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GRAND MOTION, INC.
601 Union Street, Suite 4200
Seattle, WA 98101
Phone: (206) 652-3283
Fax: (206) 652-3205
April 30, 2007
U.S. Securities & Exchange Commission
Division of Corporate Finance
100 F Street NE
Washington, D.C. 20002
Mail Stop: 4561
Attention: Gennifer Gowetski, Attorney-Advisor
Dear Sirs/Mesdames:
Re: Grand Motion, Inc. - Registration Statement on Form SB-2
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Amendment No. 1 - File No. 333-141094
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Further to your letter dated April 4, 2007 concerning the deficiencies in our
registration statement on Form SB-2, we provide the following responses:
General
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1. Please provide us with copies of any graphics, maps, photographs, and
related captions or other artwork including logos that you intend to
use in the prospectus.
We have included a corporate logo on page # 3 of the prospectus.
Prospectus Summary, page 1
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2. Please disclose in the summary that you are subject to a going concern
opinion from your auditors.
We have disclosed in the summary that we are subject to a going concern
opinion from our auditors.
3. Please revise the summary to balance your disclosure with a discussion
of your competitive weaknesses and risks associated with your business
and this offering, including your lack of operating history, your lack
of revenues and the losses that you have incurred since inception.
We have amended the summary section of the prospectus with a discussion
of our competitive weaknesses and risks associated with our business
and this offering.
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4. We note your disclosure on page 1 that Grand Motion is a development
stage company that will distribute and market specialty tours, spa
packages and wellness-oriented vacations. We further note that you will
create a bi-annual catalogue listing the tours and vacations offered by
Grand Motion on behalf of its partners. Please expand your disclosure
to explain what you mean by "distribute" and "partners." In this
connection, please revise to clarify whether your parthership
arrangement includes sharing of profits and losses.
We have expanded our disclosure with an explanation of the definition
fo "distribute" and "partners" and clarified the terms of our
partnership arrangement.
5. We note your disclosure on page l that you have executed one
Distributor and Marketing Agreement with "OOOAvia Mir." We further
note your statement on page 9 that if the maximum amount of $375,000
is raised you will be able "to fulfill your obligations to Avia Mir."
Please expand your disclosure in the summary and throughout the
prospectus to describe the material terms of the agreement as well
as your obligations to Avia Mir. For example only, we note that
Section 2.1 of the Marketing and Agency Agreement dated as of November
20, 2006 indicates that Grand Motion will incur "web sites development
expenses up to $10,000 by February 28, 2007" and minimum marketing
expenses of $50,000 USD over the initial two year term of the
agreement.
We have expanded the disclosure of the material terms of the agreement
with "OOO Avia Mir" in the summary and throughout the prospectus where
applicable.
6. We note that you will use the proceeds to pay for administrative
expenses, the implementation of your business plan and general working
capital. Please expand your disclosure in the summary and throughout
the prospectus to provide a more detailed breakdown of your expenses
and clarify what aspects of your business plan you will be able to
implement if only the minimum amount of this offering is raised.
We have expanded the disclosure of our expenses and clarified the
aspects of our business plan in terms of its implementation if only
minimum amount of this offering is raised.
Risk Factors. page 8
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7. Mitigating statements are not appropriate in the risk factor
discussion. Please revise your risk factors to remove all mitigating
language. For example only, we note the statement on page 10 that you
intend to generate revenue as per your agreement with Avia Mir and the
statement on page 11 that your director has prior experience in the
travel industry.
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We have revised risk factors section of this prospectus and removed all
mitigating language.
8. We note that you intend to distribute and market specialty tours, spa
packages and wellness-oriented vacations in Europe and Asia to the
United States market. Please expand your discussion, as appropriate, to
discuss currency risks.
We have amended our discussion with currency risks disclosure.
Our only sources of potential revenue is our marketing and agency agreement...,
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page 10
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9. We note that Avia Mir may terminate The marketing and agency agreement
if you fail to perform any material provision of the agreement and fail
to cure the default within 30 days after receiving notice from Avia
Mir. Please expand your disclosure to briefly describe the material
provisions of the agreement.
We have expanded our disclosure with description of material provisions
of our agreement wih Avia Mir.
Our plan to develop relationships with strategic partners..., page 10
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10. We note your statement that you will need to develop short- and
long-term relationships with vendors in the travel industry in order to
enter into sales agreements for your products. Please expand your
disclosure to briefly describe your products or clarify, if true, that
you are referring to your marketing services. Similarly, please clarify
the reference to products on page 9 under the second risk factor
heading.
