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EX-32 - CERTIFICATION - Artificial Intelligence Technology Solutions Inc.ex_32-1.htm
EX-31 - CERTIFICATION - Artificial Intelligence Technology Solutions Inc.ex_31-1.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


Form 10-K /A
Amendment No. 2


þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended February 28, 2013


o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ________to _________


Commission File Number 333-168530


 

On The Move Systems Corp.

(Exact name of registrant as specified in its charter)


Florida

 

27-2343603

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

3001 North Rocky Point Drive East, Suite 200

 

 

Tampa, FL

 

33607

(Address of principal executive offices)

 

(Zip Code)


Registrant’s telephone number, including area code: (813) 367-3511


Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act:


Title

 

Name of each exchange on which registered

Common stock, $0.0001 par value

 

NASDAQ OTC


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, ever Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No þ


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes þ No o




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer

o

 

Accelerated filer

o

 

 

 

 

 

Non-accelerated filer

o

 

Smaller reporting company

þ


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ


The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price on August 31, 2012, is $90,000. Shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.


There were 18,500,000 shares of the registrant’s common stock issued and outstanding as of May 29, 2013.



EXPLANATORY NOTE


On the Move Systems Corp. (the “Company” or “we”) is filing this Amendment No. 2 (the “Second Amendment”) to our Annual Report on Form 10-K for the year ended February 28, 2013, filed on June 13, 2013, (the “Original Filing”), as amended by Amendment 1 to the Form 10-K filed on July 26, 2013 (the “First Amendment”) to restate and amend our previously issued audited consolidated financial statements and related disclosures for the years ended February 28, 2013 and February 29, 2012 previously included in the Original Filing.


Background to the Restatement


On June 11, 2014, the Company determined that due to an error in accounting for our acquisition of Crawford Mobile Install (“CMI”), the Company’s consolidated financial statements as of and for the years ended February 28, 2013 and February 29, 2012 should no longer be relied upon. The purpose of this restatement is to correct the accounting for our acquisition of Crawford Mobile Install (“CMI”). In the Original Filing, the acquisition of CMI was accounted for as an acquisition of a business. However, since John Crawford was our CEO at the time of the acquisition and also owned all of CMI, the acquisition should have been accounted for as a business acquired from an entity under common control according to ASC 805-50-30. We had originally recognized intangible assets and goodwill as a result of the acquisition of CMI. According to ASC 805-50-30, neither should have been recognized. As a result of the restatement, goodwill in the amount of $108,724 and intangible assets in the amount of $20,000 have be removed from assets. In addition, we recognized a loss on the acquisition of CMI in the amount of $128,724.


Effects of Restatement


As originally filed the Original Filing indicated that there were material weaknesses in our internal control over financial reporting and concluded that the Company did not maintain effective internal control over financial reporting as of February 28, 2013. Management has considered the effect of the restatement on our prior conclusions as to the effectiveness of our disclosure controls and procedures and internal control over financial reporting. Management has concluded there is no change in the conclusion that our disclosure controls and procedures and internal control over financial reporting for such periods were not effective as of February 28, 2013.


This Second Amendment amends and restates Items 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and 8 (Financial Statements and Supplementary Data) of Part II of the Original Filing, as necessary based on the restatement of our consolidated financial statements. Additionally, this Second Amendment replaces the interactive data files required by Item 601(b)(101) of Regulation S-K and Sections 405 and 406T of Regulation S-T, that were initially filed on the First Amendment. As required pursuant to the Securities and Exchange Act of 1934, as amended, the Second Amendment also includes updated certifications from the Company’s Chief Executive Officer as Exhibits 31.1 and 32.1.


Except as described above, this Second Amendment does not amend, update or change any other items or disclosures in the Original Filing and the First Amendment and does not purport to reflect any information or events subsequent to the filing thereof. Accordingly, this Second Amendment should be read in conjunction with the Original Filing and First Amendment.


- ii -



IMPORTANT INFORMATION REGARDING THIS FORM 10-K


Unless otherwise indicated, references to “we,” “us,” and “our” in this Annual Report on Form 10-K refer to On The Move Systems Corp.


Readers should consider the following information as they review this Annual Report:


Forward-Looking Statements


The statements contained or incorporated by reference in this Annual Report on Form 10-K that are not historical facts are “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include any statement that may project, indicate or imply future results, events, performance or achievements. The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expect,” “may,” “will,” “should,” “intend,” “plan,” “could,” “estimate” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.


Given the risks and uncertainties relating to forward-looking statements, investors should not place undue reliance on such statements. Forward-looking statements included in this Annual Report on Form 10-K speak only as of the date of this Annual Report on Form 10-K and are not guarantees of future performance. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such expectations may prove to have been incorrect. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.


Except to the extent required by applicable securities laws, we expressly disclaim any obligation or undertakings to release publicly any updates or revisions to any statement or information contained in this Annual Report on Form 10-K, including the forward-looking statements discussed above, to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement or information is based.


- iii -



ON THE MOVE SYSTEMS CORP.

FORM 10-K

TABLE OF CONTENTS


PART I

 

 

Page

Item 1. Business.

 

1

Item 1A. Risk Factors.

 

2

Item 1B. Unresolved Staff Comments.

 

2

Item 2. Properties

 

2

Item 3. Legal Proceedings

 

2

Item 4. Mine Safety Disclosures.

 

2

 

 

 

PART II

 

 

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

2

Item 6. Selected Financial Data.

 

4

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

4

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

7

Item 8. Consolidated financial statements and Supplementary Data

 

8

 

 

 

Report of Independent Registered Public Accounting Firm

 

8

Balance Sheet

 

9

Statement of Operations

 

10

Statement of Changes in Stockholders’ Equity

 

11

Statement of Cash Flows

 

12

Notes to Consolidated Financial Statements

 

13

 

 

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

21

Item 9A. Controls and Procedures.

 

21

Item 9B. Other Information.

 

22

 

 

 

PART III

 

 

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

23

Item 11. Executive Compensation.

 

24

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

26

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

27

Item 14. Principal Accountant Fees and Services.

 

27

 

 

 

PART IV

 

 

 

Item 15. Exhibits and Financial Statement Schedules.

 

28

 

 

 

Signatures

 

29


- iv -



Part I


Item 1. Business.


On the Move Systems Corp. (“we”, “us”, “our”, “OMVS”, or the “Company”) was incorporated in the State of Florida on March 25, 2010. The Company’s business focus is in the mobile electronics markets but it is currently investigating business opportunities within the personal and business safety and protection products. The Company’s fiscal year ends on February 28. The Company is located at 3001 North Rocky Point Drive East, Suite 200, Tampa, Florida 33607. Our telephone number is 941-586-3938.


