responsibilities***

 

13.         Consider and review with the independentauditors the adequacy of XELR8’s system of internal controls, and any relatedsignificant audit findings and recommendations, together with management’sresponses thereto.  Inquire aboutsignificant risks and exposures facing the company.  Assess steps taken by management to minimizethese risks.

 

14.         Retain special legal, accounting or otherconsultants to advise the Audit Committee. The Audit Committee may request anyofficer or employee of XELR8 or XELR8’s outside counsel or independent auditorto attend a meeting of the Audit Committee or to meet with any members of, orconsultants to, the Audit Committee.

 

15.         Advise the Board of Directors withrespect to XELR8’s policies and procedures regarding compliance with applicablelaws and regulations and XELR8’s code of ethics and compliance. The AuditCommittee shall establish a process for reviewing (a) all transactions ofthe Company with “related parties” as that term is used in Regulation S-B ofthe Securities Exchange Act of 1934, as amended, and (b) potentialconflicts of interest of XELR8’s officers and/or directors. Review the policiesand procedures with respect to officers’ expense accounts.

 

16.         Conduct such investigations into matterswithin the general scope of its responsibilities as it may deem appropriatefrom time to time or as may be referred to it by the Board of Directors.Consider with management the rationale for employing audit firms other than theprincipal independent auditors.

 

17.         Establish procedures for the receipt,retention and treatment of complaints received by XELR8 regarding accounting,internal accounting controls, auditing matters, and the confidential, anonymoussubmission by employees of concerns regarding questionable accounting orauditing matters.

 

18.         Adopt such rules and procedures forthe conduct of its affairs as it deems necessary if not inconsistent with thisCharter.  Periodically review the Company’sCode of Conduct to insure that it is adequate.

 

***        Report and Recommendations***

 

19.         Prepare the report of the Audit Committeerequired by the rules of the Securities and Exchange Commission to beincluded in XELR8’s annual proxy statement.

 

20.         Maintain minutes or other records ofmeetings and activities of the Audit Committee.

 

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21.         Review and reassess the adequacy of thisCharter annually and recommend any proposed changes to the Board of Directorsfor approval as a result of new laws or regulations.

 

**V.            LIMITATIONS**

 

Whilethe Audit Committee has the responsibilities and powers set forth in thisCharter, it is not the responsibility of the Audit Committee to prepare andcertify XELR8’s financial statements, to guarantee the independent auditor’sreport, or to guarantee other disclosures by XELR8.  These are the responsibility of managementand the independent auditor.

 

**VI.           RESOURCESAND AUTHORITY**

 

TheAudit Committee shall have the resources and authority appropriate to dischargeits duties and responsibilities, including the authority to select, retain,terminate and approve the fees and other retention terms of special orindependent counsel, accountants or other experts, as it deems appropriate. TheAudit Committee may be vested with other specific powers and authority byresolution of the Board of Directors. XELR8 shall provide for appropriatefunding, as determined by the Audit Committee, for payment of compensation tothe independent auditor for the purpose of rendering or issuing an audit reportand to any advisors employed by the Audit Committee.

 

**VI.           ANNUALPERFORMANCE AND EVALUATION**

 

TheAudit Committee shall perform a review and evaluation, at least annually, ofthe performance of the Audit Committee, including reviewing the compliance ofthe Audit Committee with this Charter. In addition, the Audit Committee shallreview and assess, at least annually, the adequacy of this Charter andrecommend to the Board of Directors any improvements to this Charter that theAudit Committee considers necessary or valuable. The Audit Committee shall conductsuch evaluations and review in such manner as it deems appropriate.

 

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