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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMENDMENT NO. 2
Grand Motion, Inc.
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(Name of small business issuer as specified in its charter)
Nevada 8742 Pending
- ------------------------------ -------------------------- -------------------
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
601 Union Street, Suite 4200
Seattle, WA 98101
Phone: (206) 652-3283
Fax: (206) 652-3205
(Address and Telephone Number of Principal Executive Offices and Principal
Place of Business)
State Agent and Transfer Syndicate, Inc.
112 North Curry Street
Carson City, NV 89703
(775) 882-1013
(Name, Address and Telephone Number of Agent for Service)
Approximate Date of Commencement of Proposed Sale to Public:
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, check
the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) 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 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 this form is a post-effective amendment filed pursuant to Rule 462(d) 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. |_|
<page>
<table>
<caption>
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Proposed
Maximum Proposed Maximum
Class of Securities to Amount to be Offering Price Aggregate Offering Amount of
be
Registered Registered per Share Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Common Stock 25,000,000 $0.015 $375,000.00 $40.13
- -------------------------------------------------------------------------------------------------------------------
</table>
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.
2
<page>
PROSPECTUS
Grand Motion, Inc.
[company's logo
see exhibit 99.1 pdf]
3,000,000 SHARES MINIMUM - 25,000,000 SHARES MAXIMUM
COMMON STOCK
There is no public market for our common stock.
We are offering a minimum of 3,000,000 and a maximum of 25,000,000 shares of our
common stock on a direct public offering, without any involvement of
underwriters or broker-dealers. The offering price is $0.015 per share. In the
event that 3,000,000 shares are not sold within 180 days, at our sole
discretion, we may extend the offering for an additional 90 days. In the event
that 3,000,000 shares are not sold within the 180 days, or within the additional
90 days if extended, all money received by us will be promptly returned to the
shareholders without interest or deduction of any kind. If at least 3,000,000
shares are sold within 180 days, or within the additional 90 days, if
extended, all money received by us will be retained by us and there will be no
refund. Funds will be held in a separate account. The foregoing account is
not an escrow, trust or similar account. It is merely a separate account under
our control where we will segregate the shareholder's funds.
There are no arrangements to place the funds in an escrow, trust or similar
account.
Our common stock will be sold by Janetta Voitenkova, our director.
Investing in our common stock involves risks. See "Risk Factors" starting at
page 8.
<table>
<caption>
Offering Price Expenses Proceeds to Us
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<s> <c> <c> <c>
Per Share - Minimum $ 0.015 $ 0.0035 $ 0.0115
Per Share - Maximum $ 0.015 $ 0.0004 $ 0.0146
Minimum $ 45,000 $ 10,540 $ 34,460
Maximum $ 375,000 $ 10,540 $ 364,460
</table>
The difference between the "Offering Price" and the "Proceeds to Us" is $10,540.
The $10,540 reflects the expenses of the offering. The expenses per share would
be adjusted according to the offering amounts between the minimum and maximum.
The $10,540 will be paid to unaffiliated third parties for expenses connected
with this offering. The $10,540 will be paid from current funds that we have and
the first proceeds of this offering once the minimum subscription has been
completed.
Our common stock is presently not traded on any market or securities exchange.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Neither the US Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is June 12, 2007.
3
<page>
Dealer Prospectus Delivery Obligation
Until 180 days after the effective date of this Prospectus, all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
4
<page>
<table>
<caption>
Table of Contents
PART I -- INFORMATION REQUIRED IN PROSPECTUS
<s> <c>
Summary of Prospectus
Our Company 7
The Offering 8
Financial Summary Information 9
Risk Factors 9
1. We may not be able to continue as a going concern if we do not obtain additional financing.
2. We lack operating history and have losses which we expect to continue into the future. 10
3. We are mainly dependent upon the funds to be raised in this offering to advance our business. 10
4. Foreign currency exchange rate fluctuations may adversely affect our business 10
5. Our only source of potential revenue is our marketing and agency agreement with Avia Mir. 10
6. Our plan to develop relationships with strategic partners and vendors may not be successful. 11
7. Our future success is dependent on our existing key employees, and hiring and assimilating new 11
key employees.
8. Our operating results may prove unpredictable which could negatively affect our operating 11
results.
9. Because our management does not have prior experience in distribution and brand development in 11
the travel industry, our business has a higher risk of failure.
10. Because we are small and don not have much capital, we must limit our efforts in marketing of 12
our services and products.
11. Our revenue is highly dependent on the travel and transportation
industries and a prolonged 12 decrease in travel booking volumes
would reduce our revenue. 12
12. Because there is no public trading market for our common stock, you may not be able to resell 12
your stock.
13. Because the SEC imposes additional sales practice requirements on brokers who deal in our
shares which are penny stocks, some brokers may be unwilling to trade them. 12
14. We do not intend to pay dividends. 13
15. There is a lack of shareholder control. 13
Use of Proceeds 13
Determination of Offering Price 14
Dilution of the Price per Share 15
Plan of Distribution; Terms of the Offering 16
Section 15(g) of the Exchange Act 17
Offering Period and Expiration Date 18
Procedures for Subscribing 18
Right to Reject Subscriptions 18
Description of Business 18
General 18
Spa Travel Industry Overview 18
Our Services 19
Competition 23
Marketing 23
Trademarks and Copyrights 25
Management's Discussion and Analysis or Plan of Operation 25
Plan of Operation 25
Need for Additional Capital 26
Results of Operations 27
Liquidity and Capital Resources 27
Known Material Trends and Uncertainties 28
Legal Proceedings 28
Directors and Officers 28
Compensation 28
Certain relationships and related transactions 30
Audit Committee 30
Security Ownership of Certain Beneficial Owners and Management 30
Changes in Control 31
Description of Securities 31
</table>
5
<page>
<table>
<caption>
<s> <c>
Common Stock 31
Voting Rights 31
Dividend Policy 31
Stock Transfer Agent 31
Shares Eligible for Future Sale 31
Interests of Named Experts and Counsel 32
Reports to Security Holders 32
Market for Common Equity and Related Stockholder Matters 32
Financial Statements 33
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 53
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS 53
Indemnification of Officers and Directors 53
Other Expenses of Issuance and Distribution 54
Recent Sales of Unregistered Securities 54
Exhibits 55
Undertakings 55
Signatures 57
</table>
6
<page>
PART I -- INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS SUMMARY
The following summary highlights selected information contained in this
prospectus. This summary does not contain all the information that may be
important to you. You should read the more detailed information contained in
this prospectus, including but not limited to, the risk factors beginning on
page 4. References to "we," "us," "our," "Grand Motion," or the "company" mean
Grand Motion, Inc.
Forward-Looking Statements
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results may differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in the "Risk Factors" section and elsewhere in this prospectus.
Our Company
Grand Motion, Inc. is a development stage company that will market specialty
tours, spa packages and wellness-oriented vacations in Europe and Asia to the
United States market. We intend to solely market tours, packages and vacations
from tour operators. We will do this by entering into exclusive marketing and
agency agreements with tour operators who wish to promote their products in the
United States.
Grand Motion, Inc. will develop a web portal, www.grandmotion.com, for
promotion of wellness tour packages in Europe and Asia. The web portal will list
offerings from tour operators and direct the user to the tour operator's site
for the final purchase. We will market the web portal via print and web
advertising to generate traffic.
We will create a bi-annual catalogue listing the tours and vacation
packages offered by Grand Motion on behalf of the tour operators who enter into
marketing agreements with the company. The catalogue will be distributed free of
charge to travel agencies and consumers by mail and through our participation in
industry events. Grand Motion will exhibit at major travel industry tradeshows
in the United States, Europe and Asia to attract other tour operators to enter
into Marketing Agreements and increase the range of packages offered on our
web portal and in the catalogue and to promote our catalogue and web portal in
the U.S. market.
To date, we have executed one Distributor and Marketing Agreement with OOOAvia
Mir ("Avia Mir"), a Travel Agency and Tour Operator based in Moscow, Russia.
Avia Mir sells packages to spas, medical rehabilitation facilities, and
wellness-oriented destinations. Pursuant to a Marketing and Agency Agreement
(the "Agreement") dated November 20, 2006, the Company acquired rights for
marketing and promotion of specialty tours, airline tickets and charter flights
("Products") provided by Avia Mir in the United States of America and Canada for
the following consideration:
- Cash payment of $1,000 (one thousand dollars) upon signing of this
Agreement;
- The Company incurring web site development expenses up to $10,000 by
February 28, 2007;
- The Company incurring minimum marketing expenses of $50,000 USD over
the initial two year term of this Agreement
Grand Motion, Inc. will be paid commission on a quarterly basis at the
rate of 5.0% of gross sales resulting from the sale of the Products by Avia Mir.
We will not share our profits or losses with Avia Mir. If the agreement is
terminated, we may not find another source of income and may have to suspend or
cease operations. Our marketing and agency agreement with Avia Mir has an
initial term of two years.
7
<page>
As at February 28, 2007, the Company paid $1,000 upon signing the
Agreement and incurred $8,500 in website development costs.
We have no revenues, have incurred losses of $20,134 since our inception on July
7, 2006, and have relied upon the sale of our securities in unregistered private
placement transactions and cash advances from our sole director, Ms. Janetta
Voitenkova, to fund our operations. Accordingly, for the foreseeable future, we
will continue to be dependent on additional financing in order to maintain our
operations and continue with our corporate activities. Due to the uncertainty of
our ability to meet our financial obligations and to pay our liabilities as they
become due, in their report on our financial statements for the period from
inception (July 7, 2006) to November 30, 2006, our independent auditors included
additional comments indicating concerns about our ability to continue as a going
concern. Our financial statements contain additional note disclosures describing
the circumstances that led to this disclosure by our independent auditors. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
This offering and any investment in our common stock involves a high degree of
risk. Our only source of potential revenue is our marketing and agency agreement
with Avia Mir. If we are unable to generate revenue from the agreement of if the
agreement is terminated, we may not find another source of income. We may not be
able to continue as a going concern if we do not obtain additional financing. We
lack an operating history and have losses which we expect to continue into the
future. There is no assurance our future operations will result in profitable
revenues. If we are unable to generate revenue, we may be obliged to cease
business operations due to lack of funds. We face many challenges to continue
operations, including our lack of operating history, lack of revenues to date,
and the losses we have incurred to date.
Please review the "Risk Factors" on page 7 of this offering.
Our principal business office is located at 601 Union Street, Suite
4200, Seattle, Washington 98101. Our fiscal year end is November 30.
The Offering
Following is a brief summary of this offering:
Securities being offered 3,000,000 shares of common stock minimum
and 25,000,000 shares of common stock
maximum, par value $0.0001
Offering price per share $ 0.015
Offering period The shares are being offered for a
period not to exceed 180 days, unless
extended by our Board of Directors for
an additional 90 days.
Net proceeds to us Approximately $34,460 assuming the
minimum number of shares is sold.
Approximately $364,460 assuming the
maximum number of shares is sold.
Use of proceeds We will use the proceeds to pay for
administrative expenses, the
implementation of our business plan, and
general working capital. (i)
Number of shares outstanding
before the offering 4,000,000
Number of shares outstanding after the offering if all 7,000,000 (if minimum
number of shares are sold) of the shares are sold 29,000,000 (if maximum number
of shares are sold)
8
<page>
(i) If the minimum amount of the shares is sold we will use the proceeds to pay
for our outstanding, as of November 30, 2006, liabilities of $3,460, which
represent amounts paid by our director as follows: $1,000 as per Marketing and
Agency agreement, $1,936 for purchase of computer equipment and $524 for
incorporation costs. In addition we will pay for offering expenses. Total
offering expenses are $10,540. Of the $10,540, the amounts to be paid from the
proceeds for expenses of the offering are: $5,000 for legal fees; $1,000 for
filing fees; $3,500 for accounting fees and expenses; $1,000 for transfer agent
fees; and $40 for registration fee. We will use the rest of the funds (net of
offering expenses and outstanding liabilities) for financing of web portal
development ($12,000), execution of the marketing and advertising plan ($7,000)
and for general working capital ($12,000).
