As filed with the Securities and Exchange Commission on October 2, 2007
File No. 333-143935
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
Amendment 1
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
ADS IN MOTION, INC.
(Name of Small Business Issuer in its Charter)
Delaware 7310 95-4856713
(State or other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Code Number) Identification No.)
ADS IN MOTION, INC.
8624 Golden Ridge Rd.
Lakeside, CA 92040
(619) 443-4284 Fax: (619) 443-7206
(Address of Principal Place of Business or
Intended Principal Place of Business)
Eugene Hill
ADS IN MOTION, INC.
8624 Golden Ridge Rd.
Lakeside, CA 92040
Phone (619) 443-4284 Fax (619) 443-7206
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies of Communications to:
"S" Douglas Henderson
4221 South Allison St.
Lakewood CO 80235
Phone (303) 980-8833 Fax (303) 985-1008
Approximate date of commencement of proposed sale to the public. As soon as
possible after this Registration Statement is effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------
Common Stock 500,000 $0.00058 $300.00 $0.04(1)
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(1) Calculated pursuant to Rule 457(f).
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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500,000 SHARES
of
ADS IN MOTION, INC.
COMMON STOCK
All of the shares of ADS IN MOTION, INC. ("the Company") offered hereby are
being offered by Travers International, Inc. Travers International, Inc., the
selling shareholder, owns 500,000 shares of the common stock of ADS IN MOTION,
INC., a Delaware Corporation. Travers International, Inc., will distribute to
its shareholders approximately 500,000 shares of its Ads in Motion common stock
(see "Distribution"). The distribution will be made to holders of record of
Travers International, Inc., stock as of the close of business on May 31, 2007,
on the basis of one share of Ads in Motion's common stock for each one share of
Travers International, Inc., common stock held. Preferred Class A shares of
Travers will receive 20 shares of Ads in Motion common stock for each share of
Travers Preferred Class A stock. The 500,000 shares of the common stock
distributed to Travers International, Inc., shareholders will represent
approximately 5.2% of all the issued and outstanding shares of the common stock
of the Company. Travers International, Inc., acquired the 500,000 shares of the
common stock of Ads in Motion on December 7, 2001, for $50. After the
distribution, a shareholder of Ads in Motion will control approximately 84% of
the outstanding common stock.
Neither Ads in Motion nor Travers will receive any proceeds since no
consideration will be paid in connection with the distribution of these shares.
These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Commission passed upon the accuracy or adequacy
of this Prospectus. Any representation to the contrary is a criminal offense.
These securities involve a high degree of risk, and prospective purchasers
should be prepared to sustain a loss of their entire investment (see "Risk
Factors" on Page 5).
For purposes of qualifying pursuant to a Registration Statement filed on Form
SB-2, the Company has placed an aggregate value on the 500,000 Shares of $293 or
$0.00058 per share (see "Determination of Offering Price").
Travers International, Inc. may be considered a statutory underwriter.
The date of this Prospectus is
Ads in Motion is not currently subject to the periodic reporting requirements of
the Securities Exchange Act of 1934, but will be subject to such requirements
after the distribution. It is the intention of Ads in Motion to send to each of
its shareholders an Annual Report containing certified financial statements
following the end of each fiscal year.
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TABLE OF CONTENTS
PROSPECTUS SUMMARY.......................................... 4
OUR COMPANY. ............................................... 4
THE OFFERING ............................................... 4
SUMMARY FINANCIAL STATUS ................................... 4
RISK FACTORS ............................................... 5
THE DISTRIBUTION ........................................... 8
DETERMINATION OF OFFERING PRICE ............................ 12
MANAGEMENT'S DISCUSSION AND ANALYSIS ....................... 12
BUSINESS ................................................... 13
MANAGEMENT ................................................. 15
PRINCIPAL SHAREHOLDERS ..................................... 16
CERTAIN TRANSACTIONS ....................................... 17
DESCRIPTION OF SECURITIES .................................. 17
PENNY STOCK RULES .......................................... 18
TRANSFER AGENT ............................................. 19
LEGAL MATTERS .............................................. 19
EXPERTS .................................................... 20
FINANCIAL STATEMENTS ....................................... 20
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PROSPECTUS SUMMARY
This entire Prospectus and our consolidated financial statements and related
notes should be read carefully. There is more detailed information in other
places of the Prospectus. Unless the context requires otherwise, 'we,' 'us,'
'our,' and similar terms refer to ADS IN MOTION, INC.
OUR COMPANY
Ads in Motion was incorporated in Delaware on April 4, 2001. Our address and
telephone numbers are 8624 Golden Ridge Rd. Lakeside, CA 92040; (619) 443-4284,
Fax (619) 443-7206. Ads in Motion has developed the concept of an advertising
service for businesses within a more-than-one-story office building to display
promotional advertising on a TV monitor inside the building's elevators. A TV
screen mounted inside a passenger elevator has an immediate captive audience and
the advertising would principally be for businesses or professional offices
within that building. Only a test installation has taken place. The Company is
also developing advertising on a mobile van. The Van displays a video screen and
may be seen while traveling from place to place. The advertising on the screen
may be changed at will.
Ads in Motion's service is not yet commercially available.
THE OFFERING
Securities Offered (1) This prospectus covers the distribution of 500,000
shares of common stock by Travers International,
Inc., which constitutes approximately 5.2% of the
common stock.
The distribution will be made to holders of record of Travers International,
Inc., stock as of the close of business on May 31, 2007, on the basis of one
share of Ads in Motion's common stock for each one share of Travers
International, Inc., common stock held. Preferred Class A shares of Travers will
receive 20 shares of Ads in Motion common stock for each share of Travers
Preferred Class A stock.
Number of Shares of Common
Stock Outstanding: 9,530,000 shares
Risk Factors: The shares of the common stock involve a high
degree of risk. Holders should review carefully
and consider the factors described in "Risk
Factors."
SUMMARY FINANCIAL INFORMATION
The following tables set forth for the periods indicated selected financial
information for ADS IN MOTION, INC.
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SUMMARY BALANCE SHEET DATA:
As of As of
May 31, May 31,
2007 2006
------ ------
Current Assets: $3,664 $ 0
Other Assets: $1,314 $ 0
Total Assets: $4,978 $ 0
Total Liabilities: 0 $ 0
Shareholders Equity $4,978 $ 0
SUMMARY STATEMENT OF OPERATIONS DATA:
Year Ended Year Ended
May 31, May 31.
