UNITED STATES
 SECURITIES
& EXCHANGE COMMISSION
 Washington,
D.C. 20549
  
 FORM
10-KSB
 
  x       ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For
the fiscal year ended December 31, 2007.
 
 o       TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For
the transition period from _______To ______.
 
 Commission
file number 333-137098
 
 IMMS,
Inc.
 (Name of
small business issuer in its charter)
 
 Nevada
              
              87-0540713(State or
      other jurisdiction
                of incorporation or
      organization)
              
              (I.R.S. Employer
                Identification
      No.)
  660
Newport Center Drive Ste. 720
 Newport
Beach CA 92660
 (Address
of principal executive offices and Zip Code)
  (949) 721-1725
 (Issuer’s
telephone number, including area code)
  Securities
registered pursuant to Section 12(b) of the Act:
  Title of each
      class
              
              Name
      of each exchange on which registered
  
 Securities
registered pursuant to Section 12(g) of the Act:  None
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 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
xNo
o
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. x
  State
issuer’s revenues for its most recent fiscal year:  $13,943
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes oNo x
  State the
aggregate market value of voting stock held by non-affiliates computed by
reference to the price at which the common equity was sold, or the average bid
and asked price of such common equity, as of a specified date within the past 60
days. $763,125 ($0.25 per share as of March 1, 2008).
  State the
number of shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date.
  Common
Stock, $.001 par value 8,482,320 shares outstanding as of March 1,
2008
 
 DOCUMENTS
INCORPORATED BY REFERENCE
  None.
  Transitional Small Business
Disclosure Format (check one): Yes oNox
  
  TABLE OF
CONTENTS
 
 PagePART
      IITEM
      1.
              
              DESCRIPTION
      OF BUSINESS.
              
              1ITEM
      2
              
              PROPERTY
              
              6ITEM
      3.
              
              LEGAL
      PROCEEDINGS.
              
              6ITEM
      4.
              
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS.
              
              6PART
      IIITEM
      5.
              
              MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
              
              6ITEM
      6.
              
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
              
              7ITEM
      7.
              
              FINANCIAL
      STATEMENTS.
              
              17ITEM
      8.
              
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.
              
              19ITEM
      8A(T).
              
              CONTROLS
      AND PROCEDURES.
              
              19ITEM
      8B.
              
              OTHER
      INFORMATION.
              
              19PART
      IIIITEM
      9.
              
              DIDIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT.
              
              19ITEM
      10.
              
              EXECUTIVE
      COMPENSATION.
              
              21ITEM
      11.
              
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
              
              22ITEM
      12.
              
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.
              
              23ITEM
      13
              
              EXHIBITS
              
              24ITEM
      14.
              
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.
              
              25SIGNATURES
              
              
              
              26
 
  i
  PART
I
 
 ITEM
1  DESCRIPTION OF BUSINESS
 
 Background
 
 Through
December 31, 2005, we did business under the name “O’Connell Calvin
Motorsports”.  As of January 1, 2006 we commenced doing business as IMMS,
Inc.  Our goal is to control, manage and market a professional multi-car
motorsports operation that will participate primarily in NASCAR (the National
Association for Stock Car Auto Racing) sanctioned events and to utilize our
association with NASCAR to provide marketing and brand
awareness   services to clients interested in using our
race equipment to market their products or services. Additionally, we
will seek to attend other events held by other sanctioning bodies that we
believe will compliment our efforts with NASCAR.
  In 2007
we sold our remaining 2 racecars.  We currently do not own any race
cars.  Our current intention is to employ racecars owned by others,
pursuant to leasing or other arrangements, for racing or promotional
purposes.. To participate in NASCAR sanctioned races, the cars we will use and
drivers we utilize must meet NASCAR qualifications.
 
 NASCAR
Qualifications
  NASCAR
mandates, manages and monitors the qualifications of participants at every
NASCAR sanctioned event. In addition to filing ownership forms with NASCAR, to
participate in a NASCAR sanctioned event, each car must be driven by a driver
who has motorsports experience and all cars must undergo a NASCAR technical
inspection. Prior to qualifying at each race, all of the participating cars must
undergo a pre-race technical inspection by the NASCAR officials. A number of
race cars also will be selected to undergo a further technical inspection at the
conclusion of the race to ensure the selected cars participated within all of
the NASCAR technical guidelines during the race. NASCAR specifications exist for
the entire race car (including aerodynamic elements such as length of spoilers
and air dams, engine characteristics, fuel, chassis setup, shocks, tires, etc.)
and typically vary by manufacturer (such as Ford, General Motors, Dodge and
Toyota). These specifications can change between races as NASCAR technical
officials attempt to maintain equality of competition between race teams and
manufacturers. Teams, drivers and owners that are caught violating NASCAR
guidelines typically receive penalties such as  fines, loss of points
gained unfairly, and suspensions from future NASCAR sanctioned
events.
  After
passing the NASCAR technical inspection, a car has one attempt to achieve one of
the top 36 qualifying speeds of all the cars in order to qualify for an event.
The fastest qualifying speed is awarded the pole position for the respective
race. The pole position starts on the inside of the front row and leads the rest
of the qualifying field to the “green flag” indicating the beginning of each
race. Drivers and team owners covet the pole position due to the notoriety
received by the respective pole winner sponsors.
  After the
pole position, the next 35 race cars earn their starting spots according to the
fastest qualifying speeds.
  NASCAR’s
Strategic Plan
 
 According
to Wikipedia (http://en.wikipedia.org/wiki/NASCAR)
NASCAR has grown to become the second most popular professional sport in terms
of television ratings inside the U.S., ranking behind only the National Football
League. Internationally, NASCAR races are broadcast in over 150
countries. It holds 17 of the top 20 attended sporting events in the U.S.1,
and has 75 million fans who purchase over $2 billion in annual licensed product
sales. These fans are considered the most brand-loyal in all of sports, and as a
result, Fortune
500 companies sponsor NASCAR more than any other sport.
 
 Recently,
NASCAR revised its strategic plan in its Sprint Cup and Nationwide Series
national schedules for the western region of the United States, by adding
additional races in California and Arizona.  These changes, we
believe, were to the detriment of several established and coveted east coast
NASCAR racing venues, and signaled a decisive change in geographical focus of
stock car racing, led by NASCAR. This change in strategy by NASCAR was the
primary factor in our decision to continue to initially concentrate our racing,
relationships and marketing focus on the Western Region of the United States,
primarily in California.
 