On March 25, 2011, Crawford Mobile Installation Corp. (“CMIC”), a wholly owned subsidiary of the Company acquired all of the assets and assumed certain liabilities of Crawford Mobile Install (“CMI”). The assets of CMI included cash, inventory, a vehicle and installation equipment. On the date of the acquisition, a material relationship existed between the parties, because John Crawford was the sole officer and director of both the Company and CMIC as well as being the sole proprietor of CMI. The purchase price for the assets and liabilities of CMI was $100,000. From the date of inception, March 25, 2010, through the date of the acquisition of CMI on March 25, 2011, the Company was in the development stage as defined in ASC 915, “Accounting and Reporting by Development Stage Enterprises”. As a result of the acquisition of CMI, the Company has begun to generate revenue from operations and has emerged from the development stage.


We currently provide mobile electronic services under the trade name “On the Move Systems Corporation.” Our services include the sale, installation, and servicing of after-market electronic and audio/video upgrades for markets such as auto, recreational vehicle and boat dealerships, and for government agencies and corporations that administer vehicle fleets for law enforcement, security, emergency response, sanitation, public utility, limousine, taxi, and other services.


To this end, we have created relationships with a multitude of dealerships to provide on-site electronics sales, installation and servicing for vehicles purchased by them or by their customers. We also provide services directly to individual consumers. We currently offer all of our services from our sales and installation vehicle, eliminating the need for our customers to travel to our place of business. Although we maintain a small inventory of the electronic products that we offer to our customers, we anticipate that we will continue to order a majority of these products on an as-needed basis.


We provide our clients with electronic accessories and installation services that allow them and their customers to personalize vehicles for enhanced aesthetics and electronic performance. We believe that our service allows dealerships and other wholesale vehicle purchasers to order models with fewer options from their manufacturers, thereby reducing vehicle inventory costs. The corollary to this is that the dealerships’ retail customers can be given the alternative to select personalized electronic systems for their vehicles that are better suited to their individual budgets, tastes and needs.


We provide our services on-site at vehicle dealerships and directly to individuals. Mr. John B. Crawford, President of CMIC, and our former Chief Executive officer, applies his 18 years of mobile electronic accessory sales and installation experience to identify the latest in mobile audio-visual, GPS, and telecommunications technology, and to consult with our clients to select technology best suited to their specific performance requirements and budgets. Our base of operations is in the city of Sarasota, Florida and we primarily market our services in and around that city. In keeping with future demand and as our capacity allows, we will market and provide our services further afield in adjacent cities and states.


The Company is currently investigating the opportunities in the personal and business safety and protection markets.


Our auditor issued a going concern opinion on our audited financial statements for the year ended February 28, 2013. This means there is substantial doubt that we can continue as an on-going business for the next eighteen (18) months unless we obtain additional capital to pay our bills. Accordingly, we must raise cash from sources other than loans we undertake.


Our ability to continue to implement our business plan is dependent on our ability to generate positive cash flow from operations and to secure sufficient financing, however there is no guarantee that we will be successful in this regard. In order to implement our business plan, we anticipate that we will require not less than $425,000 in financing. We have taken no steps to secure the $425,000 in additional financing that we will need to implement our business plan. Furthermore, even if we successfully execute our business and establish operations, there is no guarantee that there will be a significant market for our services or that we will achieve significant revenues, if any.


- 1 -



EMPLOYEES AND EMPLOYMENT AGREEMENTS


As of February 28, 2013, we have two employees. We do not have any employment agreements with any employees.


We do not presently have pension, health insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our sole director and officer.


Item 1A. Risk Factors.


As a smaller reporting company we are not required to provide the information required by this item.


Item 1B. Unresolved Staff Comments.


Not applicable.


Item 2. Properties.


Executive Offices


Our executive offices are located at 3001 North Rocky Point Drive East, Suite 200, Tampa, Florida 33607. We rent office space on a month-to-month basis.


Item 3. Legal Proceedings.


We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.


Item 4. Mine Safety Disclosures.


Not applicable.


Part II


Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.


Market Information


Our common stock began trading on the “Over the Counter” Bulletin Board (“OTC”) under the symbol “OMVS” in June 2011. The following table sets forth, for the period indicated, the prices of the common stock in the over-the-counter market, as reported and summarized by OTC Markets Group, Inc. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions. There is an absence of an established trading market for the Company’s common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.


 

 

High

 

Low

 

Fiscal Year Ended February 29, 2012

 

 

 

 

 

Quarter ended August 31, 2011

 

$

2.75

 

$

1.60

 

Quarter ended November 30, 2011

 

$

2.25

 

$

0.08

 

Quarter ended February 29, 2012

 

$

0.22

 

$

0.04

 

 

 

 

 

 

 

 

 

Fiscal Year Ended February 28, 2013

 

 

 

 

 

Quarter ended May 31, 2012

 

$

0.14

 

$

0.01

 

Quarter ended August 31, 2012

 

$

0.02

 

$

0.00

 

Quarter ended November 30, 2012

 

$

0.02

 

$

0.00

 

Quarter ended February 28, 2013

 

$

0.01

 

$

0.00

 


- 2 -



Holders


As of the date of this filing, there were four holders of record of our common stock.


Dividends


To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.


Common Stock


We are authorized to issue 100,000,000 shares of common stock, with a par value of $0.0001. The closing price of our common stock on May 28, 2013 as quoted by OTC Markets Group, Inc., was $0.10.


Shares of our common stock:


 

have equal ratable rights to dividends from funds legally available if and when declared by our Board of Directors;

 

 

 

 

are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;

 

 

 

 

do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

 

 

 

 

are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.


We refer you to the Bylaws of our Articles of Incorporation and the applicable statutes of the State of Florida for a more complete description of the rights and liabilities of holders of our securities.


There were 18,500,000 shares of common stock issued and outstanding as of May 28, 2013. All shares of common stock have one vote per share on all matters including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non- assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company’s assets available for distribution to them after satisfaction of creditors and preferred shareholders, if any. The holders of common stock of the Company are entitled to equal dividends and distributions per share with respect to the common stock when, as and if, declared by the Board of Directors from funds legally available.


During the year ended February 28, 2013, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.


Non-cumulative voting


Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS


The following table shows the number of shares of common stock that could be issued upon exercise of outstanding options and warrants, the weighted average exercise price of the outstanding options and warrants, and the remaining shares available for future issuance as of February 28, 2013.


- 3 -



Plan category

 

Number of securities to be

issued upon exercise of

outstanding options, warrants

and rights

 

Weighted average exercise

price of outstanding

options, warrants and rights

 

Number of securities

remaining available

for future issuance

 

Equity compensation plans approved by security holders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans not approved by security holders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 


Preferred Stock


Our authorized preferred stock consists of 10,000,000 shares of $0.0001 par value preferred stock. As of the date of this report, there are no shares of preferred stock outstanding. The Company’s preferred stock ranks senior to all other equity securities, including common stock. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purpose.


Recent Sales of Unregistered Securities


None.


Item 6. Selected Financial Data.