Financial Summary Information
All of the references to currency in this Prospectus are to US Dollars, unless
otherwise noted. The following financial information summarizes the more
complete historical financial information at the end of this Prospectus.
Income Statement Data
From July 7, 2006
(inception)
to February 28, 2007
Revenue $ 0
Expenses $ 20,134
Net Profits (Losses) $ (20,134)
Balance Sheet Data
As of
February 28, 2007
Working Capital (deficit) $ (22,486)
Total Assets $ 10,590
Total Liabilities $ 30,324
As of February 28, 2007, we have a working capital deficit of $22,486 (November
30, 2006 - $7,569) and accumulated losses of $20,134 (November 30, 2006 -
$5,075) since inception.
Risk Factors
Please consider the following risk factors before deciding to invest in our
common stock.
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock.
If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The trading price
of our common stock could decline, and you may lose all or part of your
investment in our common stock.
9
<page>
1. We may not be able to continue as a going concern if we do not obtain
additional financing.
Because of our lack of funds and short operating history incurring only
expenses, our independent accountants' audit report dated January 12, 2007
states that there is substantial doubt about our ability to continue as a going
concern. Our independent auditor pointed out that we incurred only losses since
our inception raising substantial doubt about our ability to continue as a going
concern. Therefore, our ability to continue as a going concern is highly
dependent upon obtaining additional financing for our planned operations. As of
the date hereof, all our cash has been raised from the issuance of securities.
2. We lack an operating history and have losses which we expect to continue into
the future. There is no assurance our future operations will result in
profitable revenues. If we cannot generate sufficient revenues to operate
profitably, our business will fail.
We were incorporated on July 7, 2006 and we have not realized any revenues. We
have very little operating history upon which an evaluation of our future
success or failure can be made. Our net loss since inception on July 7, 2006 to
February 28, 2007 is $20,134.
We currently do not have any operations and we have no income. Based upon
current plans, we expect to incur operating losses in future periods because we
will be incurring expenses and not generating revenues. We cannot guarantee that
we will be successful in generating revenues in the future. Failure to generate
revenues will cause us to go out of business.
3. We expect to incur losses in future periods. We are dependent upon the funds
to be raised in this offering to advance our business, the proceeds of which
may be insufficient to achieve adequate revenues to remain in business and our
business will fail.
We have limited operations. We need the proceeds from this offering to pay for
marketing and continued development of our website. We may need additional funds
to complete further development of our business plan to achieve a sustainable
sales level where ongoing operations can be funded out of revenues. There is no
assurance that any additional financing will be available, or if available, on
terms that will be acceptable to us. If we are not able to obtain needed
financing, we may have to cease operations and investors will lose all of their
investment.
4. Foreign currency exchange rate fluctuations may adversely affect our
business.
Since we intend to market and sell our products in many different countries,
changes in exchange rates can adversely affect our cash flows and results of
operations. Furthermore, reported sales and purchases made in non-U.S.
currencies, when translated into U.S. dollars for financial reporting purposes,
fluctuate due to exchange rate movement. Due to the number of currencies
involved, the variability of currency exposures and the potential volatility of
currency exchange rates, we cannot predict the effect of exchange rate
fluctuations on future sales and operating results.
5. Our only source of potential revenue is our marketing and agency agreement
with Avia Mir. If we are unable to generate revenue from the agreement of if the
agreement is terminated, we may not find another source of income and our
business will fail.
We have no revenues, have incurred losses since our inception on July 7, 2006,
and have relied upon the sale of our securities in unregistered private
placement transactions and cash advances from our sole director, Ms. Janetta
Voitenkova, to fund our operations. To date, we have not generated any revenue
from our Marketing and Agency Agreement with Avia Mir and may not ever generate
revenue as per this agreement.
There is no guarantee that we will be able to renew this agreement after this
term has been completed upon acceptable terms. As well, the agreement provides
that Avia Mir may terminate it if we fail to
10
<page>
perform the material provision of incurring minimum marketing expenses of
$50,000 over the initial two year term of the agreement. If the marketing and
agency agreement is terminated, we will not have any business operations and our
business may fail, causing investors to lose all of their investments.
6. Our plan to develop relationships with strategic partners and vendors may not
be successful.
As part of our business strategy, we will need to develop short- and long-term
relationships with tour operators in travel industry in order to enter into
marketing agreements for our services. We must enter into agreements with them
on attractive terms and integrate and coordinate their resources and
capabilities with our own. Due to our lack of operating history, this will be
difficult to do. If we are unsuccessful in our efforts, our ability to generate
revenue and market products could be severely limited.
7. Our future success is dependent on our existing management team, and hiring
and assimilating new key employees, and our inability to attract or retain key
personnel in the future would materially harm our business and results of
operations.
We depend on the services of our sole director, Janetta Voitenkova, for the
future success of our business. The loss of the services of Ms. Voitenkova could
have an adverse effect on our business, financial condition and results of
operations. We do not carry any key personnel life insurance policies on
Ms. Voitenkova and we do not have a contract for her services.
In addition, our future success will depend, in part, on our ability to attract
and retain highly skilled employees, including management, technical and sales
personnel. The loss of services of any of our key personnel, the inability to
attract or retain key personnel in the future, or delays in hiring required
personnel could materially harm our business and results of operations. We may
be unable to identify and attract highly qualified employees in the future. In
addition, we may not be able to successfully assimilate these employees or hire
qualified personnel to replace them.
8. Our operating results may prove unpredictable which could negatively affect
our operating results.
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which are outside of our control. Factors that may
cause our operating results to fluctuate significantly include the following:
o our ability to generate enough working capital from future equity sales;
o the level of acceptance by general public and industry insiders of Avia
Mir products;
o unanticipated fluctuations in price of the Avia Mir products;
o the amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations and infrastructure; and
o general economic conditions
If realized, any of these risks could have a material adverse effect on our
business, financial condition and operating results.
9. Because our management does not have prior experience in marketing and brand
development in the travel industry, our business has a higher risk of failure.
Our director does not have experience in distribution and marketing of products.
As a result, we may not be able to recognize and take advantage of opportunities
without the aid of qualified marketing and business development consultants. Our
director's decisions and choices may not be well thought out and our operations,
earnings and ultimate financial success may suffer irreparable harm as a result.
11
<page>
10. Because we are small and do not have much capital, we must limit our efforts
in marketing of our services and products. As a result, opportunities for us to
attract new customers who purchase products from our website and generate profit
will be severely limited. If we do not make a profit, we may have to suspend or
cease operations.
Because we are small and do not have much capital, we must limit our efforts in
marketing of our products. Because we will be limiting our marketing activities,
we may not be able to attract new customers to purchase tour packages from our
website. We may not be able to operate profitably from our agreement with Avia
Mir. If we cannot operate profitably, we may have to suspend or cease
operations.
11. Our revenue is highly dependent on the travel and transportation industries
and a prolonged decrease in travel booking volumes would reduce our revenue. We
expect that most of our revenue will be derived from suppliers in the travel and
transportation industries. Our revenue is highly subject to declines in or
disruptions to travel and transportation due to factors entirely out of our
control. Factors that may adversely affect travel and transportation activity
include:
- - Economic downturns and recessions;
- - Global security issues, political instability, acts of terrorism,
hostilities and war;
- - Increased airport security that could reduce the convenience of air
travel;
- - Inclement weather,
- - Increased occurrence of travel-related accidents;
- - The financial condition of travel sellers.
12. Because there is no public trading market for our common stock, you may
not be able to resell your stock.
There is currently no public trading market for our common stock. Therefore
there is no central place, such as stock exchange or electronic trading system,
to resell your shares. If no market is ever developed for our shares, it will be
difficult for shareholders to sell their stock. In such a case, shareholders may
find that they are unable to achieve benefits from their investment.
13. Because the SEC imposes additional sales practice requirements on brokers
who deal in our shares which are penny stocks, some brokers may be unwilling to
trade them. This means that you may have difficulty reselling your shares and
this may cause the price of the shares to decline. The shares offered by this
prospectus constitute penny stock under the Exchange Act. The shares will
remain penny stock for the foreseeable future. "Penny stock" rules impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors,
that is, generally those with assets in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with a spouse. For transactions covered
by these rules, the broker-dealer must make a special suitability determination
for the purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The broker-dealer also must
disclose the commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally, monthly
statements must be sent disclosing recent price information on the limited
market in penny stocks.
12
<page>
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell our shares of common stock. The market price of our shares would likely
suffer as a result.
There is no established market for the common stock being registered. We intend
to apply to the OTC Bulletin Board for the trading of our common stock. This
process takes at least three months and the application must be made on our
behalf by a market maker, but we have not yet engaged a market maker to make the
application on our behalf. If our common stock becomes quoted and a market for
the stock develops, the actual price of the shares will be determined by
prevailing market prices at the time of sale. Trading of securities on the OTC
Bulletin Board is often sporadic and investors may have difficulty buying and
selling or obtaining market quotations, which may have a depressive effect on
the market price for our common stock. Accordingly, you may have difficulty
reselling any shares your purchase from Grand Motion, Inc.
14. We do not intend to pay dividends and there will be less ways in which you
can make a gain on any investment in Grand Motion.
We have never paid any cash dividends and currently do not intend to pay any
dividends for the foreseeable future. To the extent that we require additional
funding currently not provided for in our financing plan, our funding sources
may likely prohibit the payment of a dividend. Because we do not intend to
declare dividends, any gain on an investment in Grand Motion will need to come
through appreciation of the stock's price.
15. Because our sole director will own 57.1 % of our outstanding common stock,
if the minimum amount of the offering will be sold, she could make and control
corporate decisions that may be disadvantageous to other minority shareholders.
Our sole director, Janetta Voitenkova, owns 100% of the outstanding shares of
our common stock as of the date of this offering. If minimum amount of the
shares will be sold, our director will own 57.1% of our outstanding common
stock. Accordingly, she will have a significant influence in determining the
outcome of all corporate transactions or other matters, including mergers,
consolidations, and the sale of all or substantially all of our assets. She will
also have the power to prevent or cause a change in control. The interests of
our director may differ from the interests of the other stockholders and thus
result in corporate decisions that are disadvantageous to other shareholders.
Use of Proceeds
Our offering is being made on a self underwritten basis - with a minimum of
$45,000 in gross proceeds. The table below sets forth the use of proceeds if
$45,000 (i.e. gross proceeds of the minimum offering) or $375,000 (i.e. gross
proceeds of the maximum offering) of our common stock is sold.
<table>
<caption>
$45,000 $375,000
------------------- --------------------
<s> <c> <c>
Gross proceeds $ 45,000 $ 375,000
Offering expenses 10,540 10,540
------------------- --------------------
Net proceeds $ 34,460 $ 364,460
=================== ====================
</table>
The net proceeds will be used as follows:
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<page>
<table>
<caption>
<s> <c> <c>
Outstanding liabilities $ 3,460 $ 20,758
Website development 12,000 12,000
Marketing and advertising 7,000 165,000
Employees - 114,000
General and Administrative 12,000 52,702
------------------- --------------------
TOTAL $ 34,460 $ 364,460
=================== ====================
</table>
Total offering expenses are $10,540. Of the $10,540, the amounts to be paid from
the proceeds for expenses of the offering are: $5,000 for legal fees; $1,000 for
filing fees; $3,500 for accounting fees and expenses; $1,000 for transfer agent
fees; and $40 for registration fee.
If the minimum amount of the shares is sold we will use the proceeds to pay for
our outstanding, as of November 30, 2006, liabilities of $3,460, which represent
amounts paid by our director as follows: $1,000 as per Marketing and Agency
agreement, $1,936 for purchase of computer equipment and $524 for incorporation
costs.
If the maximum amount of the shares is sold we will pay all of our outstanding
liabilities as of November 30, 2006, representing the amounts owed to our
director for expenses incurred on behalf of the company in the amount of $3,675,
and loan with $17,000 in principal and $83 in accrued interest. The loan is
payable on demand, unsecured, and bears interest at 6.0% per annum.