2007 2006
------ ------
Total Income $ 0 $ 0
Net Loss $ (41) $ (100)
Ads in Motion has been in the development stage since May of 2007 and has been
actively involved in the development of its services and studying marketing
potential.
RISK FACTORS
Purchasers of Ads in Motion's common stock and recipients of the Distribution
described here should carefully consider the following factors, which make Ads
in Motion's common stock a high-risk security.
(1) Ads in Motion is a start-up company and subject to all the risks of a new
business, thus risks to the investor.
The company is very small and only recently has it begun exploring
development of these two types of services and their desirability for
advertisers. Since the concepts are relatively new, very little is known of
their feasibility or potential revenues. Because we are just starting the
development, the investor is at risk that this new business will not be
able to make a profit, or take a very long time to accomplish that.
(2) Lack of experience in the advertising business may result in unsatisfactory
management resulting in little or no profits.
No history in operating an advertising service may risk investor funds due
to the inexperience of the officers and directors who are making business
decisions. This lack of experience may result in an inability to run a
successful business. There is no assurance that Ads in Motion will ever
produce earnings (see "Business" and "Management.").
(3) Additional funds may be needed and may not be able to be raised, resulting
in the company being unable to operate.
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The balance sheet for the year ended May 31, 2007, shows a stockholders'
equity of only $4,978 and working capital of only $3,664. We estimate
sufficient funds for approximately 12 months of current operations. Thus,
we may need to raise additional capital, and there is no assurance that we
will be able to raise sufficient capital for continuing needs.
While Ads in Motion intends to sell its services to existing office
buildings in the San Diego County area and other businesses which might
benefit from mobile ads and will have minimal related costs, there is no
assurance of sufficient advertising revenues to make a viable business.
There can be no assurance that we will be successful in achieving the
objectives.
The management of Ads in Motion intends to pursue its business plan fully,
but if the business proves unfeasible, or sufficient monies cannot be
raised, the company's management and major shareholders may pursue a new
business plan or partner with another company, if they feel it is in the
best interests of the shareholders. The minority shareholders will not have
a vote in this decision.
As of this date, Ads in Motion product and service line is only a concept
with an experimental location and an experimental mobile facility. No
contracts have been signed with building managers or business owners, and
there is no assurance that contracts will be forthcoming. A monitor has
been installed in an elevator in a small local medical office building and
a flat screen monitor has been installed in the rear of a van with computer
hookup capability.
(4) Little Beta testing has been done. Prototypes have been produced in one
location and on one vehicle. Other office buildings in other cities already
display such video advertising in their elevators, though there are none to
our knowledge in San Diego. In the case of the mobile advertising by flat
screen TV in the rear of a vehicle, somewhat similar advertising has been
observed, but they are mechanical in nature and not nearly as flexible as
our concept. This type of competition however, may prove more than Ads in
Motion can surmount. We have installed a unit in one elevator in one office
building. The cost of the advertising has not yet been determined, and it
may not be reasonable for businesses or professions to use them or benefit
from sufficient exposure. Ads in Motion will rely, at least initially, on
its own soliciting of advertisers and may not have sufficient experience to
accomplish any sizeable quantity of interested advertisers. If the price of
the service cannot be at a competitive level with other sources of
advertising, then there could be too few sales and the investor may lose
the money invested.
(5) Our market study may prove incorrect about the desirability of the service.
The evaluation of the Company's services has been done solely by its
officers and directors. No independent analysis or study of its services
has been done by anyone engaged by Ads in Motion. Minimal market research
has been done by a company shareholder in Vancouver, BC, where a similar
product/service is used in more than 150 elevators in office buildings. The
Company also surveyed the office building in San Diego, California, and met
with three companies which manage high-rise office buildings in San Diego.
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The investor is at risk if the company's studies have overestimated the
service's marketability in the U.S. and as compared to Canada.
In the case of the mobile advertising concept, no actual market study has
been made, except observation that the captive audience traveling by car
and forced to observe what is ahead of him in traffic may be an untapped
audience.
(6) Potential liabilities from use of displays. We are liable for the safety of
passengers in the elevator in relation to the TV monitor and cannot
completely guarantee passenger safety at all times, thus the risk of injury
and lawsuit. Our vehicles may cause traffic problems for which the Company
my be liable.
Although we cannot foresee any specific dangers, we are not insulated from
the possibility of a law suit arising from the existence of our product in
an elevator. There may also be a risk of theft of the monitor, though it is
the intent to secure it well. The Company presently has no liability or
theft insurance coverage. We believe that this is appropriate at present
considering the nature of the service and the stage of development. There
can be no assurance that this decision will not result in consequent loss
to us and, therefore, to the investor (see "Business").
In the case of the vehicle advertising, there may be some liability if the
visual display is sufficiently distracting as to cause a motorist to not be
a safe driver. There may be also in the future legal restrictions on such
vehicular advertising.
(7) Ads in Motion is completely dependent on its management for the service
development, thus the talent base is very slim.
The current management is the only personnel available to develop the
service, and it is probable that we would not have sufficient capital to
hire personnel to continue the development of the service should management
for any reason cease or be unable to continue to work. Without personnel to
replace officer and director management, the company could not continue to
operate. The present management acquired its controlling interest in Ads in
Motion on May 9, 2007 (see "Certain Transactions").
(8) The investor has no say in the management of the company, being unable to
rescue the company from failure due to poor management.
A shareholder owns 84% of the company's common stock and will be in a
position to continue to control Ads in Motion. Such close control may be
risky to the investor because the entire company's operation is dependent
on a very few people who could lose their ability, or interest, in pursuing
the company's operation.
(9) No cash dividends are anticipated in the foreseeable future.
Since Ads in Motion does not anticipate that it will pay dividends, the
investor will only profit by the increase in value of his shares. Our
profits, if any, during the next several years, will necessarily be used to
develop and possibly expand the service lines and business.
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(10) There is no market for the common stock, thus investment is very illiquid.
Even after the distribution of the shares, there is no assurance a market
will develop. The common stock will not initially be traded on NASDAQ or
any Securities Exchange, which may result in the risk of minimal liquidity
of the investment.
(11) Loss of control by common stock shareholders due to Preferred Shareholder
rights.