 The ASC
Series conducts races at nationally renowned tracks such as: California
Speedway, in Fontana, California, Infineon Speedway in Sonoma, California,
Phoenix International, in Phoenix Arizona. Willow Springs in Central California,
Portland International in Portland Oregon and Thunderhill in Sacramento,
California. The ASC Series typically draws the most spectator attendance of any
of the NASA events.
  1
  Company
History
  In 2002,
Kevin P. O’Connell, CEO, and Scott Calvin commenced working together under the
Company’s auspices to participate in NASCAR’s “spec” truck racing at Irwindale
Speedway in Irwindale California. Prior to 2002, Mr. O’Connell had trained and
raced as a driver with Skip Barber Racing in California. Mr. O’Connell
participated in the “Formula Dodge” racing series at many renowned tracks, such
as California Speedway in Fontana, Laguna Seca, and Road America, in Wisconsin.
  Our drivers in various stock cars have driven cars in
competition in various late model series events including NASCAR’s Irwindale
Super Late Model series and NASA’s (National Auto Sports Association) American
Stock Car Challenge.   Our drivers currently have competition licenses
to drive in the NASCAR Nationwide Series and Camping World Series, the SCCA and
ASC (American Stock Car Series).
  Mr.
O’Connell was introduced to NASCAR through the Super Truck series at Irwindale
Speedway. The NASCAR Super Truck series involves the racing of “Spec” race
vehicles with fiberglass truck bodies. The series is considered part of a
“Ladder” system of NASCAR, in which teams and drivers gain operational and
driving experience as well as exposure to the business of motorpsorts. This
comprehensive experience is essential for progressing into the higher levels of
competition with greater purse awards.
  We
continued to participate in the Super Truck series through the 2003 racing
season when Mr. O’Connell purchased a NASCAR Southwest Tour car. Thereafter, we
purchased and re-built (3) three NASCAR Irwindale “Super Late” models, (2) two
ASC (American Stock Car) road race touring race cars, and (1) one additional car
for use in our marketing and public relations activities.
  Throughout
2004, we participated in the NASCAR Irwindale Speedway Superlate model race
series with Mr. O’Connell as the driver of the #59 super late model and Mr.
Calvin as the primary driver of the #58 super late model. The primary sponsor of
the cars was a regional Southern California Ford dealership.
 
 In 2005,
Mr. Calvin was involved in the day to day business of the IMMS motorsports team
and communicated directly with Mr. O’Connell regarding ongoing operations. He is
not a current shareholder or an employee of our business. Mr. Calvin provided us
with access and use of his mechanics, metal workers, engineers, and “race shop”
warehouse. Additionally, we utilized the storage areas in and around Mr.
Calvin’s facility. Mr Calvin provided these facilities to us in exchange for the
display of his company’s logo on our racecars and on certain apparel worn by the
team principals, crew members and drivers. Additionally, Mr. Calvin permitted to
use our racecars as examples of the quality of his services business. Mr. Calvin
was also the primary driver of our #58 stock car and had driven this car in
competition in specific super late model series including NASCAR’s Irwindale
Super Late Model series and in certain events in the American Stock Car
Challenge road racing series. Mr. Calvin has been licensed to operate stock cars
in racing events in NASCAR sanctioned events. Prior to working with the Company,
Mr. Calvin commenced driving stock cars in the late 1970’s. In 1997, he drove in
the “Ultra Wheels Super Truck” Series and continued driving in the truck series
in Southern and Northern California and Arizona through 2001.
  Additionally
in  2005, the company prepared two (2) of its vehicles to participate
in the American Stock Car Series (ASC) road racing series events in North
America. One of the cars rebuilt was formally a NASCAR Irwindale series circle
track car and the other was a NASCAR Southwest Series Touring car.
  Throughout  2005,
we maintained a two car racing team in the southern California based NASCAR
Irwindale SuperLate Model Series with our #58 and #59 Ford stock cars. This
racing Series begins in February of each year with practice for teams and
drivers and the testing of new equipment and technologies. The race season for
the NASCAR Weekly Racing Series encompasses a race schedule of approximately 20
races from March through October. We completed the entire 2005
season.
 
 Commencing
in the 2006 season, we elected not to enter our racecars in the NASCAR Irwindale
Super Late model series due to the event’s lack of planned television, radio and
related media coverage. In line with our commitment to our sponsors, we made a
strategic change by refocusing our efforts to participating in road racing
events, specifically ASC events
  2
  In the
first quarter of 2006, we focused our resources on reconstructing and rebuilding
our super late model stockcars so that they could be sold to other teams and
owners interested in participating in NASCAR “circle track”
events.  Also in 2006, we sold two of our Super Late model racecars to
these teams. In addition, we have completed the modification and conversion of
another of our stockcars into an ASC road race car.
 
 In 2007,
we sold two racecars to raise operating monies. We do not intend to compete in
the NASCAR Super Late Models (Oval) series in the foreseeable future and will
instead focus on competing in road racing events sanctioned by NASCAR and
NASA/ASC.
  We did
not participate in any ASC races in 2007. We did enter and compete in three
NASCAR West races in 2007.  These races were Infineon Raceway in Sonoma,
California on June 23, 2007, , at Miller Motorsports Park in Salt Lake City,
Utah on July 14th, 2007 and at California Speedway on August 11th, 2007.
 These races had monetary purses that ranged from $10,000 for first place
to $1,200 for 40th place.  For the races mentioned above, we accepted an
arrangement where we provided a driver  for a
contingent  fee.  The fee was to be based  upon
100% of the  purse earned in the race. If we did not earn a purse
( by finishing among the first 40 competitors, we did not earn any
fees.
 
 To
compete in racing events, we “rent” a car for each race.  The fee to rent a
racecar can vary between $3,500 to $15,000 per race event and can be paid in
cash, traded for services or be paid for by a sponsoring company. The amount of
a leasing fee can vary depending upon the length of the race event and the
technology of the racecars. We have the right to apply sponsor’s logos to the
racecars we lease. We have identified multiple sources of racecars available to
us for lease.
  Road
racing is fundamentally different from the circle track NASCAR series we have
recently competed in. It requires a driver and team to be able to mechanically
re-engineer a stockcar designed to make left hand turns at a high rates of
speed.  A road race version of a stock car must be able to turn left and
right, slow quickly to accommodate various degrees of banking, and slow speed
multi apex corners.
  For the
balance of 2007, we attempted to enter and compete in one or more of the then
named NASCAR Busch Series road races at Watkins Glen, New York, Mexico City,
Mexico and Montreal, Canada. We did not enter an event in the Busch series in
2007 due to lack of capital and therefore did not generate any revenue related
to this series for the year ended December 31, 2007.
 