We have revised our statement to clarify that products refers to our
marketing services.
Our future success is dependent on our existing key employees..., page 10
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11. We note your statement on page 10 that your success is dependent on
your existing key employees and depends on the continuing efforts and
abilities of your current management team. We further note your
statement on page 25 that you do not have any employees. Please revise
to clarify your disclosure and identify your current management team.
We have revised the disclosure of the management team and removed
reference to our existing employees.
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Because we are small and do not have much capital.... page 11
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12. We note your statement on page 11 that you may not be able to attract
new customers and will be dependent on your existing marketing
agreement to generate revenue. Please revise your disclosure to clarify
what you mean by customers. It is not clear whether you are referring
to individuals that may purchase vacations through your website once it
is operational or to tour operators that may use your marketing
services.
We have revised our disclosure with clarification of our potential
customers.
Because the SEC imposes additional sales practice requirements..., page 11,
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13. We note your reference to the OTCBB and your statement that if your
common stock "becomes listed." Please revise your disclosure throughout
the prospectus to note that shares are not listed on the OTCBB, they
are quoted.
We have revised the disclosure throughout the prospectus and amended
reference to our common shares with appropriate definition.
Because our directors will own 57.1 %... page 12
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14. Please revise your disclosure to clarify that you currently have only
one director, who owns 100% of your outstanding shares and identify
this director.
We have amended our disclosure with current information on the
ownership of our common shares and our director identification.
Use of Proceeds, page 12
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15. We note that if the minimum amount is sold you will use $3,460 toward
outstanding liabilities and if the maximum amount is sold you will use
$20,758 toward outstanding liabilities. Please expand your disclosure to
briefly describe these liabilities and explain what the consequences are
to you, if any, if you are unable to pay the $20,758 of outstanding
liabilities.
We have expanded our disclosure with detailed description of our
liabilities and any potential consequences to us in case we would not be
able to pay the $20,758 of outstanding liabilities.
Dilution of the Price You Pay for Your Shares, page 13
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16. We note your statements on page 14 that if a certain number of shares
are sold, "you will own" an appropriate percentage of the total number
of shares then outstanding. Please revise your disclosure to clarify
that it is the shareholders, acquiring shares in this offering, who
would own the shares.
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We have revised our disclosure with reference to the shareholders
acquiring shares pursuant to this offering.
17. Please advise us why you presented dilution information based on the
sale of 75% of the shares being offered. If you anticipate that a 75%
success rate is the most likely outcome of this offering, please state
this fact in to prospectus. If you have no basis for anticipating the
sale of 75% of the shares being offered, please revise to remove this
scenario.
We have removed the "75 % success rate" scenario from the prospectus.
Plan of Distribution, page 15
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18. We note your statement on the cover page that your common stock will be
sold by Janetta Voitenkova, your director. We further note your
statement on page 15 that you will sell the shares in this offering
through your two directors. Finally, we note the chart on page 28 that
indicates you have one director, Janetta Voitenkova. Please revise your
disclosure throughout the prospectus to clarify, if true, and identify
Janetta Voitenkova as the only individual that will sell your shares.
We have amended our statement on page 15 with reference to our sole
director as the only individual that will sell our shares.
Description of Business, page 17
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19. We note your statement on page 17 that you have begun very limited
operations and will advance your operations until you complete this
offering. Please expand your disclosure to briefly describe your limited
operations and clarify what you mean by "advance our operations until we
complete this offering."
We have expanded our disclosure with a description of our limited
operations and a description of advancing our operations until we
complete the offering.
20. Please provide independent third-party support for industry data and
comparative factual assertions included in the disclosure. In providing
support, clearly mark the location of the information you believe is
supportive of the statement referenced. We note the following examples:
o Information and performance data regarding travel and tourism in the
United States on pages 17 and 18;
o Income data attributed to Unity Marketing on page 18;
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o Information regarding outlook for luxury travel in reference to
baby boomers on page I8; and
o Statements regarding the costs of providing healthcare in
Western countries as opposed to more cost effective medical
treatment in less developed countries on page 18.
We have removed industry data and comparative factual assertions from
this prospectus.
21. Please provide us with highlighted copies of any study or report that
you cite in the disclosure. For example, we note you refer to Unity
Marketing and Hotel News Resource. Please tell us whether the industry
reports or studies that you rely on were prepared for you and whether
you compensated the parties that prepared these reports or studies.
Alternatively, please file the experts' consent as exhibits to the
registration statement.