As a smaller reporting company, we are not required to provide the information required by this Item.


Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


FORWARD LOOKING STATEMENTS


Caution Regarding Forward-Looking Information


All statements contained in this Form 10-K, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” and similar expressions . All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new acquisitions, products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties that may cause actual results to differ materially.


Consequently, all of the forward-looking statements made in this Form 10-K are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company’s views as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


The following discussion and analysis should be read in connection with the Company’s consolidated financial statements and related notes thereto, as included in this report.


The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management.


- 4 -



Going Concern


We incurred a net loss of $ 315,176 for the year ended February 28, 2013. Net cash used by operations for the year ended February 28, 2013 was $ 233,648 . We do not anticipate having positive net income in the immediate future. These conditions create an uncertainty as to our ability to continue as a going concern.


We will need to obtain loans or other financing in order to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will be able to obtain these loans or that they will be available to us on terms that are acceptable to the Company. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.


Results of Operations for the fiscal year ended February 28, 2013 compared to the fiscal year ended February 29, 2012


Revenue, Cost of Goods Sold and Gross Profit


During the fiscal year ended February 28, 2013, we recognized revenue of $114,024 and cost of goods sold of $69,809 resulting in gross profit of $44,215 or 39%. During the fiscal year ended February 29, 2012, we recognized revenue of $72,256 and cost of goods sold of $32,404, resulting in gross profit of $39,852 or 55%.  Revenue has increased 58% as a result of efforts to market our services to more dealers. Although revenue increased, the gross profit percentage decreased from fiscal 2012 to fiscal 2013. The costs of the components that we purchase to install in customer vehicles have increased, and we have not yet been able to pass those increased costs to the customer.


General and administrative expenses


We recognized general and administrative expenses in the amount of $ 348,793 and $ 4,110,219 for the fiscal years ended February 28, 2013 and February 29, 2012, respectively. During the fiscal year ended February 29, 2012, we issued stock for services resulting in general and administrative expense of $3,750,000. If the expense related to common stock for services were excluded from general and administrative expense, general and administrative expense for the year ended February 29, 2012 would have been $ 360,219 which is comparable in amount to general and administrative expense for the year ended February 28, 2013.


Interest expense


We incurred interest expense of $10,598 and $14,373 for the fiscal year ended February 28, 2013 and February 29, 2012, respectively, primarily related to a note payable related to the acquisition of CMI and convertible notes payable.


Net loss


Net loss for the fiscal year ended February 28, 2013 decreased to $ 315,176 from $ 4,213,464 for the fiscal year ended February 29, 2012. The decrease in the net loss was primarily the result of the decrease in general and administrative expenses discussed above.


Liquidity and Capital Resources


Net cash used by operating activities was $ 233,648 for the fiscal year ended February 28, 2013.


We anticipate needing a minimum of $425,000 to effectively execute our business plan over the next eighteen months. Currently available cash is not sufficient to allow us to commence full execution of our business plan. Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.


As of the date of this report, the current funds available to the Company will not be sufficient to continue maintaining a reporting status. Management believes if the Company cannot maintain its reporting status with the SEC it will have to cease all efforts directed towards the Company. As such, any investment previously made would be lost in its entirety.


The Company currently has no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.


- 5 -



If the Company is unable to raise the funds partially through this offering the Company will seek alternative financing through means such as borrowings from institutions or private individuals. There can be no assurance that the Company will be able to keep costs from being more than these estimated amounts or that the Company will be able to raise such funds. Even if we sell all shares offered through our registration statement, we expect that the Company will seek additional financing in the future. However, the Company may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable bankruptcy laws.


Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements. Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors’ independence, audit committee oversight, and the adoption of a code of ethics. Our Board of Directors is comprised of one individual who is also our executive officer. Our executive officer makes decisions on all significant corporate matters such as the approval of terms of the compensation of our executive officer and the oversight of the accounting functions.


Although the Company has adopted a Code of Ethics and Business Conduct the Company has not yet adopted any of these other corporate governance measures and, since our securities are not yet listed on a national securities exchange, the Company is not required to do so. The Company has not adopted corporate governance measures such as an audit or other independent committees of our board of directors as we presently do not have any independent directors. If we expand our board membership in future periods to include additional independent directors, the Company may seek to establish an audit and other committees of our board of directors. It is possible that if our Board of Directors included independent directors and if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.


Additional Financing


Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.


Off Balance Sheet Arrangements


None.


Critical Accounting Policies and Recent Accounting Pronouncements


We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.


A complete discussion of our accounting policies is included in Notes 2 and 3 of the Notes to the Consolidated Financial Statements.


- 6 -



USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


GOING CONCERN - The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the fiscal year ended February 28, 2013, the Company had a net loss of $ 315,176 and had negative cash flow from operating activities of $ 233,648 . In view of these matters, the Company’s ability to continue as a going concern is dependent upon its ability to achieve a level of profitability. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.


REVENUE AND COST RECOGNITION - The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of sales returns and allowances.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk.


As a smaller reporting company, we are not required to provide the information required by this Item.


- 7 -



Item 8. Financial Statements and Supplementary Data.


Messineo & Co, CPAs LLC

2471 N McMullen Booth Rd - Ste. 302

Clearwater, FL  33759-1362

T: (727) 421-6268

F: (727) 674-0511


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors of:

On The Move Systems, Corp.

Tampa, Florida


We have audited the accompanying consolidated balance sheets of On The Move Systems, Corp. as of February 28, 2013 and February 29, 2012 and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of On The Move Systems Corp. as of February 28, 2013 and February 29, 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.


As discussed in Note 1 to the financial statements, the February 28, 2013 and February 29, 2012 financial statements have been restated to correct a misstatement.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring losses from operations, a working capital deficit, negative cash flows from operations and a stockholders’ deficit. The Company currently relies on shareholder funding of operating activities and I requiring traditional financing or equity funding to continue its operating activities. These conditions 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 2. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Messineo & Co. CPAs, LLC

Clearwater, Florida

June 13, 2013, except for Note 1, which is dated June 17, 2014


- 8 -



On The Move Systems Corp.