 In 2008,
we intend to participate in both the NASCAR Camping World Series and the
American Stock Car Series (ASC) in selected road racing series. 
Additionally, with the required budget we will enter races in the international
NASCAR road racing series’ known as the “Nationwide Series.”  The NASCAR
Camping World Series is NASCAR’s premier regional touring series and focuses
primary on the west coast.  It has televised coverage for all of the series
races and is the preliminary step in NASCAR’s ladder system before a team enters
the international road racing series. The Nationwide Series is the second
largest international touring series of NASCAR. Each race in the Nationwide
Series is nationally televised on major networks and showcases some of North
America’s most celebrated drivers.
  We are
currently focused on delivering value to our sponsors through the NASCAR and ASC
road racing series.
  We
believe that our business platform will attract sponsors that have brands that
they wish to expand their brand awareness through exposure to consumers that
follow motorsports. In an effort to attract sponsor revenue, we have promoted
our racecars as a marketing tool by carrying the logos of BASF, Mothers Polishes
and Waxes, Dragon Optical, Sparco USA, Arnett Designs, Microfiber.com, HPC
Coatings, Taleo Grill and General Environmental Management, Inc. We did not
derive any revenue from these companies.  In some situations a nominal
amount of the sponsor’s products was given in trade.
  3
  Business
Strategy
  Sponsorship
  Presently,
our largest source of potential revenue is from the “sponsorship” of our race
cars. There are four levels of sponsorship available to our clients: Focus
Sponsor; Primary Sponsor; Associate Sponsor; and In-kind sponsor.
  Focus
Sponsor
  A Focus
Sponsor will have the largest sponsor’s logo appearing on a race car and the car
will be named after the Focus Sponsor, e.g., “the #59 [Sponsoring Company]
Ford.” The logo will generally cover 80% of the available advertising space on
the car. The car will be referred to in all media coverage as the Focus
Sponsor’s car. We estimate that the fee for being a Focus Sponsor will be
$500,000 per year and may vary depending on the series
contemplated.
  Primary
Sponsor
  A Primary
Sponsor will have the use of approximately 10% of the available advertising
space on the race car. This is generally the rear bumper and lower rear quarter
panels. The fee for a Primary Sponsor will be $100,000 per year and may vary
depending on the series contemplated.
  Associate
Sponsor
  An
Associate Sponsor will have the use of approximately 5% of the available
advertising space on the race car. This is generally the rear deck lid, the
lower rear quarter panels and in smaller size print than the Primary Sponsor.
The fee for an Associate Sponsor will be approximately $50,000 per
year.
  In-kind
Sponsor
  An
In-kind Sponsor has use of the remaining 5% of the available advertising space.
This is the lower rocker panel and the door-posts. In-kind Sponsors provide
supplies, part of race purse moneys, and incentive fees. An “In-Kind” sponsor
provides services or goods to us in return for displaying the in-kind sponsor’s
logo on our racecars. The In Kind sponsorship fees are based upon the value of
the product or service that may be provided to us. For example, a shock absorber
manufacturer may contribute an amount of money to a racing purse in return for
all of the participating racecars carrying their logo, or a tire company may
provide tires. We believe that the value of goods or services that may be
provided may become greater, if and when our racecars perform well in televised
events. However, as of the date of this Prospectus, we do not expect to obtain
anything but de minimus revenue from In-Kind sponsors.
  Potential
sponsor clients are regional, national, and international companies with an
interest in targeted promotion and marketing in California and the West coast.
To date, the company has built a racing platform that enables it to compete in
two highly followed types of racing, which include oval track and road racing.
Fans and loyal consumers that follow stock racing nationally and regionally, and
that represent the advertising demographics embraced by NASCAR attend road
racing events involving stock cars.
  Show
Car and Special Events
  Our Show
Car marketing program consists of offering a potential client the ability to
have one of our exhibition cars, (a “Showcar”) appear, painted with the client’s
logo, at a client’s function or media event as an attraction. Our Showcars are
fully equipped and sanctioned racing cars. Appearing with the Showcar will be a
driver or crew chief for the Showcar to provide answers to questions that
attendees at the event might have. Clients pay a “Preparation Fee” to paint and
deliver the Showcar to the sight of the event and also pay a per diem fee for
each day the Showcar is at the event. The per diem fee includes our staffing for
the Showcar while at the event. The estimated “Preparation Fee” is $1,500 per
car plus any additional lettering and graphics costs. The “Per Diem” fees range
from $250.00 to $500.00 per day.
  4
  We also,
through independent contactors, offer event planning and catering services to
our clients. Prices for these services vary in accordance with the scope of the
event.
  Race
Purse Winnings
  As the
sport has grown, NASCAR has become a nationally recognized sporting event that
is seen by millions of fans. As a result, winning purses have also grown.
However, the typical winning purse at the racing events we plan to compete in,
is less than $ 10,000. While we intend to compete and attempt to win each race
we enter, we do not anticipate that purse winnings will contribute substantially
to our revenue.
  Facilities and
Maintenance
  Maintenance
and race set up is a critical factor in motor racing. Mr. O’Connell manages the
technical staff of independent contractors to keep the competition and show cars
prepped and ready for racing and marketing events as scheduled.  Depending
on the agreement, costs for maintenance on competition cars are budgeted on a
per race and per event basis and include crash damage, motor refresh costs,
tires, fuel and certain scheduled upkeep. Often, the effectiveness of the team
in competition is a function of the preparation of the equipment from the
primary race facility. Our racing and promotional cars are managed and
maintained from a facility owned by Mr. O’Connell, located in Riverside,
California.
  Marketing
  We have
made, and intend to continue, direct sales of sponsorships and marketing
services through our management and independent contractor sales staff. We
intend to hire dedicated marketing staff when and if management determines that
such staffing is necessary.
 