Rights of preferred shareholders could potentially create an anti-takeover
effect, which could be a disadvantage for common stock holders to profit
from a possibly lucrative buy-out arrangement. The Company is authorized to
issue 20,000,000 shares of $0.001 par value preferred stock with the
rights, preferences, privileges, and restrictions thereof to be determined
by the Board of Directors of Ads in Motion. Preferred stock can thus be
issued without the vote of the holders of common stock. Rights could be
granted to the holders of preferred stock which could reduce the
attractiveness of Ads in Motion as a potential takeover target, make the
removal of management more difficult, or adversely impact the rights of
holders of common stock. No preferred stock is currently outstanding, and
we have no present plans for the issuance of any shares of preferred stock.
(12) Lack of a Patent could result in competition.
We have elected not to pursue a patent at this time until further
development of the company's potential is explored. There is risk that the
service will be seen and copied and we will lose the competitive edge.
(13) Management's involvement in other companies may result in insufficient time
spent to operate a successful business.
The Company's officers and directors are involved with other businesses.
While these businesses are not similar to Ads in Motion, they could compete
for management's time and energies. Each officer will be able to spend
approximately 4-5 hours per week on this company at this time. This amount
of time is deemed sufficient at this time and can be expanded as needed.
THE DISTRIBUTION
GENERAL
Approximately 5.2% of the outstanding common stock of Ads in Motion is presently
owned by Travers International, Inc. Travers International, Inc., is primarily a
business and financial consulting company specializing in the formation of small
businesses regarding capitalization and business structure. Travers
International, Inc., shareholders will not be required to pay for shares of our
common stock received in the distribution or to exchange shares of Travers
International, Inc., in order to receive our common stock.
The major shareholders of Travers are, by voting percentage:
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Howard H. Hendricks 45%
Michael Page 45%
The following table shows the Ads in Motion common stock ownership of Travers
Class A Preferred shareholders before and after the distribution.
Common Common Common
Shareholder before distribution after distribution % ownership
- ----------- ------------------- ------------------ -----------
J. Michael Page None 150,000 1.57
Howard H. Hendricks None 150,000 1.57
MANNER OF DISTRIBUTION
Pursuant to the plan of distribution, Travers International, Inc., will
distribute to its shareholders 500,000 shares of the common stock of Ads in
Motion. One share of Ads in Motion for each one share of Travers International,
Inc., common stock held of record as of May 31, 2007, and 20 shares of Ads in
Motion for each one share of Travers Preferred Class A shares held as of May 31,
2007. Fractional shares will be rounded up to the next full share. On May 31,
2007, Travers International, Inc., had issued and outstanding approximately
180,000 common shares and 15,000 Preferred Class A shares. On May 31, 2007,
Travers International, Inc., had approximately 150 shareholders of record.
Shares of Ads in Motion will be mailed to Travers International, Inc.
shareholders.
TAX CONSEQUENCES OF TRAVERS INTERNATIONAL, INC., DISTRIBUTION
Ads in Motion believes the following are the material federal income tax
consequences expected to result from the distribution under currently applicable
law. The following discussion is intended as general information only. It may
not be applicable to stockholders who are neither citizens nor residents of the
United States. It does not discuss the state, local, and foreign tax
consequences of the distributor. Stockholders should consult their own tax
advisors regarding the consequences of the distribution in their particular
circumstances under federal, state, local, and foreign tax laws.
Travers International, Inc., will recognize a gain or loss based upon the fair
market value of the Common stock at the date of the Distribution. This gain or
loss is measured by the difference between Travers' tax basis in the common
stock distributed in the distribution and the fair market value of that stock.
As a result of Travers International, Inc., having no current or accumulated
earnings and profits allocable to the distribution, no portion of the amount
distributed will constitute a dividend for federal income tax purposes.
Therefore, no portion of the amount received constitutes a dividend, and will
not be eligible for the dividends-received deduction for corporations. Each
Travers Inc., stockholder will have a tax basis in Ads in Motion's common stock
distributed equally to the fair market value of the common stock distributed on
the distribution date. The distribution is not taxable as a dividend. The
distribution will be treated as a tax-free return of capital to the extent that
the fair market value of such portion of the amount received does not exceed the
stockholder's basis in the Travers International, Inc., common stock held, and
as a capital gain if and to the extent that the fair market value of such
portion is greater than such tax basis.
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Any taxes payable by any recipient of shares of Ads in Motion's common stock in
the distribution will be the responsibility of such recipient.
The foregoing is only a summary of certain federal income tax consequences of
the distribution under current law and is intended for general information only.
Each stockholder should consult his tax advisor as to the particular
consequences of the distribution to such stockholder, including the application
of state, local and foreign tax laws.
EACH TRAVERS INTERNATIONAL, INC., SHAREHOLDER IS ADVISED
TO SEEK PROFESSIONAL TAX COUNSEL REGARDING ANY TAX LIABILITY
THAT MAY ARISE FROM THIS DISTRIBUTION
Above based on tax opinion provided by Karen A. Batcher, Esquire.
BLUE SKY LAWS
This Distribution is not being made in any jurisdictions of the United States in
which this distribution would not be in compliance with the securities or Blue
Sky laws of such jurisdiction. Only shareholders of Travers, Inc., residing in
the states set forth below may obtain the shares pursuant to the Distribution.
Ads in Motion initially selected the jurisdictions in which shareholders may
participate in the distribution after determining from the shareholder records
of Travers International, Inc., and from record owners the states where
substantially all the known owners reside.
IF A BENEFICIAL OWNER RESIDES IN A STATE OF THE UNITED STATES OF AMERICA NOT SET
FORTH BELOW, SUCH OWNER MAY NOT PARTICIPATE IN THE DISTRIBUTION.
CALIFORNIA
This Prospectus will be delivered to those Shareholders of Travers
International, Inc., eligible to participate in this Distribution.
NON-US RESIDENTS
Those Travers shareholders residing outside the United States of America will be
eligible to receive the distribution.
This Prospectus relates to the shares received in the distribution to the
Travers International, Inc., shareholders. The distribution of the Company's
common stock will be made to Travers International, Inc., shareholders without
any consideration being paid and without any exchange of shares by the
shareholders of Travers International, Inc. Neither Travers International, Inc.,
nor the Company, will receive any proceeds from the distribution by Travers
International, Inc., of such shares of the Company's common stock, nor from the
sale of any such shares by any persons who may be deemed to be the underwriters.