CONSOLIDATED BALANCE SHEETS


 

 

February 28, 2013

 

February 29, 2012

 

ASSETS

 

(as restated)

 

(as restated)

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,718

 

$

18,690

 

Accounts receivable

 

 

3,794

 

 

5,702

 

Inventory

 

 

22,010

 

 

17,135

 

Total current assets

 

 

44,522

 

 

41,527

 

 

 

 

 

 

 

 

 

Fixed assets, net of accumulated depreciation of $26,871 and $21,657

 

 

32,625

 

 

37,839

 

TOTAL ASSETS

 

$

77,147

 

$

79,366

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

107,200

 

$

28,071

 

Accounts payable and accrued expenses – related party

 

 

 

 

10,446

 

Current portion of notes payable and accrued interest payable

 

 

273,462

 

 

288,115

 

Total Current Liabilities

 

 

380,662

 

 

326,632

 

 

 

 

 

 

 

 

 

Convertible note payable

 

 

313,792

 

 

32,600

 

Notes payable

 

 

2,003

 

 

10,467

 

Notes payable to related party

 

 

65,395

 

 

79,196

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

761,852

 

 

448,895

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding

 

 

 

 

 

Common stock: 100,000,000 authorized; $0.0001 par value 18,500,000 shares issued and outstanding

 

 

1,850

 

 

1,850

 

Additional paid-in capital

 

 

3,877,150

 

 

3,877,150

 

Accumulated deficit

 

 

( 4,563,705

)

 

( 4,248,529

)

TOTAL STOCKHOLDERS’ DEFICIT

 

 

( 684,705

)

 

( 369,529

)

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$

77,147

 

$

79,366

 


The accompanying notes are an integral part of these consolidated financial statements.


- 9 -



On The Move Systems Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS


 

Year Ended

 

 

February 28, 2013

 

February 29, 2012

 

 

(as restated)

 

(as restated)

 

REVENUE

$

114,024

 

$

72,256

 

COST OF GOODS SOLD

 

69,809

 

 

32,404

 

GROSS PROFIT

 

44,215

 

 

39,852

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

348,793

 

 

4,110,219

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

( 304,578

)

 

( 4,070,367

)

 

 

 

 

 

 

 

OTHER EXPENSE:

 

 

 

 

 

 

Loss on acquisition of Crawford Mobile Install

 

 

 

( 128,724

)

Interest expense

 

(10,598

)

 

(14,373

)

 

 

 

 

 

 

 

Net loss

$

( 315,176

)

$

( 4,213,464

)

 

 

 

 

 

 

 

Net loss per share – basic and fully diluted

$

(0.02

)

$

( 0.28

)

 

 

 

 

 

 

 

Weighted average number of common shares outstanding-
basic and fully diluted

 

18,500,000

 

 

14,987,705

 


The accompanying notes are an integral part of these consolidated financial statements.


- 10 -



On The Move Systems Corp.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT


 

 

Common Stock

 

Additional
Paid-In

 

Accumulated

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, February 28, 2011

 

12,500,000

 

$

1,250

 

$

60,250

 

$

(35,065

)

$

26,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Services

 

1,500,000

 

 

150

 

 

3,749,850

 

 

 

 

3,750,000

 

- Conversion of debt

 

4,500,000

 

 

450

 

 

67,050

 

 

 

 

67,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss (as restated)

 

 

 

 

 

 

 

( 4,213,464

)

 

( 4,213,464

)

Balance, February 29, 2012 (as restated)

 

18,500,000

 

 

1,850

 

 

3,877,150

 

 

( 4,248,529

)

 

( 369,529

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss (as restated)

 

 

 

 

 

 

 

( 315,176

)

 

( 315,176

)

Balance, February 28, 2013 (as restated)

 

18,500,000

 

$

1,850

 

$

3,877,150

 

$

( 4,563,705

)

$

( 684,705

)


The accompanying notes are an integral part of these consolidated financial statements.


- 11 -



On The Move Systems Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS


 

Year Ended

 

 

February 28, 2013

 

February 29, 2012

 

 

(as restated)

 

(as restated)

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

$

( 315,176

)

$

( 4,213,464

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

5,214

 

 

4,498

 

Stock-based compensation

 

 

 

3,750,000

 

Loss on acquisition of Crawford Mobile Install

 

 

 

128,724

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Accounts receivable

 

1,908

 

 

(3,660

)

Inventory

 

(4,875

)

 

(16,685

)

Accounts payable and accrued liabilities

 

68,683

 

 

31,170

 

Accrued interest payable

 

10,598

 

 

14,373

 

Net cash used in operating activities

 

( 233,648

)

 

(305,044

)

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Acquisition of Crawford Mobile, net of cash acquired

 

 

 

(7,700

)

Purchases of fixed assets

 

 

 

(23,290

)

Net cash used by investing activities

 

 

 

(30,990

)

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from advances

 

255,941

 

 

284,938

 

Proceeds from issuance of common stock

 

 

 

 

Repayments of notes payable

 

(8,464

)

 

(36,974

)

Repayments of notes payable to related parties

 

(13,801

)

 

(22,000

)

Net cash provided by financing activities

 

233,676

 

 

225,964

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

28

 

 

(110,070

)

CASH, BEGINNING OF PERIOD

 

18,690

 

 

128,760

 

CASH, END OF PERIOD

$

18,718

 

$

18,690

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

$

 

$

 

Taxes

$

 

$

 

 

 

 

 

 

 

 

Noncash Investing and Financing Transactions:

 

 

 

 

 

 

Acquisition of Crawford Mobile Installation for note payable

$

 

$

90,000

 


The accompanying notes are an integral part of these consolidated financial statements.


- 12 -



On the Move Systems Corp.

Notes to Consolidated Financial Statements

For the year ended February 28, 2013


1. Background Information


On The Move Systems Corp., a Florida corporation (“we”, “us”, “our”, “OMVS”, or the “Company”), was formed to provide mobile electronic services to automobile, recreational vehicle and boat dealerships, government agencies as well as individual consumers. The Company installs its inventoried after market electronic products desired by the customer at their location. The Company was incorporated on March 25, 2010 with its corporate headquarters located in Tampa, Florida.


On March 25, 2011, Crawford Mobile Installation Corp. (“CMIC”), a wholly owned subsidiary of the Company acquired all of the assets and assumed certain liabilities of Crawford Mobile Install (“CMI”). The assets of CMI included cash, inventory, a vehicle and installation equipment. On the date of the acquisition, a material relationship existed between the parties, because John Crawford was the sole officer and director of both the Company and CMIC as well as being the sole proprietor of CMI. The purchase price for the assets and liabilities of CMI was $100,000.


Restatement


On June 11, 2014, the Company determined that due to an error in accounting for our acquisition of Crawford Mobile Install (“CMI”), the Company’s consolidated financial statements as of and for the years ended February 28, 2013 and February 29, 2012 should no longer be relied upon. The purpose of this restatement is to correct the accounting for our acquisition of Crawford Mobile Install (“CMI”). In the Original Filing, the acquisition of CMI was accounted for as an acquisition of a business. However, since John Crawford was our CEO at the time of the acquisition and also owned all of CMI, the acquisition should have been accounted for as a business acquired from an entity under common control according to ASC 805-50-30. We had originally recognized intangible assets and goodwill as a result of the acquisition of CMI. According to ASC 805-50-30, neither should have been recognized. As a result of the restatement, goodwill in the amount of $108,724 and intangible assets in the amount of $20,000 have be removed from assets. In addition, we recognized a loss on the acquisition of CMI in the amount of $128,724.


The Company as a result restated the consolidated financial statements as of and for the years ended February 28, 2013 and February 29, 2012.