 Competition
 
 We
principally compete with other motorsports teams and advertising and public
relations companies that are much larger, better known, more well established
and have greater financial resources than us. We do not consider us to be a
factor in the motorsports industry. We compete for sponsor dollars with other
sports such as football, baseball, basketball, hockey, tennis and golf and with
other entertainment and recreational activities. While we believe motorsports,
particularly NASCAR, has been one of the most popular entertainment sports in
the country in recent years, there can be no assurance that such growth rates
will be maintained. In the event that fan interest declines, motorsports might
not be as attractive to the television industry, which could have an adverse
effect on our operations.
  There can
be no assurance that our vehicles will be competitive or qualify for each, or
any, ASC/ NASCAR sanctioned event entered. If we are not as successful
competitively, we could have a more difficult time attracting and maintaining
sponsors, drivers and crews which in turn could impact our ability to attract
and maintain sponsorship. We will compete with well-established teams and there
can be no assurance that we will be able to create or maintain a competitive
position. In addition, there are relatively low barriers to entry into these
markets and we expect to continue to face competition from new entrants into
these same markets. There can be no assurance that we will be able to compete
successfully in these markets.
  Employees
  As of
February 29, 2008 we had no full-time employees. Our only employees consist of
four management personnel, all of whom devote 25% or less of their time to our
business affairs. We intend to hire full time employees when and if we have the
financial resources to do so. Until such time as we are in a position to hire
full time employees, we will hire independent contractors to perform work for us
on an as needed basis. None of our management employees are represented by a
labor union or a collective bargaining agreement. We consider our relations with
our management employees to be good.
  5
 
 ITEM 2.DESCRIPTION OF
PROPERTY.
  We currently utilize office space in Newport Beach, California
provided by Kevin O’Connell at no charge to the Company.
 
 ITEM 3.LEGAL
PROCEEDINGS.
 
 None
 
 ITEM 4. SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS.
 
 Not
applicable.
 
  PART II
 
 ITEM 5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.
 
 Our
authorized capital stock consists of 190,000,000 shares of common stock, $0.001
par value; 10,000,000 shares of preferred stock, $0.001 par value
including;  There are no shares of preferred stock issued and
outstanding.
 
 Market
Information
 
 Prior to
September, 2007, there was no public market for our common stock. In conjunction
with our initial public offering, our common stock was accepted for listing on
the OTC Bulletin Board under the trading symbol "IMSZ".   As at
March 1, 2008, there were 8,482,320 shares of common stock outstanding and no
shares of any class of preferred stock outstanding.
  High And Low Sale Prices Of Our
Common Stock
  The
following table sets forth the high and low bid information of our common stock,
as quoted on the Over The Counter Bulletin Board (which quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions) for each quarter during the period January 1,
2006 through December 31, 2007:
 
 Calendar
      Quarter Ended
              
              Low
              
              
              HighSeptember
      30, 2007
              
              $
              .25
              
              
              $
              .25December
      31, 2007
              
              $
              .25
              
              
              $
              .25March
      31, 2008 (through March 1, 2008)
              
              $
              .25
              
              
              $
              .25
  The last
reported price of our common stock on the Over-The-Counter Bulletin Board on
March 1, 2008 was $0.25 per share.
  6
 
 Holders
 
 As of
February 1, 2008, there were approximately 39 stockholders of record holding our
outstanding common stock.
 
 Dividends
 
 We have
never declared or paid any cash dividends on our common stock. Our Board of
Directors presently, and for the foreseeable future, intends to retain all of
our earnings for use in our business. The declaration and payment of cash
dividends in the future will be at the discretion of our Board and will depend
upon a number of factors, including, among others, our future earnings,
operations, funding requirements, restrictions under our credit facility, our
general financial condition and any other factors that our board considers
important. Investors should not purchase our common stock with the expectation
of receiving cash dividends.
 
 Recent
Sales of Unregistered Securities; Use of Proceeds
 
 There
were no sales of unregistered securities in years ended December 31, 2007 and
2006.
 
 Purchases
of Equity Securities by the Small Business Issuer and Affiliated
Purchasers
 
 None.
 
 Equity Compensation Plan
Information
  We have a
2005 Stock Incentive Plan pursuant to which 2 million shares of common stock are
reserved for issuance.  Through March 1, 2008, we have not issued any
stock or stock options pursuant to the Plan.
 