A copy of this Prospectus is being mailed to each Travers International, Inc.,
shareholder of record on May 31, 2007, together with the certificate
representing the number of the Ads in Motion shares to which he is entitled.
Persons wishing to evaluate the Ads in Motion shares being distributed to them
should review this Prospectus carefully.
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REASON FOR THE DISTRIBUTION
The Board of Directors of Travers International, Inc. has decided that the
shares of Ads in Motion in the hands of individual shareholders will provide
more value to the Travers International, Inc. shareholders than if corporately
owned. If at some future date the shares of Ads in Motion are publicly traded,
then shareholders may determine for themselves on an individual basis whether
they wish to sell their shares and obtain personal liquidity or wish to retain
the shares for possible future potential. There can be no assurance that the
shares will be publicly traded, or if so, whether the market will provide any
particular return to the shareholder.
COSTS OF DISTRIBUTION
Ads in Motion estimates that the total cost of the distribution will be
approximately $7,510. Travers International, Inc. has agreed to pay all such
costs except the audit.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
There is not currently a public market for our common stock. After the
distribution is complete, we intend to request trading on the OTCBB (Over the
Counter Bulletin Board). We cannot assure you as to the price at which our
common stock might trade after the distribution date or whether or not Ads in
Motion can qualify for listing. Listing requirements include being a reporting
company under the Securities Exchange Act of 1934 and having all required
reports current. Upon the distribution of the shares of this offering Ads in
Motion will be a reporting company and may apply to the NASD (National
Association of Securities Dealers) for listing. Ads in Motion has not discussed
market making with any broker-dealer.
Prior to the distribution, there were three common shareholders. After the
distribution, there will be 153 shareholders of common equity.
There are no securities subject to outstanding warrants or options to purchase
common stock.
We have never distributed dividends; and, since we are a development company, we
do not foresee doing so in the future.
There are 8,530,000 common shares that could be sold under Rule 144.
In general, under Rule 144, a person (or persons whose shares are aggregated)
who has satisfied a one-year holding period may sell, within any three-month
period, a number of shares which does not exceed the greater of one percent of
the then outstanding shares of common stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144 also permits the
sale of shares, without any quantity limitation, by a person who is not an
affiliate of the Company and who has beneficially owned the shares a minimum
period of two years. Hence, the possible sale of these restricted shares may, in
the future, dilute an investor's percentage of free-trading shares and may have
a depressive effect on the price of Ads in Motion's common stock. No shares,
other than the 500,000 shares which are the subject of this registration may be
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sold free of restriction. All shares other than the 500,000 to be distributed
are held by affiliates and subject to the restrictions of Rule 144.
DETERMINATION OF OFFERING PRICE
Since the distribution is a dividend by a present stockholder, there is no
offering price and no dilution to existing stockholders of Ads in Motion. For
the purpose of computing the instant registration fee, Ads in Motion and Travers
have set the price per share at $0.00058 per common share, which was the book
value on May 31, 2007. According to this calculation the total price for the
500,000 shares is $292. Such price has no relationship to Ads in Motion's
results of operations and may not reflect the true value of such Common stock.
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION
CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this prospectus filed on Form SB-2 may contain
forward-looking statements that are not historical facts and information. These
statements represent the Company's expectations or beliefs, including, but not
limited to, statements concerning future and operating results, statements
concerning industry performance, the Company's operations, economic performance,
financial conditions, margins and growth in sales of the Company's services,
capital expenditures, financing needs, as well as assumptions related to the
foregoing. For this purpose, any statements contained in the SB-2 filing that
are not statements of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based on current expectations
and involve various risks and uncertainties that could cause actual results and
outcomes for future periods to differ materially from any forward-looking
statement or views expressed herein.
Ads in Motion has sufficient cash resources to operate at the present level of
expenditure for the next 12 months. We estimate that we will need a minimum of
$5,000 to keep the Company in operation for an additional 12 months. As of
August 31, 2007 the Company had a cash balance of $8,000. Ads in Motion may
raise additional capital either through debt or equity. No assurances can be
given that such efforts will be successful. The Company has no specific plans at
present for raising additional capital.
The following are the projected future activities of the company in milestone
format. The specific timing of each milestone will depend on the ability of Ads
in Motion to raise capital, therefore these dates are estimates which may not be
met.
MILESTONES:
1. Business plan for business was purchased from Eugene Hill.
2. Installation of an advanced prototype into an elevator was completed
in July of 2007. Installation of a flat screen TV in a mobile van was
completed also in June 2007. Cost of elevator prototype installation
was approximately $700 and the mobile van installation prototype was
$1,500.
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3. Initial small market study to be carried out solely by Ads in Motion
in September 2007.
4. Development of a service brochure is planned for September 2007.
Estimated cost $300.
5. Additional market study using brochures planned for late October 2007.
Cost estimate $300.
6. Mail brochures to office buildings in San Diego and follow up with
telephone interviews by the end of October 2007- $500. Mail brochures
to local businesses in a few suburban neighborhoods and follow up with
a demonstration and visit.
7. Develop list of manufacturers and assess pricing. Determine price,
quantity, and delivery - November and December 2007.
8. Place order for small initial order of equipment - January 2008. Cost
will depend on information obtained in milestone 7.
9. Spring of 2008. Market initial service to companies identified in
milestones 5 and 6. Cost will depend on information from milestones 5
and 6 as to number of buildings.
10. Determine future service and sales effort from information gained from
initial sales effort. Depending on the size of the market and
potential, Ads in Motion may need to obtain addition capital from
loans or sale of additional equity.
In the next 12 months, Ads in Motion will pursue arrangements for the sale of
its services. Revenues are expected late 2008, but no assurance can be given. A
manufacturing source for the mounting brackets for elevators and the monitors
has been found, and pricing and availability is being investigated. Flat-screen
TVs are readily available. The holding frame to be installed in the vehicle has
been built by a local fabricator and a prototype installed. Ads in Motion
purchases the video screens systems for elevators from Ceiva, Inc. Initial
placement of these services in appropriate outlets will take place in the third
quarter of 2008 in San Diego County as a starting location (see
"Business-History").
BUSINESS
NATURE OF SERVICE:
The concept of elevator advertising is not completely new but has not, to the
company directors' knowledge, been developed for general use in a typical city
office building in San Diego County.