- 13 -



On The Move Systems Corp.

RESTATED CONSOLIDATED BALANCE SHEETS


 

February 28, 2013

 

 

As originally
reported

 

Adjustments

 

 

As Restated

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Total current assets

$

44,522

 

 

 

 

$

44,522

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net of accumulated depreciation of $26,871

 

32,625

 

 

 

 

 

32,625

 

Intangible assets, net of accumulated amortization of $7,667

 

12,333

 

(12,333

)

(1)

 

 

Goodwill

 

54,724

 

(54,724

)

(1)

 

 

TOTAL ASSETS

$

144,204

 

 

 

 

$

77,147

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

761,852

 

 

 

 

 

761,852

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding

 

 

 

 

 

 

 

Common stock: 100,000,000 authorized; $0.0001 par value 18,500,000 shares issued and outstanding

 

1,850

 

 

 

 

 

1,850

 

Additional paid-in capital

 

3,877,150

 

 

 

 

 

3,877,150

 

Accumulated deficit

 

(4,496,648

)

(67,057

)

(2)

 

(4,563,705

)

TOTAL STOCKHOLDERS’ DEFICIT

 

(617,648

)

 

 

 

 

(684,705

)

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

144,204

 

 

 

 

$

77,147

 



 

February 29, 2012

 

 

As originally
reported

 

Adjustments

 

 

As Restated

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Total current assets

$

41,527

 

 

 

 

$

41,527

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net of accumulated depreciation of $21,657

 

37,839

 

 

 

 

 

37,839

 

Intangible assets, net of accumulated amortization of $3,667

 

16,333

 

(16,333

)

(1)

 

 

Goodwill

 

108,724

 

(108,724

)

(1)

 

 

TOTAL ASSETS

$

204,423

 

 

 

 

$

79,366

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

448,895

 

 

 

 

 

448,895

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding

 

 

 

 

 

 

Common stock: 100,000,000 authorized; $0.0001 par value 18,500,000 shares issued and outstanding

 

1,850

 

 

 

 

1,850

 

Additional paid-in capital

 

3,877,150

 

 

 

 

3,877,150

 

Accumulated deficit

 

(4,123,472

)

(125,057

)

(3)

 

(4,248,529

)

TOTAL STOCKHOLDERS’ DEFICIT

 

(244,472

)

 

 

 

 

(369,529

)

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

204,423

 

 

 

 

$

79,366

 


- 14 -



On The Move Systems Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS


 

Year Ended February 28, 2013

 

 

As originally
reported

 

Adjustments

 

As Restated

 

 

 

 

 

 

 

 

GROSS PROFIT

$

44,215

 

 

 

 

44,215

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

352,793

 

(4,000

) (4)

 

348,793

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(308,578

)

 

 

 

(304,578

)

 

 

 

 

 

 

 

 

 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

Impairment of goodwill

 

(54,000

)

54,000

  (5)

 

— 

 

Interest expense

 

(10,598

)

 

 

 

(10,598

)

 

 

 

 

 

 

 

 

 

Net loss

$

(373,176

)

 

 

$

(315,176

)

 

 

 

 

 

 

 

 

 

Net loss per share – basic and fully diluted

$

(0.02

)

 

 

$

(0.02

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding-
basic and fully diluted

 

18,500,000

 

 

 

 

18,500,000

 



 

Year Ended February 29, 2012

 

 

As originally
reported

 

Adjustments

 

As Restated

 

 

 

 

 

 

 

 

GROSS PROFIT

$

39,852

 

 

 

$

39,852

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

4,113,886

 

(3,667

) (4)

 

4,110,219

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(4,074,034

)

 

 

 

(4,070,367

)

 

 

 

 

 

 

 

 

 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

Loss on acquisition of Crawford Mobile Install

 

 

(128,724

) (4)

 

(128,724

)

Interest expense

 

(14,373

)

 

 

 

(14,373

)

 

 

 

 

 

 

 

 

 

Net loss

$

(4,088,407

)

 

 

$

(4,213,464

)

 

 

 

 

 

 

 

 

 

Net loss per share – basic and fully diluted

$

(0.27

)

 

 

$

(0.28

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding-
basic and fully diluted

 

14,987,705

 

 

 

 

14,987,705

 



Adjustments to consolidated financial statements:


(1)

Remove intangible assets and goodwill from the consolidated balance sheets.

(2)

Loss on acquisition of CMI for the year ended February 29, 2012 in the amount of $128,724 offset by the reversal of the impairment of goodwill in the amount of $54,000 and amortization of intangibles of $7,667.

(3)

Loss on acquisition of CMI in the amount of $128,724 offset by the reversal of the amortization of intangibles of $3,667.

(4)

Reverse amortization of intangible assets.

(5)

Reverse impairment of goodwill

(6)

Recognize loss on acquisition of CMI.


- 15 -



2. Going Concern


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended February 28, 2013, the Company had a net loss of $ 315,176 . The Company has not generated positive cash flow from operations since inception and does not expect to generate positive cash flow from operations during the coming year. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to achieve a level of profitability which would generate positive cash flow or from its ability to raise adequate capital either from sales of equity securities or the issuance of debt. The Company intends on financing its operations and its working capital needs largely through the issuance of debt. There is no assurance that the Company will be able to obtain adequate financing when needed or that such financing will be available on terms that are acceptable to the Company. The consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.


3. Basis of Presentation and Accounting Policies


BASIS OF PRESENTATION - The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. See Note 2 regarding the assumption that the Company is a going concern.  


PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts On the Move Systems Corp. and our wholly-owned subsidiary, Crawford Mobile Installation Corp.  All material intercompany accounts and transactions are eliminated in consolidation. The year end for the Company and its subsidiary is February 28.  


USE OF ESTIMATES - The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


CASH AND CASH EQUIVALENTS - All cash, other than cash held in escrow, is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents.


INVENTORY - Inventory represents purchased aftermarket electronic products and other items valued at the lower of cost or market with cost determined using the specific identification method, and with market defined as the lower of replacement cost or realizable value.


FIXED ASSETS – Fixed assets of the Company include vehicles and are stated at cost. In accordance with ASC Topic 360, expenditures for fixed assets which substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred.


- 16 -



Depreciation is provided principally on the straight-line method over the estimated useful lives of four years for financial reporting purposes.


REVENUE AND COST RECOGNITION - The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of sales returns and allowances.


ADVERTISING COSTS - The Company’s policy regarding advertising is to expense advertising when incurred.


RESEARCH AND DEVELOPMENT EXPENSES - Expenditures for research, development, and engineering of products are expensed as incurred.


INCOME TAXES - Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.


The Company adopted the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10), on January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.


EARNINGS (LOSS) PER SHARE - Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The Company’s convertible debt is considered anti-dilutive due to the Company’s net loss for the year ended February 28, 2013 and February 29, 2012. As a result, the Company did not have any potentially dilutive common shares for those periods.