Our sole director has provided funds for general working capital to the date of
this prospectus. We may rely on loans from our sole executive officer and
director, Janetta Voitenkova to continue our operations; however, there are no
assurances that Ms. Voitenkova will provide us with any additional funds.
Currently, we do not have any arrangements for additional financing. If we are
not able to obtain needed financing, we may have to cease operations.
As of February 28, 2007, we had paid $1,000 for distributor rights and incurred
$8,500 in website development costs in accordance with marketing and agency
agreement. We intend to spend between $7,000 and $165,000 for further marketing
of Avia Mir's and other tour operators' products.
"General and Administrative Costs" include costs related to operating our
office. These costs include rent, telephone service, mail, stationery,
accounting, acquisition of office equipment and supplies, costs of paying an
administrative assistant, expenses of filing reports with the Securities and
Exchange Commission, travel, and general working capital.
Determination of Offering Price
The price of the shares we are offering was arbitrarily determined in order for
us to raise up to a total of $375,000 in this offering. The offering price bears
no relationship whatsoever to our assets, earnings, book value or other criteria
of value. Among the factors considered were:
o our lack of operating history
o the proceeds to be raised by the offering
o the amount of capital to be contributed by purchasers in this offering
in proportion to the amount of stock to be retained by our existing
shareholder, and
o our cash requirements
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Dilution of the Price per Share
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets.
As of November 30, 2006, the net tangible book value of our shares of common
stock was a deficit of $(4,675) or approximately $(0.0012) per share based upon
4,000,000 shares outstanding.
If 100% of the shares are sold:
Upon completion of this offering, in the event all of the shares are sold, the
net tangible book value of the 29,000,000 shares to be outstanding will be
$370,325, or approximately $0.0128 per share. The amount of dilution to the
shareholders acquiring shares in this offering will be $0.0022 per share. The
net tangible book value of the shares held by our existing shareholder will be
increased by $0.014 per share without any additional investment on their part.
The shareholders acquiring shares in this offering will incur an immediate
dilution from $0.015 per share to $0.0128 per share.
After completion of this offering, if 25,000,000 shares are sold, the
shareholders acquiring shares in this offering will own approximately 86.21% of
the total number of shares then outstanding shares for which the shareholders
will have made a cash investment of $375,000, or $0.015 per share. Our existing
shareholders will own approximately 13.79% of the total number of shares then
outstanding, for which they have made contributions of cash, of $400, or $0.0001
per share.
If the minimum number of the shares is sold:
Upon completion of this offering, in the event 12% or the minimum amount of the
shares are sold, the net tangible book value of the 7,000,000 shares to be
outstanding will be $ 40,325 or approximately $ 0.0057 per share. The amount of
dilution to the shareholders acquiring shares in this offering will be $ 0.0093
per share. The net tangible book value of the shares held by our existing
stockholders will be increased by $ 0.0047 per share without any additional
investment on their part. The shareholders acquiring shares in this offering
will incur an immediate dilution from $0.015 per share to $ 0.0057 per share.
After completion of this offering, if 3,000,000 shares are sold, the
shareholders acquiring shares in this offering will own approximately 42.85% of
the total number of shares then outstanding shares for which the shareholders
will have made a cash investment of $45,000, or $0.015 per share. Our existing
stockholders will own approximately 57.15% of the total number of shares then
outstanding, for which they have made contributions of cash, totaling $400,
or $0.0001 per share.
The following table compares the differences of investment in our shares to the
shareholders acquiring shares in this offering with investment in our shares of
our existing stockholders.
Existing stockholders if all of the shares are sold:
Price per share $ 0.0001
Net tangible book value per share before offering $ (0.0012)
Net tangible book value per share after offering $ 0.0128
Increase to present stockholders in net tangible
book value per share after offering $ 0.014
Capital contributions $ 400
Number of shares outstanding before the offering 4,000,000
Number of shares after offering held by existing
stockholders 4,000,000
Percentage of ownership after offering 13.79%
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Purchasers of shares in this offering if all shares sold
Price per share $ 0.015
Dilution per share $ 0.0022
Capital contributions $ 375,000
Number of shares after offering held by public investors 25,000,000
Percentage of ownership after offering 86.21%
Purchasers of shares in this offering if the minimum number of shares sold
Price per share $ 0.015
Dilution per share $ 0.0093
Capital contributions $ 45,000
Number of shares after offering held by public investors 3,000,000
Percentage of ownership after offering 42.85%
Plan of Distribution; Terms of the Offering
We are offering a minimum of 3,000,000 and up to a maximum of
25,000,000 shares of common stock on a direct public offering basis, without any
involvement of underwriters or broker-dealers. The offering price is $0.015 per
share. Funds from this offering will be placed in a separate bank account. We
will hold the funds in the account until we receive a minimum of $45,000, at
which time we will appropriate the funds for the purposes we have described
above. Any funds received by us thereafter will be immediately available for our
use. If we do not receive the minimum amount of $45,000 within 180 days of the
effective date of our Prospectus, or within an additional 90 days if we so
choose, all funds will be promptly returned to the shareholders acquiring shares
in this offering without a deduction of any kind. During the 180 day period and
possible additional 90 day period, no funds will be returned to the shareholders
acquiring shares in this offering. The shareholders acquiring shares in this
offering will only receive a refund of their subscription if we do not raise a
minimum of $45,000 within the 180 day period referred to above, which could be
expanded by an additional 90 days at our discretion for a total of 270 days.
There are no finders involved in our distribution.
We will sell the shares in this offering through our sole director Ms.
Voitenkova. She will receive no commission from the sale of any shares. She will
not register as a broker-dealer under Section 15 of the Exchange Act in reliance
upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person
associated with an issuer may participate in the offering of the issuer's
securities and not be deemed to be a broker-dealer. The conditions are that:
1. The person is not statutorily disqualified, as that term is defined in
Section 3(a)(39) of the Act, at the time of his participation; and,
2. The person is not compensated in connection with her participation by the
payment of commissions or other remuneration based either directly or indirectly
on transactions in securities;
3. The person is not at the time of their participation, an associated
person of a broker-dealer; and,
4. The person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the
Securities Exchange Act 1934, as amended (the "Exchange Act"), in that she (A)
primarily performs, or is intended primarily to perform at the end of the
offering, substantial duties for or on behalf of the issuer otherwise than in
connection with transactions in securities; and (B) is not a broker or dealer,
or an associated person of a broker or dealer, within the preceding twelve (12)
months; and (C) does not participate in selling and offering of securities for
any issuer more than once every twelve (12) months other than in reliance on
Paragraphs (a)(4)(i) or (a)(4)(iii).
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Our sole director and officer is not statutorily disqualified, is not being
compensated, and is not associated with a broker-dealer. She is and will
continue to be our officer and director at the end of the offering and has not
been during the last twelve months and is currently not broker-dealers or
associated with a broker-dealer. She has not during the last twelve months and
will not in the next twelve months offer or sell securities for another
corporation.
Only after our Prospectus is declared effective by the Securities and Exchange
Commission (the "Commission"), we intend to distribute this Prospectus to
potential investors at meetings and to our friends, business associates and
relatives who are interested in us and a possible investment in the offering. We
will not utilize the Internet to advertise our offering.
Section 15(g) of the
Exchange Act Our shares are covered by Section 15(g) of the Exchange Act, and
Rules 15g-1 through 15g-6 promulgated thereunder. They impose additional sales
practice requirements on broker-dealers who sell our securities to persons other
than established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $160,000 or $300,000 jointly with their
spouses).
Rule 15g-1 exempts a number of specific transactions from the scope of the penny
stock rules.
Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless
the broker-dealer has first provided to the customer a standardized disclosure
document.
Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny
stock transaction unless the broker-dealer first discloses and subsequently
confirms to the customer current quotation prices or similar market
information concerning the penny stock in question.
Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for
a customer unless the broker-dealer first discloses to the customer the amount
of compensation or other remuneration received as a result of the penny stock
transaction. Rule 15g-5 requires that a broker-dealer executing a penny stock
transaction, other than one exempt under Rule 15g-1, disclose to its customer,
at the time of or prior to the transaction, information about the sales persons
compensation. Rule 15g-6 requires broker-dealers selling penny stocks to provide
their customers with monthly account statements. Rule 15g-9 requires
broker-dealers to approved the transaction for the customer's account; obtain a
written agreement from the customer setting forth the identity and quantity of
the stock being purchased; obtain from the customer information regarding his
investment experience; make a determination that the investment is suitable for
the investor; deliver to the customer a written statement for the basis for the
suitability determination; notify the customer of his rights and remedies in
cases of fraud in penny stock transactions; and, the NASD's toll free telephone
number and the central number of the North American Administrators Association,
for information on the disciplinary history of broker-dealers and their
associated persons.
The application of the penny stock rules may affect your ability to resell your
shares.
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Offering Period and Expiration Date
This offering will start on the date of this prospectus and continue for a
period of up to 180 days, and an additional 90 days, if so elected by our Board
of Directors.
Procedures for Subscribing
If you decide to subscribe for any shares in this offering, you must
1. execute and deliver a subscription agreement; and
2. deliver a check or certified funds to us for acceptance or rejection.
All checks for subscriptions must be made payable to Grand Motion, Inc.
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for any
reason or for no reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Description of Business
General
We were incorporated in the State of Nevada on July 7, 2006. We have commenced
operations by entering into an exclusive marketing and agency agreement with
Avia Mir. Avia Mir (http://www.avia-mir.ru) is a private company, based in
Moscow, Russia, that sells specialty tours, vacation packages, airline tickets
and charter flights to customers in Russia and former CIS countries. We are a
start-up stage corporation with limited operations and no revenues from our
business operations. For the period ended November 30, 2006, and February 28,
2007, we generated no revenue. Our business office is located at 601 Union
Street, Suite 4200, Seattle, Washington 98101. Our telephone number is
(206)652-3283.
We have begun very limited operations and will advance our operations until we
complete this offering. We have executed one Distributor and Marketing Agreement
with OOOAvia Mir ("Avia Mir"), a Travel Agency and Tour Operator based in
Moscow, Russia. As part of our operations to date, we have begun the development
of our website, which will market the Avia Mir tours. We will continue the
development of the website until we complete this offering. Our plan of
operation is forward looking and there is no assurance that we will ever be
successful in our plan of operations.
Spa Travel Industry Overview
Health and wellness tourism is broken down into two main sectors: traveling for
medical treatments that are cheaper or better than can be obtained in the home
country and traveling for a holiday that includes health and wellness treatments
or pampering.
Health and wellness tourism consumers can now combine a visit to a new
destination with health and wellness therapies and treatments. A typical health
and wellness tourist regime encompasses a destination day spa as part of a
short-break, offering treatments relating to body, mind and spirit.
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Visitors check in for a one-day or multi-day program of options ranging from
education, fitness and healthy meals to beauty and physiotherapy sessions in a
spa environment. One such resort is the Danubius Thermal Hotel Margitszigit in
Hungary that offers spa cuisine with dietary programs alongside.
Other Eastern European locations such as Bled in Slovenia offer beautiful
surroundings and health spas for a complete relaxing experience. Piestany Spa in
Slovakia is a famous Eastern European spa that offers high quality medical and
leisure services at prices even lower than the Czech Republic.
Our Services
We plan to market specialty tours, spa packages and wellness-oriented vacations
in Europe and Asia to the United States market. We plan to work primarily with
travel agencies, tour operators and travel industry wholesalers located in
Europe and Asia by offering marketing and distribution of their products in the
United States of America. We will enter into exclusive distribution and
marketing agreements to promote their products for a commission of sales
generated as a result of Grand Motion efforts.
Our business plan focuses on two main products to market:
1) Spa destinations targeted to U.S. Travelers:
There are three main categories of products we want to market to U.S.
customers
- Luxurious and high end spa destinations in countries such as France,
Germany, Italy and Switzerland. The European spas offer not only spa
treatments as generally known to North American customers, they have
technologically sophisticated spa centers, offering professional
medical assistance, diagnostics and a complete selection of therapies:
thermal, hydro, fitness, relaxation as well as special medically
assisted diet programs. Many modern European spas have natural spring
thermal pools and offer many other fitness and relaxation activities.