The concept of a flat screen in the rear of a traveling van with still "slide"
advertising digitally produced, has, as far as the directors' know, not been
produced or marketed.
Ads in Motion would install a TV monitor (with permission and cooperation from
building manager and elevator maintenance company), and would secure and
maintain that monitor. If there is more than one elevator in a building, more
than one installation could take place.
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The company would be responsible for soliciting advertising copy and pictures,
if appropriate, from the businesses in the building, as well as national
advertisers. The number of times the ad would run, how long, and the cost are
still negotiable and flexible and under study by the Company.
Ads in Motion would then design an attractive short ad and produce it for
viewing on the monitor. Timers would be set for duration of exposure. Ads could
be changed on a daily basis, if needed. The ads can be changed by Ads in Motion
over the Internet using a secure code.
Per-minute rates and repetitions have yet to be determined. Ads would be viewed
many times in a day, repeating for a continual flow of passengers.
Ads in Motion has one commissioned salesperson who operates as an independent
contractor. This salesperson will receive 10% of the gross value of any contract
which they have signed.
PROTOTYPE INSTALLATION:
Ads in Motion has permission to install a system in a small two-story office
building in Chula Vista, California. The tenants of the office building are
mostly physicians, and there is a pharmacy on the ground floor.
To market the vehicle advertising, businesses will be solicited for a certain
number of times their display is shown per day. The company will work with the
business client to produce eye-catching wording with the flexibility of daily
specials, special events or hours, entertainment figures, and a number of other
possibilities. These ads would be controlled by a laptop computer in the van and
would be mobile, especially in the evening hours when the ads would be more
noticeable.
HISTORY:
Present Business Activities: We are preparing a market study with inquiries to
appropriate types of businesses as to their opinion of the usefulness and
marketability of this service. This market study is being done by Ads in Motion,
without outside independent assistance. An initial prototype has been installed
in the elevator at a medical office building in Chula Vista, California. The
service is not commercially viable at this time.
COMPETITION:
When the company founders conceived the idea, they observed and inquired as to a
similar service available to consumers in San Diego, California. No such service
was found. It has been observed by a company shareholder that such a service is
available in British Columbia, Canada.
While somewhat similar mobile advertising has been observed, this precise
concept and its large variety of possible changes has not been observed, nor has
the existence of any such service.
A company in San Diego, California, has announced that it will start pulling
large inflatable signs behinds boats in San Diego Bay, starting in the Summer of
2007. The Company does not see this as direct competition.
14
PROPERTIES
Ads in Motion shares office with its independent sales contractor.
EMPLOYEES
All activities are carried out by the officers and directors. The Company has
one salesperson who operates as an independent contractor and receives 10% of
any contract received.
LEGAL PROCEEDINGS
Ads in Motion is not a party to any legal proceeding.
MANAGEMENT
The Executive Officers and Directors of the Company and their ages are as
follows:
Name Age Position Date Elected
---- --- -------- ------------
Eugene A. Hill 65 President May 9, 2007
CFO, Director
Anita C. Hill 63 Secretary May 9, 2007
Director
"S" Douglas Henderson 66 Director May 9, 2007
Eugene A. Hill has been president and a director of Ads in Motion since May
2007. During 2002, Mr. Hill was in business for himself and was a consulting
engineer for Cohu, Inc. As of May 9, 2007, Mr. Hill is not under a consulting
contract. From 1994 to September 10, 2001, he was employed by Cohu, Inc.,
selling video camera equipment. During this period he was also a Senior
Applications Engineer for Cohu, Inc., for video equipment. Cohu, Inc., is a
manufacturer of components for the CCTV industry. Mr. Hill holds an Associate of
Arts degree in electronics engineering technology. Eugene Hill is the husband of
Anita Hill.
Anita C. Hill has been secretary and a director of Ads in Motion since May 9,
2007. Ms. Hill is the owner and operator of Hillside Transcription Service (HTS)
since 1974. HTS transcribes medical records for hospitals, surgery centers, and
a wide variety of private physicians in San Diego County. During 2002, Ms. Hill
was president of the California Association for Medical Transcription. Anita
Hill is the wife of Eugene Hill.
"S" Douglas Henderson has been a director of Ads in Motion since May 2007. Since
1998 until the present, he is Admissions Director, Senior Flight Instructor of
San Diego Flight Training International, San Diego CA. Since July 2004, he has
worked part time as an income tax preparer for H & R Block. Mr. Henderson is
also part owner of J. Bright Henderson, Inc., a dealer in fine art.
15
The Directors are elected to serve until the next annual meeting of shareholders
and until their successors have been elected. Executive officers serve at the
discretion of the Board of Directors.
Each of the foregoing persons may be deemed a "promoter" and "parent" of the
Company as that term is defined in the rules and regulations promulgated under
the Securities and Exchange Act of 1933.
EXECUTIVE COMPENSATION
At present, Ads in Motion is operated by its Executive Officers and Directors at
no compensation and no compensation has been paid to date. No Executive Officer
or Director is expected to earn in excess of $50,000 in the foreseeable future.
Ads in Motion has no pension or profit-sharing plan. Ads in Motion may change or
increase salaries as Ads in Motion's profits and cash flow allow; however, there
are no present plans to do so.
OPTIONS
There are no options outstanding.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of August 30, 2007, the name, address, and
number of shares owned directly or beneficially by persons who own 5% or more of
the company's common stock and by each executive officer and director and owner
after the Distribution.
Shares/Percent(1) Shares/Percent(1)
Beneficial Owner as of June 1, 2007 after the Distribution
- ---------------- ----------------- ----------------------
"S" Douglas Henderson 8,000,000 - 84% 8,000,000 - 84%
4221 South Allison St.
Lakewood CO 8023
Eugene A.& Anita C. Hill 30,000 - 0.3% 30,000 - 0.3%
8624 Golden Ridge Rd.
Lakeside, CA
Travers International, Inc. 500,000 - 5.2% 0 - 0%
4190 Bonita Road
Bonita Ca, 91902
Edward F. Myers III 1,000,000 - 10.5% 1,000,000 - 10.5%
4139 Corral Canyon
Bonita, CA 91902
All Executive Officers 8,030,000 - 84.3% 8,030,000 - 84.3%
and Directors as a Group
(3 persons)
- ----------
(1) Based on 9,530,000 shares outstanding on August 31, 2007
16
CERTAIN TRANSACTIONS
On December 7, 2005, Ads in Motion (them named Paradise Yoga Retreats, Inc.)
sold 500,000 shares of its common stock to Travers International, Inc. for $100.