We have removed all data and references to industry reports.
Marketing, page 23
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22. Please revise your marketing discussion to clarify what steps you
plan to take assuming that only the minimum offering amount is
raised.
We have revised our marketing discussion with clarification on the
company's plan of operation assuming that only the minimum offering
amount is raised.
Management's Discussion and Analysis or Plan of Operation, page 24
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23. We note your statement on page 25 that you believe the money you raise
will last for three years assuming you raise the maximum amount. We
further note your statement on page 9 that, if you are successful in
raising the maximum amount, you expect these proceeds to last you
approximately 24 months. Please revise your disclosure to reconcile
this discrepancy.
We have revised the disclosure.
24. We note your statement on page 26 that you believe that it will cost a
minimum of $7000 for execution of your marketing plan for the web
portal over the next 12 months. Please expand your disclosure to
clarify, if true, that this amount is in addition to the $12,000
estimate for the cost of the web portal.
<page>
We have expanded our disclosure with clarification on the cost of the
website and expenses associated with execution of the marketing plan
for web portal.
Limited Operating History; Need for Additional Capital, page 26
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25. We note your statement on page 26 that your business is subject to
risks inherent in the establishment of a new business enterprise,
including limited capital resources and possible cost overruns due to
price and cost increases in services and products. Please expand your
disclosure to discuss more specifically possible costs overruns and how
they may impact your business.
We hav e expanded our disclosure with discussion on the possible costs
overruns.
26. We note your statement on page 26 that you are seeking equity financing
to provide for the capital required to market your services. Please
revise to clarify whether you are seeking equity financing in addition
to this offering.
We have revised the statement with clarification on our plans for
equity financing.
Liquidity & Capital Resources, page 27
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27. We note that your president is owed $17,083 for cash advances and
expenditures incurred on behalf of the company. Please expand your
disclosure in this section and page 29 to discuss whether there is a
written agreement for the loan and briefly describe the material terms.
We have expanded our discussion with disclosure of the terms of the
written loan agreement with our president.
Directors and Officers, page 28
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28. We note that Janetta Voitenkova owns sales agency with clients in the
telecommunications industry. Please expand your disclosure to describe
what you mean by "sales agency."
We have revised our disclosure with explanation of the sales agency
relationship between Ms.Voitenkova and her clients in the
telecommunication industry.
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Compensation, Rage 29
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29. We note footnote (1) to the $2000 salary in the compensation table.
Please expand your disclosure to provide the footnote or omit it, as
appropriate. In addition, please clarify whether the $2,000 in salary
is the same as the $2,000 in management services that were charged to
operations. In this connection, please revise to provide a narrative to
the summary compensation to explain whether such salary was determined
based on an unwritten agreement or arrangement. Please see Item 402(c)
of Regulation S-B.
We have provided footnote (1) to the compensation table. In addition we
have provided narrative to the summary compensation table with required
disclosure as per Item 402(c) of Regulation S-B.
Certain Relationships and Related Transactions, page 29
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30. We note that the president of the company provided a $17,000 loan to
the company and that the company owed $3,675 to the president for
expenses. Please discuss whether the $3,675 amount is in addition to
the $17,000 loan and reconcile these amounts with the $17,083 amount
referenced on page 27. Further please, revise to include the
information required by Item 404(a)(5), including the amount of
principal outstanding as of the latest practicable date.
We have amended our disclosure with clarification of the total amount,
including the amount of loan principal, due to our president as of the
latest practicable date.
Notes to the Financial Statements
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Note 3 - Distributor Rights
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31. In a subsequent event note or in the MD &A, please disclose whether or
not you have complied with the marketing and agency agreement in regard
to the $10,000 web site development expenses that were to be incurred by
February 28, 2007.
We have included in the prospectus our interim financial statements for
the three -month period ended February 28, 2007, with information on the
amount incurred by February 28, 2007, in regard to the web site
development.
Pact II. Information Not Required in Prospectus
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Item 26. Recent Sales of Unregistered Securities, page 46
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32. Please expand your disclosure to provide the basis for your reliance on
Regulation S.
We have expanded our disclosure with the basis of our reliance on
Regulation S.
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Undertakings, page 47
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33. Please revise this section to include the undertakings required by Item
512 of Regulation S-B.
We have revised this section with enclosure of the undertakings required
by Item 502 of Regulation S-B.
Yours truly,
/s/ Janetta Voitenkova
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Grand Motion, Inc.
Janetta Voitenkova, President