Examples of these include spas such as Fonteverde Thermal Springs and
Resort in France, the Lausanne Palace & Spa in Switzerland, Mezzatorre
Resort & Spa in Italy, and Schlosshotel Buhlerhohe in Germany.
- Reasonably priced spa destinations for budget minded travelers in
Eastern European countries such as Czech Republic, Slovenia, Hungary,
Bulgaria, Poland, Lithuania and Russia.
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We intent to promote well-known Eastern European spas that have an
excellent reputation for their health and rehabilitation programs to
North American travelers.
- North American spas and resorts for travelers who do not want to leave
the continent. Despite the fact that there is a wide selection of
resorts and spas in North America, many of them are not widely known.
It may be difficult for people to do enough research to locate spas and
resorts that are targeted to the customer's specific needs, such as
special medical and fitness treatments, specifically designed diet
programs or just stress relief and relaxation treatments.
2) North American spas, wellness vacations and outdoor adventure holidays
targeted to Eastern European customers.
- - There are many spas and resorts in North America that are virtually
unknown to Eastern European travelers. Many North American wellness
destinations have not been promoted aggressively to Eastern Europeans
due to language barriers and economical reasons. We intend to promote
and market North American Spas and Outdoor Adventure holidays to
Russian and other Eastern European travelers.
Our services to these companies will consist of consultation on brand strategy,
marketing services, sales and distribution of their products. We plan to create
and distribute a specially designed catalogue of Spa and Wellness destinations
for fall/winter season and spring/summer season. We want to categorize wellness
vacations by destinations and by topics of treatments and services.
We intent to built a web portal and we registered the domain name for that
purpose: www.grandmotion.com
The web portal will list all the destinations and packages we will market,
descriptions of spas, services and treatments provided at each destination, as
well as customer reviews and suggestions from experts and tourists who have
visited the destinations. When a visitor makes the decision to purchase a
vacation package or reserve a room in a featured resort or spa, they will be
redirected to our partner's website where they will complete the booking
process.
On November 20, 2006 we entered into a Marketing and Agency Agreement
("Agreement") with Avia Mir to market and distribute Avia Mir's products, which
include specialty spa tours and wellness-oriented vacation packages. In
accordance with the Agreement, Grand Motion has agreed to provide Avia Mir with
a comprehensive marketing plan for the next two years and to execute the
marketing plan through various activities, including but not limited to:
development of the Grand Motion web portal, public relations, market research,
search engine optimization, search engine marketing, viral marketing, trade show
exhibits, Internet analytics, print advertising, one to one marketing and direct
mail campaigns.
Grand Motion will market Avia Mir products to general public and industry
insiders in the United States. In addition Grand Motion will assist Avia Mir in
initiating and finalizing the sale of their products to U.S. consumers. In
consideration for its services, Avia Mir will pay Grand Motion an amount equal
to 5% of the gross sales of Avia Mir products generated through Grand Motion
efforts on a quarterly basis.
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Some of the tours and spa destinations currently offered by Avia Mir
Czech Republic.
Seven, twelve and twenty four day packages are available in spas of Karlovy Vary
(Carlsbad) in the Czech Republic.
Bristol Palace Spa Hotel
- ------------------------
Visitors live in the Bristol Palace spa hotel, in Karlovy Vary, with annexes in
the Orava, Sokol, and Livia hotels, each with its own treatment facility.
Spa Bohemia Lazne
- -----------------
Spa Bohemia Lazne is a medical/holistic facility in Karlovy Vary. Some of the
procedures visitors can enjoy include: mineral and carbon baths, exercise in
thermal pools with mineral water, sauna, parafango (mud) packs, underwater and
classical massage, electrotherapy (diathermy, diadynamics, ultrasonic), herbal
inhalation, laser treatments, ionic mineral bath, dry carbonic application,
oxygen therapy and acupuncture. The spa also offers programs for patients with
menopausal and fertility problems. The cuisine at Bohemia Lazne is outstanding.
The combination of Czech and German cuisine creates unforgettable dishes with
rich flavor. Dietary dishes are also available for those who have diabetes and
other metabolic disorders.
The Grand Hotel Varna and the Hotel Ambassador
- ----------------------------------------------
The Grand Hotel Varna and the Hotel Ambassador both offer a complete
Balneological center with a wide range of curative treatments, plus indoor and
outdoor swimming pools, gym and various sports facilities.
Hungary
Danubius Health Spa
- -------------------
Spa stays at the Danubius Health Spa, where travelers can benefit from the
curative effects of natural thermal springs. They combine thermal water
treatments with physiotherapy, hydrotherapy, electrotherapy, relaxation and
medical massage to achieve excellent results. Visitors to the spa will have
their own personal physician to assess their medical needs, prescribe the most
effective course of treatments, and follow their progress during the stay.
Grand Hotel and the Thermal Hotel Margitsziget
- ----------------------------------------------
The ancient Grand Hotel offers full therapy services under supervision of
medical staff. The Thermal Hotel Margitsziget connects to the Grand Hotel via an
underground tunnel. The visitor can get treatments at either hotel under the
direction of spa physicians and a customized therapy plan.
Slovakia
The Spa Hotel Balnea Esplanade
- ------------------------------
The Spa Hotel Balnea Esplanade is located in a quiet park, in the middle part of
Spa Island, approximately 1 km from the center of the Piestany town. The hotel
is connected to a medical centre and
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has an indoor and outdoor swimming pool with thermal water. There are a wide
range of facilities, several restaurants, a cafe as well as all kinds of
treatments. The hotel is available only for treatment visits.
Greece
Blue Palace Resort & Spa ,Elounda Spa & Thalassotherapy tours
- -------------------------------------------------------------
The Elounda Spa & Thalassotherapy extends over 22,000 square feet and over three
levels. Facilities include one indoor heated pool, two fully equipped
thalassotherapy pools, two gym areas, relaxation area, hammams (steam baths),
saunas, indoor and outdoor Jacuzzis, 6 rooms for dry massages, 11 rooms for wet
thalasso treatments and a fitness center.
France
Spa vacations on the fabulous French Riviera. The modern Hotel Thalazur Antibes
is situated right in the heart of this world famous vacation paradise, minutes
from beaches, museums. Thalazur Antibes offers comfortable rooms with private
balconies or terraces, gourmet meals (spa cuisine available), a modern fitness
facility, and a French approach to health and beauty. The French have believed
for centuries that minerals in the Mediterranean waters are beneficial to
health.
Italy
Located in Anacapri, the most exclusive and unspoiled part of Italy's island of
Capri, the Capri Palace stands 300 meters above sea level, overlooking the open
Mediterranean Sea and the Gulf of Naples. The Capri Palace has 80 rooms, four
with their own private gardens and heated swimming pools; five luxuriously
furnished suites among which one finds the penthouse "Acropolis" bathed in
sunlight, boasting a marvelous Jacuzzi tub from where one can gaze at the stars
and across the sea
Switzerland
Built In 1864 The Victoria-Jungfrau Grand Hotel And Spa Embodies The Ultimate In
First-class Amenities. The Hotel Is The Leading Luxury Hotel In Interlaken-a
Summer And Winter Resort Internationally Acclaimed As One Of The Most Attractive
In Switzerland.
Latvia, Estonia, , Lithuania
Spa Weekend in Riga, Latvia
- ---------------------------
The perfect way to relax and be looked after, with a range of treatments
available as well as fantastic food, nightlife and shopping.
Viimsa Spa Package
- ------------------
A 4-day Detox Package at the SPA Hotel, Viimsi, Estonia. The detox package
improves body cleansing and relaxation. Complex body cleansing program created
by specialists of VIIMSA SPA, enhances your well-being and provides guidance for
a healthy lifestyle.
Druskininkai Resort
- -------------------
Family Weekend in Druskininkai, Lithuania. Druskininkai is a famous resort in
Lithuania, located
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126km from Vilnius and 130km from Kaunas. The resort features Turkish baths,
mineral water swimming pool, and a variety of spa treatments.
Russia
A wide variety of spa vacations are offered, including spa packages on the coast
of the Black Sea, spa clinics in Moscow, resorts on Lake Baikal, Siberian Taiga
spa cottages, which offer traditional Russian spa treatments, as well as hunting
and fishing in the wilderness.
Competition
We face competition from established as well as other emerging travel
distribution companies, which could divert customers to our competitors and
significantly reduce our revenue and profitability.
General Travel
- --------------
Our business involves providing marketing and promotion of travel products to
travel agents and general public and we face significant competition in all
aspects of this business. With respect to travel agencies, we compete primarily
against large and well-established agencies as well as small independent travel
agencies that offer similar products. With respect to online bookings and
purchasing travel related products we face completion from well established and
well funded online travel sites such as www.expedia.com, www.travelocity.com ,
www.exit.ca, www.orbitz.com, www.priceline.com to name a few.
Spa, wellness and wilderness experience travel
- -----------------------------------------------
There are many companies that offer specialty travel products, such as spa and
wellness tourism and wilderness experience tours online as well as in more
traditional offline format. Some of these companies include: Trafalgar Tours
(http://www.trafalgar.com), Gap Adventures (http://www.gapadventures.com),
Destination Spa Group (http://www.destinationspas.com), Intourist
(http://ecotours-intourist.ru), Exeter International
(http://www.exeterinternational.com), The Nordic Company (http://www.nordicco.
com), Rhapsody Tours (http://www.rhapsodytours.com), and Globus
(http://www.globusjourneys.ca).
We expect existing competitors and new entrants to the travel business to
constantly revise and improve their business models in response to challenges
from competing businesses. If these or other travel industry participants
introduce changes or developments that we cannot meet in a timely or
cost-effective manner, our revenue and profitability could be reduced. In
addition, consolidation within travel industry may give our competitors
increased negotiating leverage with travel sellers and greater marketing
resources, thereby providing corresponding competitive advantages over us.
Marketing
We intend to market our products in the United States according to the strategy
to be agreed upon with Avia Mir. As per the Agreement, we will create a
comprehensive marketing plan for Avia Mir products. After the marketing plan is
finalized, Grand Motion will assume the responsibility for executing the
marketing plan, which will include execution of any and all marketing
activities.
If we raise the maximum amount of the offering, the marketing plan will include:
- launching the web portal to introduce Avia Mir tours to the U.S. market
- marketing our web portal by purchasing online advertising and print
advertising
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- creation of the print catalogue to advertise current tours offered by
Avia Mir
- exhibiting at 4 tradeshows held in the United States and Europe
If we raise the minimum amount of the offering ($34,460 net after anticipated
offering expenses), the marketing plan will be revised and will include:
- launching the web portal to introduce Avia Mir tours to the U.S. market
- marketing the web portal by getting listed in search engines and
creating cost-effective Cost-Per-Click campaigns.
Exhibiting at industry tradeshows
- ---------------------------------
We plan to book exhibit space at the following trade shows:
- Luxury Travel Expo-USA to be held in Mandalay Bay Resort, Las Vegas,
Nevada, USA on December 4-6, 2007. www.luxurytravelexpowest.com/
- La Cumbre - premier marketplace for travel professionals from the
Americas. It is the only industry event that includes both buyers and
suppliers from throughout the hemisphere. The event will be held at the
Las Vegas Convention Center in Las Vegas, Nevada, USA in September 5-7,
2007.
- Leisure Select Moscow 2007 that will include two parts: Luxury Leisure
Moscow International Trade Fair for Luxury Travel to be held on
September 19 - 22, 2007 and SPA & HEALTH Moscow International
Conference to be held on September 26 - 28, 2007.
- The Moscow International Travel & Tourism Exhibition, (MITT ) to be
held in March 2008. (dates to be confirmed). MITT remains the
undisputed premier industry event in Russia and is one of the five
largest tourist exhibitions worldwide. In 2006, the event hosted more
than 2,500 exhibitors from 111 countries and regions and 98,000
visitors, thus proving once more, that MITT is the only event that
truly reflects the vibrancy and continuous growth of the Russian travel
& tourism industry.