FINANCIAL INSTRUMENTS - In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


 

·

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

 

 

·

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

 

 

·

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.


- 17 -



Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value.


RECENT ACCOUNTING PRONOUNCEMENTS


We have reviewed the FASB issued Accounting Standards Update, accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


4. Inventory


The Company follows FASB ASC 330, “Inventory”.  Inventories are stated at the lower of cost or net realizable value. The cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is determined using the weighted average cost method. Inventory is reduced for the estimated losses due to obsolescence. This reduction is determined for groups of products based on purchases in the recent past and/or expected future demand.  Our inventory is made up of electronic components which we have acquired from wholesalers, retailers and manufacturers to install in customer vehicles.


5. Acquisition of CMI and Goodwill


On March 25, 2011, the Company purchased the assets and businesses of CMI, a sole proprietorship owned by the Company’s sole officer and director, in execution of its business plan. The terms of the acquisition required a down payment of $10,000 payable at closing with a Promissory Note for $90,000, at 10% interest rate, payable in monthly installments of $2,500 with a balloon payment of the remaining principal and interest due February 1, 2014.


The acquisition of CMI was accounted for as an acquisition of a business acquired from an entity under common control according to ASC 805-50-30 . CMI’s results of operations and cash flows are included in the accompanying consolidated financial statements from the date of acquisition.


CMI’s assets and liabilities were recorded at their book value prior to their acquisition by the Company. The following table summarizes the book values of the assets acquired and liabilities assumed at the date of acquisition:


 

 

Amount

 

Cash

 

$

2,300

 

Accounts receivable

 

 

2,042

 

Inventory

 

 

450

 

Fixed assets

 

 

19,047

 

Total assets acquired

 

 

23,839

 

 

 

 

 

 

Debt assumed (accounts and notes payable)

 

 

52,563

 

Net liabilities acquired

 

$

( 28,724

)

 

 

 

 

 

Cash payment at closing

 

$

10,000

 

Note payable to John Crawford

 

 

90,000

 

 

 

 

 

 

Total purchase price

 

$

100,000

 


As a result of the acquisition, the Company recognized a loss on the acquisition of CMI in the amount of $ 128,724 .


- 18 -



6. Fixed Assets


Fixed assets of the Company include vehicles and are stated at cost. Expenditures for fixed assets which substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred.


Depreciation is provided principally on the straight-line method over the estimated useful lives ranging of four years for financial reporting purposes. The Company recognized depreciation expense of $5,214 and $4,498 during the years ended February 28, 2013 and February 29, 2012.


7. Related Party Transactions


The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.


On March 25, 2011, CMIC, a wholly owned subsidiary of the Company, entered into an agreement to purchase all of the assets and the business of CMI for $100,000. CMI was a sole proprietorship owned and operated by John Crawford. John Crawford is also the sole officer-director of the Company and CMIC. The purchase price was paid with $10,000 in cash at closing and a note payable for the remaining $90,000. The note bears interest at 10% per year and is payable in monthly installments of $2,500 with a balloon payment of the remaining principal and interest due February 1, 2014. The balance of the note payable was $65,395 and $79,196 as of February 28, 2013 and February 29, 2012, respectively.


As of February 28, 2012, there were accrued liabilities in the amount of $10,446 owed to related parties. These amounts related primarily to accrued compensation which was paid during the year ended February 28, 2013.


The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties.


8. Income Taxes


There are no current or deferred income tax expense or benefit for the fiscal years ended February 28, 2013 and February 29, 2012.


The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes.


 

 

Year Ended
February 28, 2013

 

Year Ended
February 29, 2012

 

Tax benefit at U.S. statutory rate

 

$

102,612

 

$

1,144,800

 

Non deductible stock based compensation

 

 

 

 

(1,050,000

)

Valuation allowance

 

 

(102,612

)

 

(94,800

)

Tax benefit

 

$

 

$

 


The Company did not have any temporary differences during the fiscal years ended February 28, 2013 or February 29, 2012.


The Company has not recognized an income tax benefit for the period based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the current period presented is offset by a valuation allowance (100%) established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.


- 19 -



9. Notes Payable


On February 28, 2011, the Company borrowed $100,100 through a convertible note, for the purpose of raising operating capital. Under the terms of the note, interest shall accrue at 7% per annum; and principal and accrued interest shall become due on February 27, 2013, unless extended by mutual consent of the parties. Unpaid principal and accrued interest are convertible into common stock of the company at $0.015 per share.


On November 3, 2011, the holder of the note elected to convert principal in the amount of $67,500 into 4,500,000 shares of common stock. As of February 28, 2012, the balance of the convertible note payable was $32,600.


On January 31, 2012, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $281,192 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on February 28, 2015.  The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.01 per share.


The Company evaluated the terms of this note in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be greater than the market value of underlying common stock at the inception of the note.  Therefore, the Company did not recognize a beneficial conversion feature.

 

During the year ended February 28, 2013, the Company received advances in the amount of $255,941 for working capital. These advances are non-interest bearing and payable on demand.


10. Subsequent Events


Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment or disclosure.


- 20 -



Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.


History of auditor changes:


Our financial statements were previously audited by the firm of Peter Messineo, CPA (“PM”). In December 2012 PM merged into the firm known as DKM Certified Public Accountants (“DKM”). DKM has not performed an audited of our financial statement during the period in which they were named as our independent registered public accountants. In April 16, 2013 the agreement of DKM and PM was terminated. The successor firm named in (2) is a continuation of the original (PM) registered audit firm.


(1)  Previous Independent Auditors:


a.    On June 7, 2013, the Company dismissed the registered independent public accountant, DKM Certified Public Accountants, of Clearwater Florida (“DKM”).


b.    DKM had not issued an audit report during the period of service that DKM was named as the registered independent accountant. The financial statements for the year ended February 28, 2012 and for the period March 25, 2010 (date of inception) through February 28, 2012 were audited by PM, contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to audit scope or accounting, except that the report contained an explanatory paragraph stating that there was substantial doubt about the Company’s ability to continue as a going concern.


c.    Our Board of Directors participated in and approved the decision to change independent accountants. Through the period covered by the financial audit for the year ended February 28, 2013 and through the current date, there have been no disagreements with DKM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of DKM would have caused them to make reference thereto in their report on the financial statements. Through the interim period June 7, 2013 (the date of dismissal), there have been no disagreements with DKM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of DKM would have caused them to make reference thereto in their report on the financial statements.


d.    We have authorized DKM to respond fully to the inquiries of the successor accountant


e.    During the years ended February 28, 2012 and the interim period through June 7, 2013, there have been no reportable events with us as set forth in Item 304(a)(1)(iv) of Regulation S-K.


f.    The Company provided a copy of the foregoing disclosures to DKM prior to the date of the filing of this Report and requested that DKM furnish it with a letter addressed to the Securities & Exchange Commission stating whether or not it agrees with the statements in this Report.  A copy of such letter is filed as Exhibit 16.1 to this Form 8-K.