 Under the
2005 Plan, incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock, restricted stock units and deferred stock
units may be issued to persons selected by the administrators of the Plan from a
class of employees, officers and non-employee directors and other service
providers who render valuable contributions to us. Option awards will be
generally granted with an exercise price equal to the market price of our common
stock at the date of grant; those option awards generally vest based on three
years of continuous service and have ten-year contractual terms. Options granted
under the 2005 Plan expire no later than ten years from the date of
grant.
  ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION.
   MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 Overview
  This
10KSB contains forward-looking statements that involve risks and uncertainties.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date that they are made. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
  7
  The
following discussion should be read in conjunction with the consolidated
financial statements and notes thereto included in this prospectus.
  We are a
small motorsports business that has participated primarily the western
United States in NASCAR (the National Association for Stock Car Auto Racing) and
ASC (American Stock Car Series) sanctioned events.  We utilize our racecars
to provide marketing and public relations services to clients desiring to
use our racecars to market their product or service by having our vehicles carry
their logo and having our team represent their company.  We have
conducted limited operations to date.
  Trends
& Outlook
  Revenue;Our revenue is currently derived from Sponsorship clients. In exchange
for “sponsorship” money, our clients place advertisements on our race
cars.
  Long-term,
we cannot predict the growth or decline of our revenues. If certain standards
set by our sponsors are exceeded, or are not met we could increase or decrease
our sponsor revenue. Such standards are agreed upon between the Company and the
sponsor at the inception of the sponsor agreement and are based upon
“performance.”  Performance criteria includes but is not limited to on
racetrack success, hospitality, race event attendance by specific demographics
and overall media coverage.  We believe we satisfy these standards for our
current sponsors.  In the event the company fails to satisfy these
standards, certain sponsors could terminate their relationship with us.  We
currently maintain these standards by interacting with our sponsors on a regular
basis and updating their expectations of us.
  At
present, we are competing in the NASCAR Grand National West Series and intend to
compete in the NASCAR Nationwide Series where we will enter select road racing
events.  We believe these series provide a broader market and expanded
media for our potential sponsors.  Additionally, we will maintain our
select racing calendar in the American Stock Car Series (ASC) road racing
series.  All oval track racing has been terminated.
  Operating
Expenses;Our Operating expenses are currently attributed to the daily
operations of the company. These expenses include, but are not limited to,
materials and parts, consulting, transportation, marketing, travel and
administrative costs.These costs can vary
depending on fuel costs, distances, and cost of advertising or changes in
consulting fees.
  Significant
Accounting Policies
  Our
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Note 1 of the Notes to Consolidated Financial Statements describes the
significant accounting policies used in the preparation of the consolidated
financial statements. Certain of these significant accounting policies are
considered to be critical accounting policies, as defined below.
  A
critical accounting policy is defined as one that is both material to the
presentation of our financial statements and requires management to make
difficult, subjective or complex judgments that could have a material effect on
our financial condition and results of operations. Specifically, critical
accounting estimates have the following attributes: 1) we are required to
make assumptions about matters that are highly uncertain at the time of the
estimate; and 2) different estimates we could reasonably have used, or
changes in the estimate that are reasonably likely to occur, would have a
material effect on our financial condition or results of
operations.
  8
  Estimates
and assumptions about future events and their effects cannot be determined with
certainty. We base our estimates on historical experience and on various other
assumptions believed to be applicable and reasonable under the circumstances.
These estimates may change as new events occur, as additional information is
obtained and as our operating environment changes. These changes have
historically been minor and have been included in the consolidated financial
statements as soon as they became known. Based on a critical assessment of our
accounting policies and the underlying judgments and uncertainties affecting the
application of those policies, management believes that our consolidated
financial statements are fairly stated in accordance with accounting principles
generally accepted in the United States, and present a meaningful presentation
of our financial condition and results of operations. We believe the following
critical accounting policies reflect our more significant estimates and
assumptions used in the preparation of our consolidated financial
statements:
  Use of
Estimates--These financial statements have been prepared in accordance
with accounting principles generally accepted in the United States and,
accordingly, require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Specifically, our management has estimated the expected
economic life and value of our licensed technology, our net operating loss for
tax purposes and our stock, option and warrant expenses related to compensation
to employees and directors, consultants and investment banks. Actual results
could differ from those estimates.
  Cash and
Equivalents--We maintain our cash in bank deposit accounts, which at
times, may exceed federally insured limits. We have not experienced any losses
in such account.
  Revenue
Recognition--Our revenue, to date, has been derived from advertising,
marketing sponsors and from race purses. Revenue is recognized on an accrual
basis as earned under contract terms. In kind sponsorship fees are based upon
the value of the product or service that may be provided to us. The fair value
of our use of the Calvin garage space and the fair value of the advertising
provided to Calvin by the Company was determined by an agreement between the
parties that was based upon what each party would be willing to pay or receive
for the consideration provided. The garage structure is on residential property
with limited amenities, not lending itself to comparison with commercial market
comparables. Therefore, the parties estimated value based on an agreed amount
that they would be willing to pay or receive.
  Intangible and
Long-Lived Assets--We follow SFAS No. 144, "Accounting for
Impairment of Disposal of Long-Lived Assets," which established a "primary
asset" approach to determine the cash flow estimation period for a group of
assets and liabilities that represents the unit of accounting for a long lived
asset to be held and used. Long-lived assets to be held and used are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The carrying amount of a
long-lived asset is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the
asset. Long-lived assets to be disposed of are reported at the lower of carrying
amount or fair value less cost to sell. During the period ended
December 31, 2006 no impairment losses were recognized.
  Stock Based
Compensation--We recognize expenses for stock-based compensation
arrangements in accordance with provisions of Accounting Principles Board (APB)
Opinion No. 25, “Accounting
for Stock Issued to Employees,” and related Interpretations. Accordingly,
compensation cost is recognized for the excess of the estimated fair value of
the stock at the grant date over the exercise price, if any. The Company
accounts for equity instruments issued to non-employees in accordance with EITF
96-18,“Accounting for Equity
Instruments that are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling Goods or Services.” Accordingly, the estimated
fair value of the equity instrument is recorded on the earlier of the
performance commitment date or the date the services required are
completed.
  9
  Beginning
in 2006, we adopted SFAS No. 123R “Share Based Payment” which superseded APB
Opinion No. 25. SFAS No. 123R requires compensation costs related to share-based
payment transactions to be recognized in the financial statements. We do not
believe the adoption of SFAS No. 123R will have a material impact on our
financial statements.
  RESULTS
OF OPERATIONS
  Result
of Operations for the Years ending December 31, 2006 and 2007
  Revenues
 
 Total
revenues were $13,943 for the year ended December 31, 2007, representing an
increase of $1,943 or 16% compared to $12,000 for the year ended December 31,
2006. The increase in revenue is as a result of more monetary purses received at
higher levels of NASCAR racing during the racing season and consulting fees
earned.
  Cost
of Revenues
  There was
no cost of revenues in either the twelve months ending December 31, 2007 or the
twelve months ending December 31, 2006.
  Operating
Expenses
  Operating
expenses for the year ended December 31, 2007 were $136,064 or 976% of
revenue as compared to $216,526 or 1,804% of revenue for the same period in
2006.  The decrease in the operating expenses for 2007 were due to less
races entered and attended.
  Depreciation
and Amortization
  Depreciation
and amortization expenses for the twelve months ended December 31, 2007 were
$59,358, or 426% of revenue, as compared to $69,272, or 577% of revenue for the
same period in 2006. The decrease in expenses is related to the disposition of
certain racecar assets throughout the year in 2007.
  Interest
Expense
 
 Interest
expense for the twelve months ended December 31, 2007 was $19,307, or 172% of
revenue, as compared to $17,152, or 170% of revenue for the same period in 2006.
The slight increase in interest expense is due to the related party indebtedness
of the company for $180,932 in 2007.
  Other
Non-operating Income
  The
Company had $125 in non-operating income in the twelve months ending December
31, 2007 and $301 for the corresponding period in 2006.
  Net
Loss
  The net
loss for the twelve months ended December 31, 2007 was $114,187 or approximately
819% of revenue as compared to a loss of $202,627 or 1,689% of revenue for the
same period in 2006. The decrease in loss is attributable to the decrease in the
number of racing events entered and attended in 2007.
  10
  Year
Ended December 31, 2007 as Compared to the Year Ended December 31,
2006
  In 2006,
the Company did not participate in the NASCAR Irwindale Super Late Model oval
track series as it had in the previous year.  The Company did participate
in several American Stock Car Series (ASC) road racing events at venues such
as Infineon, California Speedway and Thunderhill Raceway in Northern
California.  The increased focus in the American Stock Car series
(ASC) road racing provided the Company with opportunities to gain experience in
stock car road racing at various high profile race tracks.  In 2007 the
Company participated in the NASCAR West series races at Infineon Raceway in
Sonoma, California, Miller Motorsports Park in Salt Lake City, Utah, and
California Speedway in Fontana, California.  The race at Infineon Raceway
was televised on TNT nationally.   Additionally, the team also
participated in American Stock Car races at Willow Springs and conducted several
all day tests at Infineon Raceway and Buttonwillow Raceway in central
California.
  Liquidity
and Capital Resources
  Cash
  Our
primary source of liquidity is cash provided by financing activities. Net cash
used in operations for the year ended December 31, 2007 was $36,466 as compared
to $148,831 for the same period in 2006.
 