Advertising
- -----------
Direct-to-consumer promotion will involve media purchases in magazines,
television, newspaper and online advertising targeted to consumers with an
interest in wellness travel. Mass-media promotion will include conducting public
relations campaigns, generating press releases, holding or sponsoring events
with the purpose of receiving publicity in the media and creating a press kit.
Grand Motion intends to subcontract some of these services to professionals with
more expertise, such as agencies who specialize in public relations.
Web Portal and Catalogue
- ------------------------
The web portal (www.grandmotion.com) and bi-annual catalogue will be essential
in our strategy to promote European and Asian spa destinations and wellness
vacation packages to the U.S. market. We will focus on promotion of the web
portal through our other marketing activities. The web portal will be a
comprehensive site for travelers interested in wellness vacations in Europe and
Asia. We expect to spend a significant amount of resources on development and
promotion of the web portal. The Grand Motion Catalogue will be a printed
version of the web portal, listing all offerings and contact information of the
tour operators who sell the vacation packages.
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Trademarks and Copyrights
We have not filed for any protection of our trademarks.
Management's Discussion and Analysis or Plan of Operation
We are a start-up stage corporation with limited operations and no revenues from
our business operations. Our auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months. Our revenue will not be
sales but instead be commission earned on the gross sales of the private company
of Avia Mir. We do not anticipate that we will generate significant commission
revenues until we have developed the web portal and catalogue and marketed both
sufficiently to generate sales through those sources, and subsequently
commission for us. Accordingly, we must raise cash from sources other than
operations.
To meet our need for cash we are attempting to raise money from this offering.
If we raise the minimum amount through this offering, we will be able to begin
performing the duties we have agreed to in the Agreement with Avia Mir and
remain in business for twelve months. If we are unable to generate revenues
after the twelve months for any reason, or if we are unable to make a reasonable
profit after twelve months, we may have to cease operations. At the present
time, we have not made any arrangements to raise additional cash, other than
through this offering.
If we need additional cash and cannot raise it we will either have to suspend
operations until we do raise the cash, or cease operations entirely. If we raise
the minimum amount of money from this offering, it will last for twelve months
but with limited funds available to build and grow our business. If we raise the
maximum amount, we believe the money will last for three years and also provide
funds for growth strategy. If we raise less than the maximum amount and we need
more money we will have to revert to obtaining additional money through a second
public offering, a private placement of securities, or loans. Other than as
described in this paragraph, we have no other financing plans.
Plan of Operation
Assuming that we raise the minimum amount in this offering, we believe we can
satisfy our cash requirements during the next 12 months. We do not expect
significant changes in the number of employees. Currently, we do not have any
employees.
Upon completion of our public offering, our specific goal will be to fulfill our
duties as per the Agreement with Avia Mir. We intend to finalize the marketing
plan for Avia Mir products, develop the web portal and begin marketing activity
to attract potential customers to the web portal. We intend to accomplish the
foregoing through the following milestones:
1. Complete our public offering. We believe that we will raise sufficient
capital to continue our operations. We believe this could take up to 270 days
from the date the Commission declares our offering effective. We intend to
concentrate all of our efforts on raising as much capital as we can during this
period. If we have not raised the maximum amount of capital during the first
180 days of this offering, our management may decide to extend this offering by
90 days.
25
<page>
2. If we are successful in raising the maximum amount of this offering ($364,460
net after anticipated offering expenses), we intend to secure new offices and
hire a general administrative assistant. We expect the cost of a new office will
be approximately $800 per month rent, plus $200 per month for utilities such as
telephone, fax and internet. If we do not raise the maximum proceeds, or close
to the maximum, we will continue to use existing office space. If we only raise
the minimum amount, our President will perform most of the administrative tasks
required to operate our business. If we raise the full amount and hire an
administrative assistant, we expect it will cost us approximately $2,000 per
month.
3. If we raise the minimum amount of this offering ($34,460 net after
anticipated offering expenses), we will focus on development of the web portal
(www.grandmotion.com) to introduce Avia Mir tours to the U.S. market. The web
portal will also integrate with Avia Mir reservation system to direct consumers
interested in booking a tour or a room in a spa or resort to complete the
transaction on the Avia Mir website. We will assist Avia Mir with editing their
website for the U.S. consumer. For this purpose, we will hire a web design
studio in the U.S. with experience in website for the travel industry. Launch of
the web portal will allow us to earn revenue from commission on sales generated
through the web portal. We estimate the cost of the web portal for the initial
launch to be approximately $12,000.
We believe we will begin generating revenues within nine months of completing
our offering.
4. We believe it will cost a minimum of $7,000 for execution of our marketing
plan for the web portal over the next 12 months in addition to the cost of the
initial launch of $12,000. If we raise the maximum amount of proceeds from the
offering, we will devote an additional $70,000 to the marketing of the Grand
Motion web portal. To achieve this, we will hire a marketing specialist who will
work full-time on purchasing online advertising and print advertising to promote
the web portal. We expect the hire will cost us approximately $2,500 per month.
Marketing is an ongoing matter which will continue during the life of our
operations.
5. If we raise the maximum amount of this offering, we will proceed with
creation of the Grand Motion print catalogue to advertise current products
of Avia Mir. We will hire a graphic design agency to create the print catalogue,
as well as other independent contractors such as copywriters, editors and
photographers, if needed. We expect the costs of the first print run of the
catalogue to be approximately $30,000.
6. We plan to exhibit at 4 tradeshows held in the United States and Europe over
the next twelve months. Our ability to participate in the tradeshows will depend
on the funds raised from this offering. If we raise the minimum amount of
$34,460, we will be unable to exhibit at any tradeshow until we earn revenue or
raise additional capital. If we raise the maximum amount of $364,460, we will
reserve exhibit space, and hire an exhibit house to assist us with creating a
booth, promotional materials and management of the exhibits. We anticipate the
cost of participating in 4 tradeshows to be approximately $40,000.
7. If we raise the maximum amount of this offering, we intend to hire a business
development manager who will assist us in securing marketing and distribution
agreements with tour operators and travel agencies who offer vacation packages
focusing on wellness and health. We estimate the annual cost of hiring a
business development manager to be $60,000.
8. If we raise the minimum amount of the offering, we do not anticipate hiring
any employees and will engage people as outside contractors and consultants for
legal, accounting, and audit functions.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us upon which to base
an evaluation of our
26
<page>
performance. We are in a start-up stage operations and have generated no
revenues. We cannot guarantee we will be successful in our business operations.
Our business is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources and possible cost overruns, such
as increases in administration expenditures associated with daily operations and
support and maintenance of the web portal, increases in accounting and audit
fees, increases in legal fees related to filings and regulatory compliance and
increases in Catalogue printing costs and marketing expenditures.
If we raise the minimum amount of the offering, we can satisfy our cash
requirements for the next twelve months, and stay operational. We may encounter
significant cost overruns in expenditures related to our plan of operations for
the next twelve months if we raise the minimum amount of the offering. Our plan
calls for expenses related to our current office space, development of the web
portal, marketing fees for the web portal, and hiring contractors for
accounting, legal and audit functions. If we encounter cost overruns in these
expenses, we will remain operational for the next twelve months by decreasing
the amount of funds spent on development and marketing of the web portal, as it
is an ongoing expense.
In anticipation of possible cost overruns, we will launch the web portal in two
phases - a soft launch which will list all tour packages, but will not be
integrated with the Avia Mir site and the customer wishing to purchase a package
will have to proceed with an offline transaction. After the soft launch, we will
evaluate our expenses to date and allocate appropriate funds for the launch of
an integrated website that will allow the customer to book their tour package
online.
To become profitable and competitive, we have to successfully promote and
increase sales of Avia Mir travel packages and tours. We anticipate relying on
equity sales of our common stock in order to continue to fund our business
operations. Issuances of additional shares will result in dilution to our
existing stockholders. There is no assurance that we will achieve any of
additional sales of our equity securities or arrange for debt or other financing
for to fund our planned business activities. We may also rely on loans from our
sole executive officer and director, Janetta Voitenkova; however, there are no
assurances that Ms. Voitenkova will provide us with any additional funds.
Currently, we do not have any arrangements for additional financing. We have no
assurance that future financing will be available to us on acceptable terms. If
financing is not available on satisfactory terms, we may be unable to continue,
develop or expand our operations. Equity financing could result in additional
dilution to existing shareholders.
Results of Operations
From Inception on July 7, 2006 to February 28, 2007
During the period from our inception to February 28, 2007, we have completed our
business plan and entered into our first marketing and agency agreement with
Avia Mir. We hired consultants in the areas of bookkeeping and accounting. We
also retained an attorney for the preparation of this Registration Statement,
and an auditor to audit our financial statements. Our loss since inception is
$20,134 of which $4,310 for accounting and audit fees, $184 is for depreciation;
$612 for bank charges and interest expense; $1,100 for consulting, $2,000 for
officer compensation; $352 for office and administrative expenses; $664 for
organization costs; $315 for rent, $2,097 for travel expenses and $8,500 for
website development.
We have reserved the domain name www.grandmotion.com for web portal development
and introduction of Avia Mir tours to the U.S. market. The web portal will also
integrate with Avia Mir reservation system to direct consumers interested in
booking a tour or a room in a spa or resort to complete the transaction on the
Avia Mir website.
Since inception, we have sold 4,000,000 shares of common stock to our President
for $400.
Liquidity and Capital Resources
As of February 28, 2007, our total assets were $10,590 (November 30, 2006 -
$16,083) comprising of cash of $7,663 (November 30, 2006 - $13,189), property
and equipment of $1,752 (November 30, 2006 - $1,894), and distributor rights of
$1,000 (November 30, 2006 - $1,000), and our total liabilities were $30,324
(November 30, 2006 - $20,758) for a total working capital deficit of $22,486
(November 30, 2006 - $7,569). During the period ended November 30, 2006, the
President of the Company provided a $17,000 loan to the Company in accordance
with loan agreement. The loan is payable on demand, unsecured, and bears
interest at 6.0% per annum.
As at February 28, 2007, Janetta Voitenkova, our President, is owed $21,010
(November 30, 2006 -
27
<page>
$20,758) for cash advances and expenditures incurred on behalf of the company.
This amount consists of the $17,000 loan principal, $335 of accrued interest and
$3,675 for expenses incurred on behalf of the Company. We expect to incur
substantial losses over the next two years.
As of February 28, 2007, we had cash of $7,663 (November 30, 2006 - $13,189),
and we believe that we need approximately an additional $45,000 to meet our
capital requirements over the next 12 months. Our intention is to obtain this
money through this offering.
Known Material Trends and Uncertainties
As of November 30, 2006, and April 27, 2007, Grand Motion has no off balance
sheet transactions that have or are reasonably likely to have a current or
future effect on our financial condition, changes in our financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources.
We believe that the above discussion contains a number of forward-looking
statements. Our actual results and our actual plan of operations may differ
materially from what is stated above. Factors which may cause our actual results
or our actual plan of operations to vary include, among other things, decision
of the Board of Directors not to pursue a specific course of action based on a
re-assessment of the facts or new facts, or changes in general economic
conditions.
Legal Proceedings
No officer, director, or persons nominated for these positions, and no promoter
or significant employee of our corporation has been involved in legal
proceedings that would be material to an evaluation of our management.
We are not aware of any pending or threatened legal proceedings which involve
Grand Motion, Inc.
Directors and Officers
Our Bylaws provide that we shall have a minimum of one director. There is no
stated maximum number of directors allowed but such number may be fixed from
time to time by action of the stockholders or of the directors.
- --------------------------------------------------------------------------------
Name Age Position
- --------------------------------------------------------------------------------
Janetta Voitenkova 59 President, Chief Executive
Officer, Chief Financial
Officer, Director
The directors will serve as directors until our next annual shareholder meeting
or until a successor is elected who accepts the position. Directors are elected
for one-year terms. Officers hold their positions at the will of the Board of
Directors, absent any employment agreement. There are no arrangements,
agreements or understandings between non-management shareholders and management
under which non-management shareholders may directly or indirectly participate
in or influence the management of Grand Motion's affairs.