(2)  New Independent Accountants:


a.    On June 7, 2013, the Company engaged Messineo & Co, CPAs, LLC (“M&Co”) of Clearwater, Florida, as its new registered independent public accountant. During the year ended February 28, 2013 and 2012 and prior to June 7, 2013 (the date of the new engagement), we did not consult with M&Co regarding (i) the application of accounting principles to a specified transaction, (ii) the type of audit opinion that might be rendered on the Company’s financial statements by M&Co, in either case where written or oral advice provided by M&Co would be an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issues or (iii) any other matter that was the subject of a disagreement between us and our former auditor or was a reportable event (as described in Items 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K, respectively).


Item 9A. Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


- 21 -



Limitations on Systems of Controls


Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.


Management’s Report on Internal Control Over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management is required to base its assessment of the effectiveness of our internal control over financial reporting on a suitable, recognized control framework, such as the framework developed by the Committee of Sponsoring Organizations (COSO). The COSO framework, published in Internal Control-Integrated Framework , is known as the COSO Report. Our principal executive officer and our principal financial officer, have has chosen the COSO framework on which to base its assessment. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of February 28, 2013.


This annual report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report on Form 10-K. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:


1.

As of February 28, 2013, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Our management is dominated by a single individual without other adequate compensating controls. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

 

 

2.

As of February 28, 2013, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our consolidated financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.


Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of February 28, 2013, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.


Changes In Internal Control Over Financial Reporting


There were no changes in our internal control over financial reporting that occurred during the three months ended February 28, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Item 9B. Other Information.


None.


- 22 -



Part III


Item 10. Directors, Executive Officers and Corporate Governance.


Officers and Directors


Our sole Officer and Director will serve until his successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serve until his successor(s) is duly elected and qualified, or until he is removed from office. The board of directors has no nominating, auditing or compensation committees.


The name, address, age and position of our president, secretary/treasurer, and director is set forth below:


Name and Address

 

Age

 

Position(s)

 

 

 

 

 

Patrick Brown

 

46

 

President, Secretary/Treasurer

3001 North Rocky Point Drive East, Suite 200

 

 

 

Chief Executive Officer

Tampa, Florida 33607

 

 

 

Principal Financial Officer and Sole Director


John Crawford was the sole Officer and Director at the inception of the Company.


On September 12, 2011 our Board of Directors appointed Patrick Brown to serve as Chief Executive Officer and President. Mr. Brown was also appointed as a director. Mr. Brown is being compensated $5,000 per month for his services. There is no written employment agreement between the Company and Mr. Brown.


Business Experience


PATRICK BROWN, CHIEF EXECUTIVE OFFICER AND SOLE DIRECTOR


Over the past two decades, Mr. Brown has cultivated a wealth of knowledge and expertise as an executive and financial consultant for international clean-energy innovators in the U.S. and abroad. In addition to his work assessing the prospects and feasibility of clean-energy projects, Mr. Brown is highly experienced in securing financing for new technologies from government and venture capital sources. Prior to joining On The Move Systems Corp. Mr. Brown was the President of West Coast Financial Services, Ltd. which provided boutique financial consulting services for private and pre-listed public companies. From 2009 – 2011, he worked for MNP, LLP, a Canadian accounting firm, where he maintained a client base in entertainment, renewable energy and emerging markets. From 2005 to 2009, he worked for RSM Richter, LLP where he branded the firm’s emerging markets and renewable energy practice specialty. He is trained as a Canadian Chartered Accountant, and holds a diploma from the British Columbia Institute of Technology in Financial Management with an option in Taxation. Mr. Brown also serves as Chief Executive Office and sole director of Rainbow Coral Corp.


Mr. Brown does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.


Family Relationships


There are no family relationships among our directors, executive officers or persons nominated to become executive officers or directors.


Involvement in Certain Legal Proceedings


During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listed in Item 401 (f) of Regulation S-K.


Arrangements


There are no arrangements or understandings between an executive officer, director or nominee and any other person pursuant to which he was or is to be selected as an executive officer or director.


- 23 -



Item 11. Executive Compensation.


Mr. Brown is being paid $5,000 per month. We have no employment agreement with Mr. Brown. He receives no other compensation other than the salary described above.


Subsequent to the acquisition of the assets of Crawford Mobil Install, Mr. Crawford is being compensated at a rate of $2,500 per month.


The table below summarizes all compensation awarded to, earned by, or paid to our named Officers and Directors for all services rendered in all capacities to us during the fiscal years ended February 28, 2013 and February 29, 2012, and for the period from inception (March 25, 2010) through February 29, 2011.


SUMMARY COMPENSATION TABLE


Name and principal position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock
Awards
($)

 

Option
Awards
($)

 

Non-Equity
Incentive Plan
Compensation
($)

 

Nonqualified
Deferred
Compensation
Earnings ($)

 

All Other
Compensation

 

Total
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patrick Brown, CEO

 

2013

 

$ 120,000

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ 120,000

 

 

2012

 

$  55,000

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$   55,000

 

 

2011

 

$         —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$          —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chet Gutowsky, former CEO

 

2012

 

$        —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$        —

 

 

2011

 

$ 20,000

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ 20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John B. Crawford, former CEO

 

2012

 

$ 30,000

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ 30,000

 

 

2011

 

$        —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$ —

 

$        —


There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our Officers and Director other than as described herein.


- 24 -



OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of February 28, 2013.


 

 

OPTION AWARDS

 

STOCK AWARDS

Name

 

Number of
Securities
Underlying
Unexercised
Option (#)
Exercisable

 

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable

 

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)

 

Option
Exercise
Price ($)

 

Option
Expiration
Date

 

Number of
Shares or
Units of
Stock That
Have Not
Vested (#)

 

Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)

 

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)

 

Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patrick Brown

 

 

 

 

 

 

 

 

 

Chet Gutowsky

 

 

 

 

 

 

 

 

 

John B. Crawford

 

 

 

 

 

 

 

 

 


There were no grants of stock options since inception to the date of this disclosure.


We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.


The Company has not adopted any stock option plans. We have no plans to adopt a stock option plan, but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board (the “Committee”). The committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted. We may develop an incentive based stock option plan for our officers and directors and may reserve up to 10% of our outstanding shares of common stock for that purpose.


OPTIONS GRANTS DURING THE LAST FISCAL YEAR / STOCK OPTION PLANS


We do not currently have a stock option plan in favor of any director, officer, consultant or employee of our company. No individual grants of stock options, whether or not in tandem with stock appreciation rights (known as SARs) or freestanding SARs have been made to our Sole Director and Officer since our inception; accordingly, no stock options have been granted or exercised by our Sole Director and Officer since we were founded.