 Liquidity
  The
accompanying consolidated financial statements have been prepared assuming that
the company will continue as a going concern. The Company incurred a net loss of
$114,187 and utilized cash in operating activities of $36,466 during the twelve
months ended December 31, 2007. These matters raise substantial doubt about the
Company’s ability to continue as a going concern.
  Management
is continuing to raise capital through the issuance of debt and equity and
believes it will be able to raise sufficient capital over the next twelve months
to finance operations. However, there can be no assurances that the Company will
be successful in this regard or will be able to eliminate its operating losses.
The accompanying financial statements do not contain any adjustments which may
be required as a result of this uncertainty.
  As of
December 31, 2007, and for the year ending December 31st, 2008,
management estimates that the cost of operating the business will require
additional capital of up to One Hundred Thousand dollars
($100,000) consisting of: $5,000 for registration and licenses required for
entry in select racing events; $10,000 for travel and lodging; $5,000 for
marketing and promotion; $25,000 for legal and accounting; $5,000 for engineers
and consultants; $10,000 for parts, $10,000 for fuels, and tires; $5,000 for
racecar transporter travel; $15,000 for debt service of all Company notes
payable; and $10,000 in miscellaneous expenses.
  We intend
to hold discussions with existing shareholders, new prospective shareholders and
various debt providers in pursuing the capital we need for the upcoming twelve
months of operations.  Additionally, the current Board members may be a
source of capital as well. However, there can be no assurance that we will be
able to raise any additional equity or debt capital.
  The
Company’s capital requirements consist of general working capital needs,
scheduled principal and interest payments on debt, obligations, and capital
expenditures. The Company’s capital resources consist primarily of cash
generated from proceeds through the issuances of common stock.  At December
31st, 2007
the company had cash of approximately $6,472.
  11
  Cash
Flows for the Year Ended December 31, 2007
  Operating
activities for the twelve months ended December 31, 2007 used $36,466 in cash.
The company had no accounts receivable during the period ending December 31,
2007, nor during the corresponding period in 2006.
 