28
<page>
Janetta Voitenkova, Director
Janetta Voitenkova graduated from Kiev Travel and Tourism College and started
her career working as a translator and tour guide in 1974. She owned a travel
agency, Vimextour, in Kiev, Ukraine and operated it until 1995. Vimextour
specialized in offering spa and wellness vacations in Eastern Europe.
Presently Janetta Voitenkova works as an authorized agent for Startec Global
Communications, a telecommunications and Internet services provider. As the
authorized agent, Ms. Voitenkova receives commission from sales of
telecommunication and Internet services to individual clients and private
companies. She also creates and organizes specialty sightseeing tours on a
contractual basis for other travel agencies in Seattle (USA) and Victoria and
Whistler (Canada).
Ms. Voitenkova intends to devote approximately 40% of her business time to our
affairs.
COMPENSATION
There are no formal written employment arrangements in place. We do not have any
agreements or understandings that would change the terms of compensation during
the course of the year.
The table below shows what we have paid to our directors since our inception of
July 7, 2006 through November 30, 2006, and for the three months
SUMMARY COMPENSATION TABLE
<table>
<caption>
- ----------------------------------------------------------------------------------------------------------------
Long Term Compensation
---------------------------
Annual Compensation Awards Payouts
------------------------------------------------------------------------------------
Other Annual
Compen- Restricted Securities All Other
Name and Year sation ($) Stock Awards Underlying LTIP Compen-
Principal Ended Salary Bonus ($) Options/ Payouts sation
Position ($) ($) SARs (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Janetta 07-07-06 -0- -0- $2,000 (1) -0- -0- -0- -0-
Voitenkova, (inception)
President, to
Chief 11-30-06 -0- -0- -0- -0- -0- -0- -0-
Executive 07-07-07
Officer, Chief
Financial
Officer,
Director
- -----------------------------------------------------------------------------------------------------------------
</table>
(1) The company's president provides management services to the
company as per unwritten arrangement with the company. During the
period ended November 30, 2006, the company paid $2,000 for
management services.
Stock Option Grants
We do not have any stock options outstanding. No stock options or stock
appreciation rights under any stock incentive plans were granted to our sole
director and officer since our inception.
29
<page>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The President of the Company provides management services to the Company. During
the period ended February 28, 2007 management services of $2,000 were charged to
operations.
During the period ended November 30, 2006, the President of the Company provided
a $17,000 loan to the Company. The loan is payable on demand, unsecured, and
bears interest at 6.0% per annum.
As at November 30, 2006, the Company owed $3,675 to the President of the Company
for expenses incurred on behalf of the Company in addition to $17,000 loan and
$83 of accrued interest to date.
As at February 28, 2007 and April 27, 2007, the Company owed to the President of
the Company $21,010 consisting of the $17,000 loan principal, $335 of accrued
interest and $3,675 for expenses incurred on behalf of the Company.
We have not entered into any transactions with our officers, directors, persons
nominated for these positions, beneficial owners of 5% or more of our common
stock, or family members of these persons wherein the amount involved in the
transaction or a series of similar transactions exceeded $60,000.
Audit Committee
The Audit Committee is currently composed of one member, Janetta Voitenkova. Our
Board of Directors has determined that we do not have an audit committee
financial expert serving on its audit committee. The Board of Directors has
determined that the cost of hiring a financial expert to act as a director of
Grand Motion and to be a member of the audit committee outweighs the benefits of
having a financial expert on the committee.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the ownership, as of April 27, 2007 of our common
stock by each of our directors, and by all executive officers and directors as a
group, and by each person known to us who is the beneficial owner of more than
5% of any class of our securities. As of April 27, 2007 there were 4,000,000
common shares issued and outstanding. To the best of our knowledge, all persons
named have sole voting and investment power with respect to the shares, except
as otherwise noted.
<table>
<caption>
- ----------------------------------------------------------------------------------------------------------------------
Amount and
Nature of
Title of Class Name of Beneficial Percent of Percent of Percent of
Beneficial Owner Ownership Class Before Class After Class After
Offering Offering with Offering with
Minimum Number of Maximum Number of
Shares Sold Shares Sold
(1) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
Common Janetta Voitenkova 4,000,000 100 57.15 13.79
President, CEO, CFO,
Secretary, Treasurer and
Director
All Officers and 4,000,000 100 57.15 13.79
Directors as a Group
that consists of one
person
- ----------------------------------------------------------------------------------------------------------------------
</table>
30
<page>
1 Includes shares that could be obtained by the named individual within the
next 60 days.
Changes in Control
There are currently no arrangements which would result in a change in control of
Grand Motion, Inc.
Description of Securities
The authorized capital stock of Grand Motion consists of 100,000,000 common
shares, $0.0001 par value.
Common Stock
Holders of the common stock have no preemptive rights to purchase additional
shares of common stock or other subscription rights. The common stock carries no
conversion rights and is not subject to redemption or to any sinking fund
provisions. All shares of common stock are entitled to share equally in
dividends from sources legally available, therefore, when, as and if declared by
the Board of Directors, and upon liquidation or dissolution of Grand Motion,
whether voluntary or involuntary, to share equally in the assets of Grand Motion
available for distribution to stockholders.
The Board of Directors is authorized to issue additional shares of common stock
not to exceed the amount authorized by Grand Motions' Articles of Incorporation,
on such terms and conditions and for such consideration as the Board may deem
appropriate without further stockholder action.
Voting Rights
Each holder of common stock is entitled to one vote per share on all matters on
which such stockholders are entitled to vote. Since the shares of common stock
do not have cumulative voting rights, the holders of more than fifty percent of
the shares voting for the election of directors can elect all the directors if
they choose to do so and, in such event, the holders of the remaining shares
will not be able to elect any person to the Board of Directors.
Dividend Policy
Holders of Grand Motion's common stock are entitled to dividends if declared by
the Board of Directors out of funds legally available therefore. Grand Motion
does not anticipate the declaration or payment of any dividends in the
foreseeable future. We intend to retain earnings, if any, to finance the
development and expansion of its business. Future dividend policy will be
subject to the discretion of the Board of Directors and will be contingent upon
future earnings, if any, Grand Motion's financial condition, capital
requirements, general business conditions and other factors. Therefore, there
can be no assurance that any dividends of any kind will ever be paid.
Stock Transfer Agent
Upon completion of this offering, we intend to engage an independent stock
transfer agency firm to serve as our registrar and stock transfer agent. Shares
Eligible for Future Sale The 25,000,000 shares of common stock registered in
this offering will be freely tradable without restrictions under the Securities
Act. No shares held by our "affiliates" (officers, directors or 10%
31
<page>
shareholders) are being registered hereunder. Our 4,000,000 issued and
outstanding shares have been held since July 2006 (and are subject to the sale
limitations imposed by Rule 144 (see below). The eventual availability for sale
of substantial amounts of common stock under Rule 144 could adversely affect
prevailing market prices for our securities.
In general, under Rule 144, as currently in effect, any of our affiliates and
any person or persons whose sales are aggregated who has beneficially owned his
or her restricted shares for at least one year, may be entitled to sell in the
open market within any three-month period a number of shares of common stock
that does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock, or (ii) the average weekly trading volume in the common sock
during the four calendar weeks preceding any sale. Sales under Rule 144 are also
affected by limitations on manner of sale, notice requirements, and availability
of current public information about us. Non-affiliates who have held their
restricted shares for two years may be entitled to sell their shares under Rule
144 without regard to any of the above limitations, provided they have not been
affiliates for the three months preceding any sale.
Interest of Named Experts and Counsel
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Batcher Zarcone & Baker, LLP our legal counsel, has provided an opinion on the
validity of our common stock. We retained the counsel solely for the purpose of
providing this opinion and have not received any other legal services from this
firm.
The financial statements included in this prospectus and the registration
statement have been audited by Ronald Chadwick, P.C., Certified Public
Accountant, to the extent and for the periods set forth in their report
appearing elsewhere in this document and in the registration statement filed
with the SEC, and are included in reliance upon such report given upon the
authority of said firm as experts in auditing and accounting.
Reports to Security Holders
Upon effectiveness of this Prospectus, we will be subject to the reporting and
other requirements of the Exchange Act and we intend to furnish our shareholders
annual reports containing financial statements audited by our independent
auditors and to make available quarterly reports containing unaudited financial
statements for each of the first three quarters of each year. The public may
read and copy any materials that we file with the Commission at the Commission's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public
may obtain information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The address of
that site is http://www.sec.gov.
Market for Common Equity and Related Stockholder Matters
32
<page>
Market Information
Our common stock is not traded on any exchange. We plan to eventually seek
quotation on the OTC Bulletin Board, once our Prospectus has been declared
effective by the Commission. We cannot guarantee that we will obtain a
quotation. There is no trading activity in our securities, and there can be no
assurance that a regular trading market for our common stock will ever be
developed.
A market maker sponsoring a company's securities is required to obtain a
quotation of the securities on any of the public trading markets, including the
OTC Bulletin Board. If we are unable to obtain a market maker for our
securities, we will be unable to develop a trading market for our common stock.
We may be unable to locate a market maker that will agree to sponsor our
securities. Even if we do locate a market maker, there is no assurance that our
securities will be able to meet the requirements for a quotation or that the
securities will be accepted for quotation on the OTC Bulletin Board.
We intend to apply for quotation of the securities on the OTC Bulletin Board,
but there can be no assurance that we will be able to obtain this quotation. The
OTC Bulletin Board securities are not quoted and traded on the floor of an
organized national or regional stock exchange. Instead, OTC Bulletin Board
securities transactions are conducted through a telephone and computer network
connecting dealers in stocks. OTC Bulletin Board stocks are traditionally
smaller companies that do not meet the financial and other listing requirements
of a regional or national stock exchange.
Financial Statements
a) Financial Statements as of November 30, 2006 including:
Report of Independent Registered Public Accounting Firm
- - Balance Sheet
- - Statement of Operations
- - Statement of Cash Flows
- - Statement of Stockholders' Deficit
- - Notes to the Financial Statements
b) Interim Financial Statements as of February 28, 2007 including:
- - Balance Sheet
- - Statement of Operations
- - Statement of Cash Flows
- - Statement of Stockholders' Deficit
- - Notes to the Financial Statements
================================================================================
Financial Statements
Grand Motion, Inc.
(A Development Stage Company)
November 30, 2006
Index
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Cash Flows F-4
Statement of Stockholders' Deficit F-5
Notes to the Financial Statements F-6
33
<page>
GRAND MOTION, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
November 30, 2006
34
<page>
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
========================================================
Board of Directors
Grand Motion, Inc.
Seattle, Washington
I have audited the accompanying balance sheet of Grand Motion, Inc. (a
development stage company) as of November 30, 2006 and the related statements of
operations, stockholders' equity and cash flows for the period from July 7, 2006
(inception) through November 30, 2006. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Grand
Motion, Inc. as of November 30, 2006 and the related consolidated statements of
operations, stockholders' equity and cash flows for the period from July 7, 2006
(inception) through November 30, 2006 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aurora, Colorado
Ronald R. Chadwick, P.C.
January 12, 2007
RONALD R. CHADWICK, P.C.
F-1
35
<page>
GRAND MOTION, INC.
(A Development Stage Company)
BALANCE SHEET
November 30, 2006
<table>
<caption>
ASSETS
------
<s> <c>
Current assets
Cash and cash equivalents $ 13,189
--------------
Total current assets 13,189
Property and equipment, net 1,894
Distributor rights 1,000
--------------
Total assets $ 16,083
==============
LIABILITIES & STOCKHOLDERS'EQUITY
---------------------------------
Current liabilities
Due to related parties $ 3,675
Notes payable related parties 17,083
--------------
Total current liabilities 20,758
--------------
Stockholders' Equity
- --------------------
Capital stock $0.0001 par value;
100,000,000 shares authorized;
4,000,000 shares issued and outstanding 400
Deficit accumulated during the development stage ( 5,075)
---------------
Total Stockholders' Equity ( 4,675)
---------------
Total Liabilities and Stockholders' Equity $ 16,083
===============
</table>
F-2
The accompanying notes are an integral part of these financial statements
36
<page>
GRAND MOTION, INC.