On May 9, 2007, Ads in Motion sold 8,000,000 shares of common stock to "S".
Douglas Henderson for a total of $5,000.
On May 9 2007, the Company issued 30,000 shares of common stock to Eugene Hill
for a business plan. The 30,000 shares were valued at $18.75.
On August 31, 2007 the Company sold 1,000,000 shares of its common stock to
Edward F. Myers III, the Company's sales manager, for the total amount to
$5,000.
The above sales were exempt from registration under the Securities Act of 1933,
as amended, in reliance on Section 4(2) for sales not involving a public
offering.
DESCRIPTION OF SECURITIES
The authorized common stock of Ads in Motion consists of 80,000,000 shares (par
value $0.0001 per share), of which 9,530,000 shares were outstanding on August
31, 2007. The holders of common stock are entitled to one vote per share on all
matters to be voted on by stockholders. Holders of common stock are entitled to
receive dividends when, as, and if declared by the Board of Directors. The
approval of proposals submitted to shareholders at a meeting requires a
favorable vote of the majority of shares voting. Holders of the common stock
have no preemptive, subscription, redemption, or conversion rights, and there
are no sinking fund provisions with respect to the common stock. All of the
outstanding shares of common stock are, and the shares to be transferred in the
Distribution will be, fully paid and non-assessable. As of August 31, 2007, Ads
in Motion had four common shareholders.
Penny Stocks must, among other things:
* Provide customers with a risk disclosure statement, setting forth
certain specified information prior to a purchase transaction;
* Disclose to the customer inside bid quotation and outside offer
quotation for this Penny Stock, or, in a principal transaction, the
broker-dealer's offer price for the Penny Stock;
* Disclose the aggregate amount of any compensation the broker-dealer
receives in the transaction;
* Disclose the aggregate amount of the cash compensation that any
associated person of the broker-dealer, who is a natural person, will
receive in connection with the transaction;
* Deliver to the customer after the transaction certain information
concerning determination of the price and market trading activity of
the Penny Stock.
Non-stock exchange and non-NASDAQ stocks would not be covered by the definition
of Penny Stock for:
(i) issuers who have $2,000,000 tangible assets ($5,000,000 if the issuer
has not been in continuous operation for 3 years);
17
(ii) transactions in which the customer is an institutional accredited
investor; and
(iii) transactions that are not recommended by the broker-dealer.
PENNY STOCK RULES
The Securities and Exchange commission has adopted rule 15g-9, which established
the definition of a "penny stock" for the purposes relevant to Ads in Motion as
any equity security that has a market price of less than $5.00 per share, or
with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require:
(1) that a broker or dealer approve a person's account for transactions in
penny stocks: and
(2) the broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quantity of the penny
stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:
(1) obtain financial information and investment experience objectives of
the person; and
(2) make a reasonable determination that the transactions in penny stocks
are suitable for that person, and the person has sufficient knowledge
and experience in financial matters to be capable of evaluating the
risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock:
(1) a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form,
(2) sets forth the basis on which the broker or dealer made the
suitability determination; and
(3) that the broker or dealer received a signed, written agreement from
the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about:
(1) the commissions payable to both the broker-dealer and the registered
representative;
(2) current quotations for the securities;
(3) the rights and remedies available to an investor in cases of fraud in
penny stock transactions; and
(4) monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited
market in penny stocks.
PREFERRED STOCK
Ads in Motion is also authorized to issue as many as 20,000,000 shares of the
preferred stock (par value $0.0001). The preferred stock may be issued in one or
18
more series with such preferences, conversion, and other rights, voting powers,
restrictions, limitations as to dividends and qualifications, and rights as the
Company's Board of Directors may determine.
As of August 31, 2007, there were no shares of preferred stock outstanding.
Preferred stock can thus be issued without the vote of the holders of common
stock. Rights could be granted in the future to the holders of preferred stock,
which could reduce the attractiveness of Ads in Motion as a potential takeover
target, make the removal of management more difficult, or adversely impact the
rights of holders of common stock.
LIMITATION OF LIABILITY OF DIRECTORS AND INDEMNIFICATION OF DIRECTORS AND
OFFICERS
The Certificate of Incorporation of Ads in Motion provides for indemnification
of directors and officers of Ads in Motion as follows:
EIGHTH. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law: (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct, or a
knowing violation of law; (iii) pursuant to Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article eighth
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment."
DELAWARE GENERAL CORPORATION LAW
Delaware General Corporation Law Section 145 provides that Ads in Motion may
indemnify any officer or director who was made a party to a suit because of the
Securities Act covering the common stock offered by this prospectus. This
position, including derivative suits, if he was acting in good faith and in a
manner he reasonably believed was in the best interest of Ads in Motion, except,
in certain circumstances, for negligence or misconduct in the performance of his
duty to Ads in Motion. If the director or officer is successful in his suit, he
is entitled to indemnification for expenses, including attorneys' fees.
TRANSFER AGENT
The transfer agent and registration for Ads in Motion's common stock is
Signature Stock Transfer, 2301 Ohio Dr. #100, Plano, TX 75093.
LEGAL MATTERS
The legality of the Shares of Common stock to be registered hereby will be
passed upon for Ads in Motion by Karen Batcher, Esquire.
19
EXPERTS
The financial statements of Ads in Motion for the periods from June 1, 2005, to
May 31, 2006, June 1, 2006, to May 31, 2007, and related notes which are
included in this Prospectus have been examined by Chang G. Park C.P.A.,
Independent Certified Public Accountants, and have been so included in reliance
upon the opinion of such accountant given upon their authority as an expert in
auditing and accounting.
ADDITIONAL INFORMATION
We have filed with the U.S. Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act covering the common stock
offered by this Prospectus, which constitutes a part of the registration
statement, omits some of the information described in the registration statement
under the rules and regulations of the Commission. For further information on
Ads in Motion and the common stock offered by this prospectus, please refer to
the registration statement and the attached exhibits. Statements contained in
this prospectus as to the content of any contract or other document referred to
are not necessarily complete, and in each instance, reference is made to the
copy filed as an exhibit to the registration statement; each of these statements
is qualified in all respects by that reference. The registration statement and
exhibits can be inspected and copied at the public reference section at the
Commission's principal office, 450 5th Street, N.W. Judiciary Plaza, Washington,
D.C. 20549 and through the Commission's Web site (http://www.sec.gov). Copies
may be obtained from the commission's principal office upon payment of the fees
prescribed by the Commission.