 The
Company also had no trade accounts payable during either period. As at December
31, 2007, the Company had related party payables outstanding of $56,050 and
accrued interest payable of $6,727.
  Stockholder
Matters
  Stockholders’
deficit was $(224,520) on December 31, 2007, or ($0.03) per share outstanding.
During the corresponding period in 2006 Stockholders’ equity was ($110,333) or
($0.01) per share outstanding.
  Recent Accounting Pronouncements
  In
December 2004, the FASB issued SFAS No. 123 (revised 2004),
“Share-Based Payment.” SFAS No. 123R replaced SFAS No. 123 and superseded
Accounting Principles Board Opinion No. 25. SFAS No. 123R requires
compensation costs related to share-based payment transactions to be recognized
in the financial statements. On April 14, 2005, the Securities and Exchange
Commission issued an announcement amending the compliance dates for the FASB's
SFAS 123R that addresses accounting for equity based compensation arrangements.
Under SFAS 123R registrants would have been required to implement the standard
as of the beginning of the first interim or annual period that begins after June
15, 2005. The Commission's new rule will allow companies to implement SFAS 123R
at the beginning of the next fiscal year after June 15, 2005. The Company
adopted SFAS 123R in the first quarter 2006. The adoption of SFAS No. 123R
did not have a material impact on our financial statements.
  In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29” (“SFAS No. 153”). SFAS
No. 153 is based on the principle that exchanges of nonmonetary assets
should be measured based on the fair value of the assets exchanged. APB Opinion
No. 29, “Accounting for Nonmonetary Transactions,” provided an exception to
its basic measurement principle (fair value) for exchanges of similar productive
assets. Under APB Opinion No. 29, an exchange of a productive asset for a
similar productive asset was based on the recorded amount of the asset
relinquished. SFAS No. 153 eliminates this exception and replaces it with
an exception of exchanges of nonmonetary assets that do not have commercial
substance. SFAS No. 153 became effective for our Company as of July 1,
2005. The Company will apply the requirements of SFAS No. 153 on any future
nonmonetary exchange transactions.
  In
March 2005, the FASB issued FASB Interpretation ("FIN") No. 47
"Accounting for Conditional Asset Retirement Obligations--an Interpretation of
FASB Statement No. 143" ("FIN No. 47"). FIN No. 47 clarifies the
timing of liability recognition for legal obligations associated with the
retirement of a tangible long-lived asset when the timing and/or method of
settlement are conditional on a future event. FIN No. 47 is effective for
us no later than December 31, 2005. The adoption of FIN No. 47 did not
have a material impact on our financial condition or results of
operations.
  Note
1.  In May 2005, the FASB issued SFAS
No. 154, “Accounting Changes and Error Corrections, a replacement of APB
No. 20 and FASB Statement No. 3” (“SFAS No. 154”).  SFAS
No. 154 requires retrospective application to prior periods' financial
statements of a voluntary change in accounting principle unless it is
impracticable.  APB Opinion No. 20 “Accounting Changes,” previously
required that most voluntary changes in accounting principle be recognized by
including in net income of the period of the change the cumulative effect of
changing to the new accounting principle.  This statement is effective for
our Company as of January 1, 2006. The adoption of SFAS No. 154 did
not have a material impact on our financial statements.
  12
  RISK
FACTORS
  RISKS
RELATED TO OUR BUSINESS
  An
investment in our securities is extremely risky. You should carefully consider
the following risks, in addition to the other information presented in this
10KSB, before deciding to buy our securities. If any of the following risks
actually materialize, our business and prospects could be seriously harmed and,
as a result, the price and value of our securities could decline and you could
lose all or part of your investment. The risks and uncertainties described below
are intended to be the material risks that are specific to us and to our
industry.
  We
have a limited operating history, with historical losses.
  We have a
short operating history and must be considered in the development stage. We have
no history of earnings or profits and there is no assurance that we will operate
profitably in the future. There is no meaningful historical financial data upon
which to base planned operating expenses. As a result of this limited operating
history, it is difficult to accurately forecast our potential revenue. We have
accumulated a total loss of $1,023,777 from January 1, 2003 through December 31,
2007. We use racecars to market and promote the products and services of sponsor
clients. We contemplate that we will further develop our racing operations into
which we will reinvest a majority of the profits, if any, back into the company.
We have not entered into any definitive arrangements with any sponsors, drivers,
crew chiefs, suppliers, distributors or manufacturers and intend to pursue these
arrangements upon successful completion of this offering. Since inception, the
founders of the Company have made $ 326,250 in contributions to the capital of
the Company.  For the calendar year ending December 31st, 2008,
we estimate that the cost of operating the business will require additional
capital of a minimum of one hundred dollars ($100,000) and there can be no
assurance that any or all of that additional capital will be available to the
Company.
  Our
existing principal stockholders exercise control of our
Company.
  Kevin P.
O’Connell and World In Motion, Inc. will directly or indirectly control
approximately 57% of our issued and outstanding common stock Accordingly, Mr.
O’Connell and World in Motion, Inc., will be able to control the election of
directors and all other matters subject to stockholder votes. This concentration
of ownership may have the effect of delaying or preventing a change in control
of the Company, even if this change in control would benefit
stockholders.
  We
must enter into and maintain a good working relationship with
NASCAR.
  To be
successful, we must create and maintain a good working relationship with
the sanctioning body of our racing events, NASCAR. While we believe we will have
a good working relationship with NASCAR, we have not had any definitive
discussions with NASCAR management and may not be able to establish or maintain
such a relationship. Without a good relationship with NASCAR, NASCAR may at its
sole discretion disallow our team from competing in any or all of their
sanctioned events for an indefinite period of time. We do not have any
contractual relationship with NASCAR and may not be able to enter into licensing
agreements on terms acceptable to us.
  Our
racing operations face competition for marketing and advertising
dollars.
  We
compete for marketing and advertising dollars with other motorsports teams and
with sports such as football, baseball, basketball, hockey, tennis and golf and
with other entertainment and recreational activities. While NASCAR has been one
of the fastest growing sports in the country in recent years, there can be no
assurance that such growth rates will be maintained. In the event that fan
interest declines, NASCAR might not be as attractive to the television industry,
which could have an adverse effect on our operations.
  13
  There can
be no assurance that our team will be competitive or qualify for each, or any,
NASCAR sanctioned event entered. If we are not as successful competitively, we
could have a more difficult time attracting and maintaining sponsors, quality
drivers and crews which in turn could impact our ability to attract marketing
and advertising dollars. We will compete with well-established teams and there
can be no assurance that we will be able to create or maintain a competitive
position.
  The
success of our operations will be dependent upon the success of our racing
teams.
  Our
ability to fully implement our business plan and the success of our operations
will be dependent upon the success of our racing teams. If our racing teams fail
to qualify for races or finish poorly in races on a regular basis, the success
of our operations could be adversely impacted. Teams that fail to qualify do not
generate any substantial purse revenue, and may experience a reduction in fan
interest and/or sponsorship appeal. We do not currently have any written
employment or sponsorship arrangements with drivers or crewmembers.
  We
may incur liability for personal injuries.
  Racing
events can be dangerous to participants and to spectators. We maintain insurance
policies that provide coverage within limits that in our judgment are sufficient
to protect us from material financial loss due to liability for personal
injuries sustained by, or death of, our personnel or spectators in the ordinary
course of our business. Our insurance may not be adequate or available at all
times and in all circumstances. In the event that damages for injuries sustained
by our participants or spectators exceed our liability coverage or the insurance
company denies coverage, our financial condition, results of operations and cash
flows could be adversely affected to the extent claims and associated expenses
exceed insurance recoveries.
  We
may not be able to attract and maintain sponsors as our primary source of
revenues.
  A
professional motorsports racing operation relies principally on three separate,
but related, revenue sources for the funding of racing activities. They are
sponsorship monies, race purse winnings and special race bonus opportunities.
There can be no assurance that we will be able to attract or obtain any or all
of these sources of revenue.
  Since our
racing operation is expected to be primarily funded through sponsorship dollars,
our ability to attract sponsors to fund racing operations will be a significant
factor in our success or failure. Although we have had limited sponsors to date,
we do not have any long term agreements with sponsors and may not be able to
attract any sponsors to fund our teams. We had $13,973 in  revenue for
the year ending December 31st,
2007.  We did not obtain any other sponsors for the year ending
December 31st, 2007 and therefore did not schedule any show car
appearances.
  We
will need additional financing, which may not be available.
  Our
future success will depend on our ability to raise additional funds and our
ability to raise future sponsorship money, which includes attracting sponsors
for our racing teams. No commitments to provide additional funds have been made
by management and no agreements with sponsors have been entered into. Our
ability to arrange financing in the future will depend in part upon the
prevailing capital market conditions, as well as our business performance. There
can be no assurance that we will be successful in our efforts to arrange
additional financing on satisfactory terms. If additional financing is raised by
the issuance of our shares, control of the Company may change and stockholders
may suffer additional dilution. If adequate funds are not available, or are not
available on acceptable terms, we may not be able to take advantage of
opportunities, or otherwise respond to competitive pressures and remain in
business.
  14
  We
are dependent on our key personnel.
  Our
management is currently controlled and operated by Kevin P. O’Connell, CEO,
David A. Rifkin President, and John A. Brunkow, Chief Financial Officer. Our
success will depend in large part upon the continued services of those
individuals. Mr. O’Connell presently devotes only 25% or less of his time to our
business and Messrs. Rifkin, and Brunkow presently devote only 10% of their time
to our business. Notwithstanding, the death or loss of the services of any one
of them, or of any one or more of our other key personnel could have a material
adverse effect on our business, financial condition and results of operations.
We do not have key man life insurance on these individuals. In addition, if one
or more of our key employees resigns to join a competitor or to form a competing
company, the loss of such personnel and any resulting loss of existing or
potential clients to any such competitor could have a material adverse effect on
our business, financial condition and results of operations. In the event of the
loss of any key personnel, there can be no assurance that we will be able to
prevent the unauthorized disclosure or use of our technical knowledge, practices
or procedures by such personnel.
  We
face significant racing competition.
  We
principally compete with other motorsports teams and advertising and public
relations companies. In addition, there are relatively low barriers to entry
into these markets and we expect to continue to face competition from new
entrants into these same markets. There can be no assurance that we will be able
to compete successfully in these markets.
  Our
business revenue generation model is unproven and could fail.
  Our
revenue model is new and evolving, and we cannot be certain that it will be
successful. Our present revenue model is to use our racecars to provide
marketing and public relations services to clients desiring to use our racecars
to market their product or service by having our vehicles promote their brand by
carrying their logo. Our ability to generate revenue depends, among other
things, on our ability to leverage the Company’s expertise in the motorsports
industry. The potential profitability of this business model is unproven for
companies of our size. Accordingly, we cannot assure you that our business model
will be successful or that we can sustain revenue growth or achieve or sustain
profitability. If our business model is not successful we could be forced to
curtail our operations.
  Our auditors have expressed
substantial doubt as to whether our company can continue as a going
concern.
 