(A Development Stage Company)
STATEMENT OF INCOME
July 7, 2006 (Inception) Through November 30, 2006
<table>
<caption>
<s> <c>
Revenue $ -
----------------
Expenses
Depreciation $ 42
Bank charges and interest 244
Officer compensation 2,000
Office and administrative 75
Organization costs 664
Travel 2,050
----------------
Net income (loss) $ ( 5,075)
================
Net income (loss) per share (Basic and fully diluted) $ ( 0.00)
================
Weighted average number of common shares outstanding 1,232,877
================
</table>
F-3
The accompanying notes are an integral part of these financial statements
37
<page>
GRAND MOTION, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
July 7, 2006 (Inception) Through November 30, 2006
<table>
<caption>
<s> <c>
Cash Flows From Operating Activities
Net income (loss) $ ( 5,075)
Adjustments to reconcile net income to net cash provided by (used for)
operating activities:
Depreciation 42
Accounts payable related parties 3,675
--------------
Net cash provided by (used for) operating activities ( 1,358)
--------------
Cash Flows From Investing Activities
Purchase of fixed assets ( 1,936)
Marketing and agency rights ( 1,000)
--------------
Net cash provided by (used for) investing activities ( 2,936)
--------------
Cash Flows From Financing Activities
Note payable related party 17,083
Issuance of common stock 400
--------------
Net cash provided by (used for) financing activities 17,483
--------------
Net Increase (Decrease) In Cash 13,189
Cash At The Beginning Of The Period -
-------------
Cash At The End Of The Period $ 13,189
=============
Supplemental disclosure:
Cash paid for:
Interest $ -
=============
Income Taxes $ -
=============
</table>
F-4
The accompanying notes are an integral part of these financial statements
38
<page>
GRAND MOTION, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<table>
<caption>
Deficit
Accumulated
During the
Common Shares Paid In Development Stockholders'
-------------
Number Par Value Capital Stage Equity
------ --------- ------- ----- ------
<s> <c> <c> <c> <c> <c>
Balances, July 7, 2006 - $ - $ - $ - $ -
Issuance of stock for cash 4,000,000 400 - - 400
Net gain (loss) for the period
ended November 30, 2006 - - - ( 5,075) ( 5,075)
------------ ----------- ----------- ------------ -------------
Balances, November 30, 2006 4,000,000 $ 400 $ - $ ( 5,075) $( 4,675)
============ ============ =========== ============ =============
</table>
F-5
The accompanying notes are an integral part of these financial statements
39
<page>
GRAND MOTION, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
November 30, 2006
Note 1 Nature and Continuance of Operations
------------------------------------
The Company was incorporated in the State of Nevada, United States
of America on July 7, 2006, and its fiscal year end is November
30. The Company has obtained a license to market, distribute or
re-sell specialty tours, airline tickets and charter flights
provided by a private company, in the United States of America and
Canada.
These financial statements have been prepared on a going concern
basis. The Company has a working capital deficiency of $7,569, and
has accumulated deficit of $5,075 since inception. Its ability to
continue as a going concern is dependent upon the ability of the
Company to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they
come due. The outcome of these matters cannot be predicted with
any certainty at this time. These factors raise substantial doubt
that the company will be able to continue as a going concern.
Management plans to continue to provide for its capital needs by
the issuance of common stock and related party advances. These
financial statements do not include any adjustments to the amounts
and classification of assets and liabilities that may be necessary
should the Company be unable to continue as a going concern.
Note 2 Summary of Significant Accounting Policies
------------------------------------------
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States of America. Because a precise determination of many
assets and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful
judgment. Actual results may vary from these estimates.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
Development Stage Company
-------------------------
The Company complies with Financial Accounting Standard Board
Statement ("FAS") No. 7 and The Securities and Exchange Commission
Act Guide 7 for its characterization of the Company as development
stage.
Revenue Recognition
-------------------
We recognize revenue when all of the following criteria have been
met: persuasive evidence for an arrangement exists; delivery has
occurred; the commission is fixed or determinable; and collection
is reasonably assured. The commission representing 5.0% of the
private company's gross sales is recognized as income over the
term of the contract with this private company. The amount of the
commission is determined based on the
F-6
40
<page>
Grand Motion, Inc.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 2006 - Page 3
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
quarterly sales reports of the private company. The private
company recognizes the sale of its product during the reporting
period when the company received the payment and the product was
delivered to the customer's delivery site prior to the period end.
Impairment of Long-lived Assets
Capital assets are reviewed for impairment in accordance with FAS
No. 144, "Accounting for the Impairment or Disposal of Long-lived
Assets", which was adopted effective January 1, 2002. Under FAS
No. 144, these assets are tested for recoverability whenever
events or changes in circumstances indicate that their carrying
amounts may not be recoverable. An impairment charge is recognized
for the amount, if any, which the carrying value of the asset
exceeds the fair value.
Foreign Currency Translation
----------------------------
The financial statements are presented in United States dollars.
In accordance with Statement of Financial Accounting Standards No.
52, "Foreign Currency Translation", since the functional currency
of the Company is U.S. dollars, the foreign currency financial
statements of the Company's subsidiaries are re-measured into U.S.
dollars. Monetary assets and liabilities are re-measured using the
foreign exchange rate that prevailed at the balance sheet date.
Revenue and expenses are translated at weighted average rates of
exchange during the year and stockholders' equity accounts and
furniture and equipment are translated by using historical
exchange rates. Any re-measurement gain or loss incurred is
reported in the income statement.
Net Loss per Share
------------------
Basic loss per share includes no dilution and is computed by
dividing loss available to common stockholders by the weighted
average number of common shares outstanding for the period.
Dilutive losses per share reflect the potential dilution of
securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the
accompanying presentation is only of basic loss per share.
Stock-based Compensation
------------------------
The Company has not adopted a stock option plan and has not
granted any stock options. Accordingly no stock-based compensation
has been recorded to date.
Income Taxes
------------
The Company uses the asset and liability method of accounting for
income taxes in accordance with FAS No. 109 "Accounting for Income
Taxes". Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
temporary differences between the financial statements carrying
amounts of existing assets and liabilities and loss carry forwards
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
F-7
41
<page>
Grand Motion, Inc.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 2006 - Page 3
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments
consisting of cash, accounts payable and accrued liabilities,
agreement payable and due to related party approximate their
carrying value due to the short-term maturity of such instruments.
Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments.
Recent Accounting Pronouncements
-------------------------------
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measures". This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted
accounting principles (GAAP), expands disclosures about fair value
measurements, and applies under other accounting pronouncements
that require or permit fair value measurements. SFAS No. 157 does
not require any new fair value measurements. However, the FASB
anticipates that for some entities, the application of SFAS No.
157 will change current practice. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after
November 15, 2007, which for the Company would be the fiscal year
beginning February 1, 2008. The Company is currently evaluating
the impact of SFAS No. 157 but does not expect that it will have a
material impact on its financial statements.
In September 2006, the FASB issued SFAS No. 158, "Employers'
Accounting for Defined Benefit Pension and Other Postretirement
Plans." This Statement requires an employer to recognize the over
funded or under funded status of a defined benefit post retirement
plan (other than a multiemployer plan) as an asset or liability in
its statement of financial position, and to recognize changes in
that funded status in the year in which the changes occur through
comprehensive income. SFAS No. 158 is effective for fiscal years
ending after December 15, 2006 which for the Company would be
February 1, 2007. The Company does not expect that the
implementation of SFAS No. 158 will have any material impact on
its financial position and results of operations.
In September 2006, the SEC issued Staff Accounting Bulletin
("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year
Financial Statements." SAB No. 108 addresses how the effects of
prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements.
SAB No. 108 requires companies to quantify misstatements using a
balance sheet and income statement approach and to evaluate
whether either approach results in quantifying an error that is
material in light of relevant quantitative and qualitative
factors. SAB No. 108 is effective for periods ending after
November 15, 2006 which for the Company would be February 1, 2007.
The Company is currently evaluating the impact of adopting SAB No.
108 but does not expect that it will have a material effect on its
financial statements.
F-8
42
<page>
Grand Motion, Inc.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 2006 - Page 4
Note 3 Distributor rights
------------------
Pursuant to a Marketing and Agency Agreement (the "Agreement")
dated November 20, 2006, the Company acquired from a private
company rights for distribution or re-sell specialty tours,
airline tickets and charter flights provided by a private company
(the "Products") in the United States of America and Canada for
the following consideration:
-Cash payment of $1,000 (one thousand dollars) upon signing of
this Agreement;
- The Company incurring web sites development expenses up to
$10,000 by February 28, 2007;
- The Company incurring minimum marketing expenses of
$50,000 USD over the initial two year term of this
Agreement
The Company will be paid commission on a quarterly basis at the
rate of 5.0% of gross sales resulting from the sale of the
Products by the private company.
As at November 30, 2006, the Company paid $1,000 upon signing the
Agreement.
Note 4 Capital Stock
-------------
The total number of common shares authorized that may be issued by
the Company is 100,000,000 shares with a par value of one hundred
of one cent ($0.0001) per share and no other class of shares is
authorized.
During the period from July 7, 2006 (inception) to November 30,
2006, the Company issued 4,000,000 shares of common stock to its
director for total proceeds of $400.
To November 30, 2006, the Company has not granted any stock
options and has not recorded any stock-based compensation.
Note 5 Related Party Transactions
--------------------------
a) The President of the Company provides management services to
the Company. During the period ended November 30, 2006
management services of $2,000 were charged to operations.
b) During the period ended November 30, 2006 the President of the
Company provided a $17,000 loan to the Company. The loan is
payable on demand, unsecured, and bears interest at 6.0% per
annum. As at November 30, 2006, the Company incurred $83 in
interest expense related to this loan.
F-9
<page>
Grand Motion, Inc.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 2006 - Page 5
Note 6 Income Taxes
------------
The significant components of the Company's deferred tax assets
are as follows:
<table>
<caption>
2006
<s> <c>
Deferred Tax Assets
Non-capital loss carryforward $ 761
Less: valuation allowance for deferred tax asset ( 761)
------------
$ -
============
</table>
There were no temporary differences between the Company's tax and
financial bases that result in deferred tax assets, except for the
Company's net operating loss carryforwards amounting to
approximately $5,075 at November 30, 2006 which may be available
to reduce future year's taxable income.
These carryforwards will expire, if not utilized, commencing in
2026. Management believes that the realization of the benefits
from these deferred tax assets appears uncertain due to the
Company's limited operating history and continuing losses.
Accordingly a full, deferred tax asset valuation allowance has
been provided and no deferred tax asset benefit has been recorded.
F-10
44
================================================================================
Interim Financial Statements
Grand Motion, Inc.
(A Development Stage Company)
February 28, 2007
Index
Balance Sheet F-13
Statement of Operations F-14
Statement of Cash Flows F-15
Statement of Stockholders' Deficit F-16
Notes to the Financial Statements F-17
F-11
45
<page>
GRAND MOTION, INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
February 28, 2007
(Unaudited)
F-12
46
<page>
GRAND MOTION, INC.
(A Development Stage Company)
BALANCE SHEET
<table>
<caption>
February 28, November 30,
2007 2006
---- ----
ASSETS (Unaudited) (Audited)
------
<s> <c> <c>
Current assets
Cash $ 7,663 $ 13,189
Security deposit 175 -
------------ --------------
Total current assets 7,838 13,189
Property and equipment, net 1,752 1,894
Distributor rights 1,000 1,000
------------ -------------
Total assets $ 10,590 $ 16,083
============ =============
LIABILITIES & STOCKHOLDERS'EQUITY
---------------------------------
Current liabilities
Accounts payable $ 9,314 $ -
Due to related parties 3,675 3,675
Notes payable related parties 17,335 17,083
------------ -------------
Total current liabilities 30,324 20,758
------------ -------------
Stockholders' Equity
- --------------------
Capital stock $0.0001 par value;
100,000,000 shares authorized;
4,000,000 shares issued and outstanding 400 400
Deficit accumulated during the development stage ( 20,134) ( 5,075)
------------- ------------
Total Stockholders' Equity ( 19,734) ( 4,675)
------------- ------------
Total Liabilities and Stockholders' Equity $ 10,590 $ 16,083
============= ============
</table>
The accompanying notes are an integral part of these financial statements
F-13
47
<page>
GRAND MOTION, INC.