20
Chang G. Park, CPA, Ph. D.
* 371 E STREET * CHULA VISTA * CALIFORNIA 91910-2615 *
* TELEPHONE (858)722-5953 * FAX (858) 408-2695 * FAX (619) 422-1465
* E-MAIL changgpark@gmail.com *
- --------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Ads In Motion, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Ads In Motion, Inc. (A
Development Stage "Company") as of May 31, 2007 and 2006 and the related
statements of operations, changes in shareholders' equity and cash flows for the
years then ended and for the period from April 4, 2001 (inception) to May 31,
2007. 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 audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. 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 audit provides 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 Ads In Motion, Inc. as of May
31, 2007 and 2006, and the results of its operation and its cash flows for the
years then ended and for the period from April 4, 2001 (inception) to May 31,
2007 in conformity with U.S. generally accepted accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 3 to the financial statements,
the Company's losses from operations raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Chang G. Park
- -------------------------------
CHANG G. PARK, CPA
June 11, 2007
San Diego, CA. 91910
Member of the California Society of Certified Public Accountants
Registered with the Public Company Accounting Oversight Board
F-1
ADS IN MOTION, INC.
(A Development Stage Company)
Balance Sheets
- --------------------------------------------------------------------------------
As of As of
May 31, May 31,
2007 2006
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 3,664 $ --
-------- --------
TOTAL CURRENT ASSETS 3,664 --
NET FIXED ASSETS 1,314 --
-------- --------
TOTAL ASSETS $ 4,978 $ --
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ -- $ --
-------- --------
TOTAL CURRENT LIABILITIES -- --
TOTAL LIABILITIES -- --
STOCKHOLDERS' EQUITY
Common stock, ($0.0001 par value, 80,000,000 shares
authorized; 8,530,000 and 500,000 shares issued and
outstanding as of May 31, 2007 and 2006, respectively) 853 50
Additional paid-in capital 4,266 50
Deficit accumulated during development stage (141) (100)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 4,978 --
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 4,978 $ --
======== ========
See Notes to Financial Statements
F-2
ADS IN MOTION, INC.
(A Development Stage Company)
Statements of Operations
- --------------------------------------------------------------------------------
April 4, 2001
(inception)
Year Ended Year Ended through
May 31, May 31, May 31,
2007 2006 2007
---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ --
---------- ---------- ----------
TOTAL REVENUES -- -- --
COST OF GOODS SOLD
Purchases -- -- --
---------- ---------- ----------
TOTAL COSTS GOODS SOLD -- -- --
GROSS PROFIT -- -- --
OPERATING EXPENSES
Administrative Expenses 41 100 141
---------- ---------- ----------
TOTAL OPERATING EXPENSES 41 100 141
---------- ---------- ----------
NET INCOME (LOSS) $ (41) $ (100) $ (141)
========== ========== ==========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,006,000 241,096
========== ==========
See Notes to Financial Statements
F-3
ADS IN MOTION, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From April 4, 2001 (Inception) through May 31, 2007
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Development
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
<c>
BALANCE, APRIL 4, 2001 (INCEPTION) -- $ -- $ -- $ -- $ --
BALANCE, MAY 31, 2001 -- -- -- -- --
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2002 -- -- -- -- --
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2003 -- -- -- -- --
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2004 -- -- -- -- --
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2005 -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Stock issued for cash and service
on December 7, 2005 @ $0.002 per share 500,000 50 50 100
Net lncome, May 31, 2006 (100) (100)
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2006 500,000 50 50 (100) --
---------- ---------- ---------- ---------- ----------
Stock issued for cash on May 9, 2007
@ $0.000625 per share 8,000,000 800 4,200 5,000
Stock issued for service on May 9, 2007
@ $0.000625 per share 30,000 3 16 19
Net loss, May 31, 2007 (41) (41)
---------- ---------- ---------- ---------- ----------
BALANCE, MAY 31, 2007 8,530,000 $ 853 $ 4,266 $ (141) 4,978
========== ========== ========== ========== ==========
See Notes to Financial Statements
F-4
ADS IN MOTION, INC.
(A Development Stage Company)
Statements of Cash Flows
- --------------------------------------------------------------------------------
April 4, 2001
(inception)
Year Ended Year Ended through
May 31, May 31, May 31,
2007 2006 2007
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (41) $ (100) $ (141)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
(Increase) decrease in depreciation 22 -- 22
Stock issued for services 19 50 69
Changes in operating assets and liabilities: -- -- --
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES -- (50) (50)
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in equipment (1,336) -- (1,336)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,336) -- (1,336)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 5,000 50 5,050
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 5,000 50 5,050
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 3,664 -- 3,664
CASH AT BEGINNING OF YEAR -- -- --
-------- -------- --------
CASH AT END OF YEAR $ 3,664 $ -- $ 3,664
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ --
======== ========
Income Taxes $ -- $ --
======== ========
See Notes to Financial Statements
F-5
ADS IN MOTION, INC.
(Formerly Paradise Yoga Retreats Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2007 and 2006
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Ads In Motion, Inc. (the Company) was incorporated under the laws of the State
of Delaware on April 4, 2001. The Company has developed the concept of an
advertising service for businesses within a mote-than-one story office building
to display promotional advertising on a TV monitor inside the building's
elevator. The Company is also developing advertising on a mobile van. The
company changed its name from Paradise Yoga Retreats Inc. to Ads In Motion, Inc.
on May 7, 2007
The Company is in the development stage. Its activities to date have been
limited to capital formation, organization, and development of its business plan
and a target customer market.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a May 31, year-end.
B. CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
C. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Equipment and fixtures are being
depreciated using the straight-line method over the estimated asset lives, 5
year.
D. REVENUE RECOGNITION
The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
No. 104, "Revenue Recognition" ("SAB 104"). The Company generates revenue from
the sale of candles. SAB 104 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services rendered; (3) the seller's price
to the buyer is fixed and determinable; and (4) collectibility is reasonably
assured. Amounts billed or received from customers in advance of performance are
recorded as deferred revenue.
F-6
ADS IN MOTION, INC.