AGGREGATED OPTIONS EXERCISES IN LAST FISCAL YEAR


No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to our sole Officer and Director since our inception; accordingly, no stock options have been granted or exercised by our sole Officer and Director since we were founded.


LONG-TERM INCENTIVE PLANS AND AWARDS


We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. No individual grants or agreements regarding future payouts under non-stock price-based plans have been made to our sole Officer and Director or any employee or consultant since our inception; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or exercised by our Sole Director and Officer or employees or consultants since we were founded.


- 25 -



COMPENSATION OF DIRECTORS


Our sole Officer and Director is compensated at the rate of $5,000 per month. He is reimbursed for reasonable out-of-pocket expenses incurred.


There are no arrangements pursuant to which our sole Officer and Director is or will be compensated in the future for any services provided as a Director.


We do not have any agreements for compensating our Directors for their services in their capacity as Directors, although such Directors are expected in the future to receive compensation for their services.


EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL ARRANGEMENTS


There are no compensation plans or arrangements, including payments to be made by us, with respect to Mr. Brown that would result from his resignation, retirement or any other termination. There are no arrangements for Directors, Officers or Employees that would result from a change-in-control.


DIRECTOR COMPENSATION


The table below summarizes all compensation awarded to, earned by, or paid to our sole Officer and Director for all services rendered in all capacities to us for the year ended February 28, 2013.


DIRECTOR COMPENSATION


Name

 

Fees Earned
or Paid in Cash
($)

 

Stock
Awards
($)

 

Option
Awards
($)

 

Non-Equity
Incentive Plan
Compensation
($)

 

Non-Qualified
Deferred
Compensation
Earnings
($)

 

All Other
Compensation
($)

 

Total
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patrick Brown

 

0

 

0

 

0

 

0

 

0

 

0

 

0

Chet Gutowsky

 

0

 

0

 

0

 

0

 

0

 

0

 

0

John B. Crawford

 

0

 

0

 

0

 

0

 

0

 

0

 

0


At this time, we have not entered into any employment agreements with our sole Officer and Director. If there is sufficient cash flow available from our future operations, we may enter into employment agreements with our sole Officer and Director or future key staff members.


Certain Relationships and Related Transactions, and Director Independence


DIRECTOR INDEPENDENCE


We do not currently have any independent directors and we do not anticipate appointing additional directors in the foreseeable future. If we engage further directors and officers, however, we plan to develop a definition of independence and scrutinize our Board of Directors with regard to this definition.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.


The following table sets forth certain information as of May 29, 2013, with respect to the beneficial ownership of shares of the Company’s common stock by (i) each person known to us who owns beneficially more than 5% of the outstanding shares of the Company’s common stock, (ii) each of our Directors, (iii) each of our Executive Officers, and (iv) all of our Executive Officers and Directors as a group. Unless otherwise indicated, each stockholder has sole voting and investment power with respect to the shares shown. As of May 31, 2012, there were 18,500,000 shares of the Company’s common stock issued and outstanding.


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Name and address of beneficial owner

 

Relationship to
Registrant

 

Number of Shares of
Common Stock

 

Percentage of
Common Stock (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder

 

 

9,000,000

 

 

48.6

%

 

 

 

 

 

 

 

 

 

 

Patrick Brown

 

Sole Director and CEO

 

 

-nil-

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

All Officers and Directors as a group (total of 1)

 

 

 

 

-nil-

 

 

0.0

%


 

(1)

Under Rule 13d-3 promulgated under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on March 31, 2011.


Item 13. Certain Relationships and Related Transactions, and Director Independence.


Director Independence


We do not currently have any independent directors and we do not anticipate appointing additional directors in the foreseeable future. If we engage further directors and officers, however, we plan to develop a definition of independence and scrutinize our Board of Directors with regard to this definition.


Item 14. Fees and Services.


The following is a summary of the fees billed to the Company by its independent accountants, Peter Messineo, CPA and DKM Certified Public Accountants, for the years ended February 28, 2013 and February 29, 2012:


Fee Category

 

2013

 

2012

 

 

 

 

 

 

Audit Fees (paid to Peter Messineo, CPA)

 

$

5,900

 

$

2,500

 

 

 

 

 

 

 

Audit Fees (paid to DKM Certified Public Accountants)

 

 

1,500

 

 

 

 

 

 

 

 

 

Audit-Related Fees (1)

 

 

 

 

 

 

 

 

 

 

 

Tax Fees (2)

 

 

 

 

 

 

 

 

 

 

 

All Other Fees (3)

 

 

 

 

 

 

 

 

 

 

 

Total Fees

 

$

7,400

 

$

2,500


Notes to the Accountants Fees Table:


(1)

Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”

 

 

(2)

Consists of fees for professional services rendered by our principal accountants for tax related services.

 

 

(3)

Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees” above.


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As part of its responsibility for oversight of the independent registered public accountants, the Board has established a pre-approval policy for engaging audit and permitted non-audit services provided by our independent registered public accountants. In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Board. All of the services provided by Peter Messineo, CPA described above were approved by our Board.


The Company’s principal accountant did not engage any other persons or firms other than the principal accountant’s full-time, permanent employees.


Part IV


Item 15. Exhibits and Financial Statement Schedules.


Exhibit Number Description


2.1

Asset Purchase Agreement, dated as of March 25, 2011, by and among Crawford Mobile Installation Corporation and Crawford Mobile Install (sole proprietorship). (2)

 

 

3.1

Articles of Incorporation of On The Move Systems Corporation (1)

 

 

3.2

Bylaws of On The Move Systems Corporation (1)

 

 

3.3

Articles of Incorporation of Crawford Mobile Installation Corporation (2)

 

 

3.4

Bylaws of Crawford Mobile Installation Corporation (2)

 

 

10.1

Convertible Note from On the Move Systems Corporation to Global Equities Limited (2)

 

 

10.2

Note from Crawford Mobile Installation to John Crawford (2)

 

 

10.3

Note from Crawford Mobile Install to Greg Crawford dated September 28, 2010 (2)

 

 

10.4

Note from Crawford Mobile Install to Greg Crawford dated February 11, 2011 (2)

 

 

23.1

Consent of Independent Registered Public Accounting Firm from Peter Messineo, CPA dated March 28, 2011 (2)

 

 

31.1 *

Section 302 Certification

 

 

32.1 *

Section 906 Certification

 

 

101 **

XBRL Interactive Data


* Filed Herewith


** To be submitted by amendment


(1) Incorporated by reference to the comparable exhibit filed with our Registration Statement on Form S-1


(2) Incorporated by reference to the Form 8-K filed on March 28, 2011


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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: June 19, 2014

On The Move Systems Corp.

 

 

 

 

 

By: /s/ Robert Wilson

 

 

Robert Wilson

 

 

President

 

 

Chief Executive Officer

 

 

Chief Financial Officer

 

 

Principal Accounting Officer

 

 

Treasurer and Director

 


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