(A Development Stage Company)
INTERIM STATEMENT OF INCOME
(Unaudited)
<table>
<caption>
July 7, 2006
Three Months (Inception)
Ended Through
February 28, February 28,
2007 2007
---- ----
<s> <c> <c>
Revenue $ - $ -
------------- --------------
Expenses
Accounting and audit fees $ 4,310 $ 4,310
Depreciation 142 184
Bank charges and interest 368 612
Consulting 1,100 1,100
Officer compensation - 2,000
Office and administrative 277 352
Organization costs - 664
Rent 315 315
Travel and promotion 47 2,097
Website development 8,500 8,500
------------- ---------------
Net income (loss) $ ( 15,059) $ ( 20,134)
============= ===============
Net income (loss) per share (Basic and fully diluted) $ ( 0.00)
=============
Weighted average number of common shares outstanding 4,000,000
=============
</table>
The accompanying notes are an integral part of these financial statements
F-14
48
<page>
GRAND MOTION, INC.
(A Development Stage Company)
INTERIM STATEMENT OF CASH FLOWS
(Unaudited)
<table>
<caption>
July 7, 2006
Three Months (Inception)
Ended Through
February 28, February 28,
2007 2007
---- ----
<s> <c> <c>
Cash Flows From Operating Activities
Net income (loss) $ ( 15,059) $ ( 20,134)
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation 142 184
Security deposit ( 175) ( 175)
Accounts payable 9,314 9,314
Accounts payable related parties - 3,675
--------------- ---------------
Net cash provided by (used for) operating activities ( 5,778) ( 7,136)
--------------- ---------------
Cash Flows From Investing Activities
Purchase of fixed assets - ( 1,936)
Marketing and agency rights - ( 1,000)
--------------- ---------------
Net cash provided by (used for) investing activities - ( 2,936)
--------------- ---------------
Cash Flows From Financing Activities
Note payable related party 252 17,335
Issuance of common stock - 400
--------------- ---------------
Net cash provided by (used for) financing activities 252 17,735
--------------- ---------------
Net Increase (Decrease) In Cash ( 5,526) 7,663
Cash At The Beginning Of The Period 13,189 -
--------------- ---------------
Cash At The End Of The Period $ 7,663 $ 7,663
=============== ===============
Supplemental disclosure:
Cash paid for:
Interest $ - $ -
=============== ===============
Income Taxes $ - $ -
=============== ===============
</table>
F-15
The accompanying notes are an integral part of these financial statements
<page>
GRAND MOTION, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<table>
<caption>
Deficit
Accumulated
During the
Common Shares Paid In Development Stockholders'
-------------
Number Par Value Capital Stage Equity
------ --------- ------- ----- ------
<s> <c> <c>
Balances, July 7, 2006 - $ - $ - $ - $ -
Issuance of stock for cash 4,000,000 400 - - 400
Net gain (loss) for the period
ended November 30, 2006 - - - ( 5,075) ( 5,075)
------------ ----------- ----------- ---------- -----------
Balances, November 30, 2006 4,000,000 400 - ( 5,075) ( 4,675)
Net gain (loss) for the period
ended February 28, 2007 - - - ( 15,059) ( 15,059)
------------ ----------- ----------- ---------- -----------
Balances, February 28, 2007 4,000,000 $ 400 $ - $ ( 20,134) $ ( 19,734)
============ =========== =========== =========== ===========
</table>>
F-16
<page>
GRAND MOTION, INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2007
(Unaudited)
Note 1 Nature and Continuance of Operations
------------------------------------
Organization
-------------
The Company was incorporated in the State of Nevada, United States
of America on July 7, 2006, and its fiscal year end is November
30. The Company has obtained a license to market, distribute or
re-sell specialty tours, airline tickets and charter flights
provided by a private company, in the United States of America and
Canada.
Going Concern
-------------
The Company commenced operations on July 7, 2006 and has not
realized any revenues since inception. The Company has a deficit
accumulated to February 28, 2007 in the amount of $20,134. The
ability of the Company to continue as a going concern is dependent
on raising capital to fund its business plan and ultimately to
attain profitable operations. Accordingly, these factors raise
substantial doubt as to the Company's ability to continue as a
going concern. The Company to date has funded its initial
operations through the issuance of 4,000,000 shares of capital
stock for proceeds of $400 and loans and cash advances from a
director in the amount of $21,010. Management plans to raise
additional funds through issuance of additional capital stock and
further loans from director.
Unaudited Interim Financial Statements
--------------------------------------
The accompanying unaudited interim financial statements have been
prepared in accordance with United States generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-QSB of Regulation S-B. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have
been condensed or omitted pursuant to such rules and regulations.
However, except as disclosed herein, there has been no material
changes in the information disclosed in the notes to the financial
statements for the year ended November 30, 2006 included in the
Company's SB-2 filed with the Securities and Exchange Commission.
The interim unaudited financial statements should be read in
conjunction with those financial statements included in the Form
SB-2. In the opinion of Management, all adjustments considered
necessary for a fair presentation, consisting solely of normal
recurring adjustments, have been made. Operating results for the
three months ended February 28, 2007 are not necessarily
indicative of the results that may be expected for the year ending
November 30, 2007.
F-17
51
<page>
Grand Motion, Inc.
(A Development Stage Company)
Notes to the Interim Financial Statements
February 28, 2007
(Unaudited) - Page 3
Note 2 Distributor rights
------------------
Pursuant to a Marketing and Agency Agreement (the "Agreement")
dated November 20, 2006, the Company acquired from a private
company rights for distribution or re-sell specialty tours,
airline tickets and charter flights provided by a private company
(the "Products") in the United States of America and Canada for
the following consideration:
-Cash payment of $1,000 upon signing of the Agreement; - The
Company incurring web sites development expenses up to $10,000
by February 28, 2007;
-The Company incurring minimum marketing expenses of $50,000
USD over the initial two year term of the Agreement.
The Company will be paid commission on a quarterly basis at the
rate of 5.0% of gross sales resulting from the sale of the
Products by the private company.
As at February 28, 2007, the Company paid $1,000 upon signing the
Agreement and incurred $8,500 in website development costs.
Note 3 Capital Stock
-------------
The total number of common shares authorized that may be issued by
the Company is 100,000,000 shares with a par value of one hundred
of one cent ($0.0001) per share and no other class of shares is
authorized.
During the period from July 7, 2006 (inception) to November 30,
2006, the Company issued 4,000,000 shares of common stock to its
director for total proceeds of $400.
To February 28, 2007, the Company has not granted any stock
options and has not recorded any stock-based compensation.
Note 4 Related Party Transactions
--------------------------
c) The President of the Company provides management services to
the Company. During the period ended November 30, 2006
management services of $2,000 were charged to operations.
b) During the period ended November 30, 2006 the President of the
Company provided a $17,000 loan to the Company. The loan is
payable on demand, unsecured, and bears interest at 6.0% per
annum. As at February 28, 2007, the Company incurred $335 in
interest expense related to this loan.
F-18
52
<page>
Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure
The accounting firm of Ronald Chadwick, P.C., Certified Public Accountant,
audited our financial statements. Since inception, we have had no changes in or
disagreements with our accountants.
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
Indemnification of Officer and Directors
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes (the "NRS") and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation that is not the case with our articles
of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the
director has a material conflict of interest;
(2) a violation of criminal law (unless the director had
reasonable cause to believe that his or her conduct was lawful
or no reasonable cause to believe that his or her conduct was
unlawful);
(3) a transaction from which the director derived an improper
personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the
bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final
53
<page>
disposition of the proceeding, promptly following request. This advanced of
expenses is to be made upon receipt of an undertaking by or on behalf of such
person to repay said amounts should it be ultimately determined that the person
was not entitled to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
Other Expenses of Issuance and Distribution
Our estimated expenses in connection with the issuance and distribution of the
securities being registered are estimated to be as follows:
Filing fees $ 1,000
Legal fees and expenses 5,000
Accounting fees and expenses 3,500
Transfer agent fees 1,000
Securities and Exchange Commission registration fee 40.13
-----------------
Total $ 10,540.13
=================
All amounts are estimates other than the Commission's registration fee.
Recent Sales of Unregistered Securities
We completed an offering of 4,000,000 shares of our common stock at a price of
$0.001 per share to Ms. Voitenkova on October 16, 2006, for total proceeds of
$400. We completed this offering pursuant to Rule 903 of Regulation S under the
Securities Act. This sale of shares was completed as an "offshore transaction",
as defined in Rule 902(h) of Regulation S, on the basis that: (i) the investor
was outside of the United States at the time the offer to purchase the shares
was made; and (ii) at the time the subscription agreement for the shares was
executed, the investor was outside of the United States or we had a reasonable
belief that the investor was outside of the United States. We did not engage in
any directed selling efforts, as defined in Regulation S, in the United States.
The investor represented to us that the investor was not a U.S. person, as
defined in Regulation S, and was not acquiring the shares for the account or
benefit of a U.S. Person. The investor represented their intention to acquire
the securities for investment only and not with a view toward distribution.
Appropriate legends have been affixed to the stock certificate issued to the
purchaser in accordance with Regulation S. The investor was in possession of
sufficient information about us to make an informed investment decision. None of
the securities were sold through an underwriter and accordingly, there were no
underwriting discounts or commissions involved. No registration rights were
granted to the purchaser.
54
<page>
Exhibits
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Batcher Zarcone & Baker, LLP with consent to use*
10.1 Marketing and Agency Agreement*
10.2 Loan Agreements
23.1 Consent of Ronald Chadwick, P.C., Certified Public Accountant
99.1 Company's Logo
* - filed as an exhibit to our registration statement on Form SB-2 filed on
March 5, 2007
Undertakings We hereby undertake:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, 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. To include any additional or changed material information
on the plan of distribution.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
4. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
55
<page>
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
5. For determining any liability under the Securities Act of 1933:
i. we shall treat the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by us under Rule 424(b)(1), or (4)
or 497(h) under the Securities Act as part of this registration statement
as of the time the Commission declared it effective. For determining any
liability under the Securities Act of 1933, we shall treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
ii. we shall treat each prospectus filed by us pursuant to Rule 424(b)(3) as
part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement. Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part
of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
of providing the information required by section 10(a) of the Securities
Act shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that
date an underwriter, such date shall be deemed to be a new effective date
of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering
of such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of
sale prior to such effective date, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such effective date; or
iii. we shall treat each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
6. For determining liability of the undersigned small business issuer under the
Securities Act to any purchaser in the initial distribution of the securities,
the undersigned small business issuer undertakes that in a primary offering of
securities of the undersigned small business issuer pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned small
business issuer will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned small business issuer or used or referred to by
the undersigned small business issuer;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business issuer
or its securities provided by or on behalf of the undersigned small
business issuer; and
(iv) Any other communication that is an offer in the offering made by the
undersigned small business issuer to the purchaser.
56
<page>
Signatures
In accordance with the requirements of the Securities Act, Grand Motion, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and authorized this Prospectus on Form SB-2
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Seattle, Washington State, U.S.A., on the 30th day of June 12, 2007.
GRAND MOTION, INC.
By: /s/ Janetta Voitenkova
---------------------------
Janetta Voitenkova
President, CEO and Director
In accordance with the requirements of the Securities Act, this Prospectus has
been signed by the following persons in the capacities and on the dates stated.
SIGNATURES TITLE DATE
- ----------------------- -------------------------- -----------------------
/s/ Janetta Voitenkova President, CEO, CFO, June 12, 2007
- ---------------------- ----------------
Janetta Voitenkova Secretary, Treasurer and
Director
57