(Formerly Paradise Yoga Retreats Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2007 and 2006
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. INCOME TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
F. BASIC EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective April 4, 2001 (inception).
Basic net loss per share amounts is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
G. USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. In accordance with FASB 16 all
adjustments are normal and recurring.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company generated net losses of
$141 during the period from April 4, 2001 (inception) through May 31, 2007. This
F-7
ADS IN MOTION, INC.
(Formerly Paradise Yoga Retreats Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2007 and 2006
NOTE 3. GOING CONCERN (continued)
condition raises substantial doubt about the Company's ability to continue as a
going concern. The Company's continuation as a going concern is dependent on its
ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds through debt or equity offerings.
Management has yet to decide what type of offering the Company will use or how
much capital the Company will raise. There is no guarantee that the Company will
be able to raise any capital through any type of offerings.
NOTE 4. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common.
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
May 31, 2007 May 31, 2006
------------ ------------
Equipment $ 1,336 $ --
-------- --------
Total Fixed Assets 1,336 --
Less: Accumulated Depreciation (22) --
-------- --------
Net Fixed Assets 1,314 --
======== ========
Depreciation expenses for the year ended May 31, 2007 and 2006 were $22 and $-,
respectively.
NOTE 6. RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal property. The officers
and directors of the Company are involved in other business activities and may,
in the future, become involved in other business opportunities as they become
available, such persons may face a conflict in selecting between the Company and
their other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
F-8
ADS IN MOTION, INC.
(Formerly Paradise Yoga Retreats Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2007 and 2006
NOTE 7. NET OPERATING LOSSES
As of May 31, 2007, the Company has a net operating loss carryforwards of
approximately $141. Net operating loss carryforward, expires twenty years from
the date the loss was incurred.
NOTE 8. INCOME TAXES
May 31, 2007 May 30, 2006
------------ ------------
Deferred tax assets:
Net operating tax carryforwards $ 21 $ 15
Other 0 0
-------- --------
Gross deferred tax assets 21 15
Valuation allowance (21) (15)
-------- --------
Net deferred tax assets $ 0 $ 0
======== ========
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 9. STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair
value of the consideration received. Transactions with employees' stock issuance
are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
On December 7, 2005 the Company issued 500,000.shares of common stock to Travers
International, Inc. for cash of $50.00 and for consulting services of $50.00.
On May 9, 2007 the Company issued 8,000,000 shares of common stock to S. Douglas
Henderson for cash of $5,000.
On May 9, 2007 the Company issued 30,000 shares of common stock to Eugene Hill
for a business plan valued at 18.75.
As of May 31, 2007 and 2006 the Company had 8,530,000 and 500,000 shares of
common stock issued and outstanding, respectively.
F-9
ADS IN MOTION, INC.
(Formerly Paradise Yoga Retreats Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 2007 and 2006
NOTE 10. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock:
Common stock, $ 0.0001 par value: 80,000,000 shares authorized; 8,530,000 and
500,000 shares issued and outstanding as of May 31, 2007 and 2006, respectively.
Preferred stock, $ 0.0001 par value: 20,000,000 shares authorized; no shares
issued and outstanding as of May 31, 2007 and 2006, respectively.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTOR AND OFFICERS.
Delaware General Corporation Law Section 145 provides that the Company may
indemnify any officer or director who was made a party to a suit because of his
position, including derivative suits, if he was acting in good faith and in a
manner he reasonably believed was in the best interest of the Company, except,
in certain circumstances, for negligence or misconduct in the performance of his
duty to the Company. If the director or officer is successful in his suit, he is
entitled to indemnification for expenses, including attorneys' fees. Article
Seventh of the Company's Certificate of Incorporation provides for
indemnification of the Company's officers and directors to the fullest extent
permitted by law. Indemnification agreements have been entered into with all
officers and directors of the Company.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of the estimated amounts of all expenses
in connection with the Distribution of the securities which are the subject of
this Registration Statement.
Securities and Exchange Commission Registration Fee $ 10
Printing $2,000
Legal Fees and Expenses $1,500
Accounting and Audit Fees $4,000
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TOTAL $7,510
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Travers International, Inc., has agreed to pay all costs, except for Audit,
incurred in connection with the distribution of the shares which are the subject
of this Registration Statement.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On December 7, 2005, Ads in Motion (them named Paradise Yoga Retreats, Inc.)
sold 500,000 shares of its common stock to Travers International, Inc., for
$100.
On May 9, 2007, Ads in Motion sold 8,000,000 shares of common stock to "S"
Douglas Henderson for a total of $5,000. On May 9 2007, the Company issued
30,000 shares of common stock to Eugene Hill for a business plan. The 30,000
shares were valued at $18.75.
On August 31, 2007 the Company sold 1,000,000 shares of its common stock to
Edward F. Myers III, the Company's sales manager, for the total amount to
$5,000.
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The above sales were exempt from registration under the Securities Act of 1933
as amended in reliance on Section 4(2) for sales not involving a public
offering. In each case, the investor was sophisticated and had a previous
business or personal relationship with one or more of the directors of the
Company.
ITEM 27. EXHIBITS.
The following is a list of exhibits filed as part of the Registration Statement:
3.(i) Certificate of Incorporation*
3.(ii) Bylaws*
5.1 Opinion of Karen Batcher, Esq.*
23.1 Consent of Karen Batcher, Esq.*
23.2 Consent of Chang G. Park C.P.A.*
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* Included by reference to SB2 filed June 21, 2007.
ITEM 28. UNDERTAKINGS.
ADS IN MOTION, INC. will:
(1) File, during any period in which it offers or sells securities, a post
effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of Prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities, arising under the Securities Act of
1933 may be permitted to Directors, Officers, or persons controlling the Company
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pursuant to the foregoing provisions, or otherwise, the Company has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any action, suite or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company 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 as to whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form SB-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of San Diego, State of California, on the 17th day of
September 2007.
ADS IN MOTION, INC.
September 17, 2007
By: EUGENE A. HILL
/s/ EUGENE a. HILL
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EUGENE A. HILL
President and Director
EUGENE A. HILL/
/s/ EUGENE A. HILL/
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EUGENE A. HILL
Principal financial officer
Principal Accounting officer
ANITA C. HILL
/s/ ANITA C. HILL
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ANITA C. HILL
Secretary and Director
"S" DOUGLAS HENDERSON
"S" DOUGLAS HENDERSON
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Director
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