 We have
generated only limited revenues since our inception and have incurred
substantial losses. We have negative cash flow of approximately $36,456 for the
year ended December 31, 2007.  As of March 1, 2008 and through
December 31, 2008, our business plans estimate that we  need $100,000
without any new employees and additional capital to fund our operations
through the end of 2008.  There can be no assurance that we will be
able to raise any or all of the $100,000 that we will need. These factors among
others indicate that we may be unable to continue as a going concern,
particularly in the event that we cannot generate sufficient cash flow or raise
sufficient capital to conduct our operations. Our financial statements do not
include any adjustments to the value of our assets or the classification of our
liabilities that might result if we would be unable to continue as a going
concern.
  RISKS
ASSOCIATED WITH OUR COMMON STOCK
  There
is no active trading market for our common stock and if a market for our common
stock does not develop, our investors will be unable to sell their
shares.
  There is
currently a limited trading market for our common stock and such a market may
not be sustained. Our stock is quoted under the symbol IMSZ on the OTC bulletin
board. The OTC Bulletin Board is not a listing service or exchange, but is
instead a dealer quotation service for subscribing members. If our common stock
does not maintain its quotations on the OTC Bulletin Board, then investors may
not be able to resell the shares of our common stock that they have purchased
and may lose all of their investment. The market price of our common stock may
be significantly affected by factors such as actual or anticipated fluctuations
in our operation results, general market conditions and other factors. In
addition, the stock market has from time to time experienced significant price
and volume fluctuations that have particularly affected the market prices for
the shares of developmental stage companies, which may materially adversely
affect the market price of our common stock.
  15
  Because we do not intend to pay any
dividends on our common shares, investors seeking dividend income or liquidity
should not purchase shares in this offering.
  We do not
currently anticipate declaring and paying dividends to our shareholders in the
near future. It is our current intention to apply net earnings, if any, in the
foreseeable future to increasing our working capital. Prospective investors
seeking or needing dividend income or liquidity should, therefore, not purchase
our common stock. There can be no assurance that we will ever have sufficient
earnings to declare and pay dividends to the holders of our shares, and in any
event, a decision to declare and pay dividends is at the sole discretion of our
board of directors, who currently do not intend to pay any dividends on our
common shares for the foreseeable future.
  Sales
of a substantial number of shares of our common stock into the public market by
the selling stockholders may result in significant downward pressure on the
price of our common stock and may affect the ability of our stockholders to
realize any trading price of our common stock when and if a trading market
develops for our common stock.
  Sales of
a substantial number of shares of our common stock in the public market could
cause a reduction in the market price of our common stock. Our
initial  registration statement on Form SB-2 was declared effective on
June 27, 2007. The selling stockholders may be reselling up to 53.6% of the
issued and outstanding shares of our common stock.  As a result of
such registration statement, a substantial number of our shares of common stock
which have been issued may be available for immediate resale, which could have
an adverse effect on the price of our common stock. As a result of any such
decreases in price of our common stock, purchasers who acquire shares from the
selling stockholders may lose some or all of their investment.
  Any
significant downward pressure on the price of our common stock as the selling
stockholders sell the shares of our common stock could encourage short sales by
the selling stockholders or others. Any such short sales could place further
downward pressure on the price of our common stock.
  Our
stock is a penny stock. Trading of our stock may be restricted by the SEC's
penny stock regulations which may limit a stockholder's ability to buy and sell
our stock.
  Our stock
is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9
which generally defines "penny stock" to be any equity security that has a
market price (as defined) less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. Our securities are covered
by the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
  16
 
 ITEM
7  FINANCIAL STATEMENTS
  IMMS,
INC.
 (A
Development Stage Company)
 
 FINANCIAL
STATEMENTS
 
 December
31, 2006 and 2007,
 And
For The Period From January 1, 2003 (Inception)
 Through
December 31, 2007
 
 
 
 
  
 
 
 17
  IMMS,
INC.
 (A
Development Stage Company)
 Financial
Statements
 
 
 
 TABLE
OF CONTENTS
 
 PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  F-1FINANCIAL
      STATEMENTSBalance
      sheets
                  F-2Statements
      of operations
                  F-3Statements
      of stockholders’ equity
                  F-4Statements
      of cash flows
                  F-5Notes
      to financial statements
                  F-6
 
 18
  RONALD R.
CHADWICK, P.C.
 Certified
Public Accountant
 2851
South Parker Road, Suite 720
 Aurora,
Colorado  80014
 Telephone
(303)306-1967
 Fax
(303)306-1944
 
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of
Directors
 IMMS,
Inc.
 Newport
Beach, California
 
 I have
audited the accompanying balance sheets of IMMS, Inc. (a development stage
company)  as of December 31, 2006 and 2007, and the related statements
of operations, stockholders' equity and cash flows for the years ended December
31, 2006 and 2007, and for the period from  January 1, 2003 (inception
of the development stage) through December 31, 2007. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a
reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material  respects, the financial position of IMMS, Inc. as of
December 31, 2006 and 2007, and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2006 and
2007, and for the period from  January 1, 2003 (inception of the
development stage)   through December 31, 2007 in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 5 to the financial
statements the Company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 5. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
   Aurora,
      Colorado
                  
                  
                  /s/ Ronald R.
      Chadwick, P.C.March
      5, 2008
                  
                  
                  RONALD
      R. CHADWICK, P.C.
 F-1
 IMMS,
INC.
 (A
Development Stage Company) BALANCE
SHEETS
 
 Dec.
      31, 2007ASSETSCurrent
      assetsCash
                  
                  $
                  6,472Total current
      assets
                  
                  
                  6,472Fixed
      assets - net
                  
                  
                  93,168Total
      Assets
                  
                  $
                  99,640LIABILITIES
      & STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
                  
                  $
                  28,078Accrued
      payables - related parties
                  
                  
                  56,050Notes
      payable - current
                  
                  
                  52,373Other
      payables
                  
                  
                  6,727Total current
      liabilties
                  
                  
                  143,228Notes
      payable
                  
                  
                  180,932Total
      Liabilities
                  
                  
                  324,160Stockholders'
      EquityPreferred
      stock, $.001 par value;10,000,000
      shares authorized;none
      issued or outstanding
                  
                  
                  -Common
      stock, $.001 par value;190,000,000
      shares authorized;8,482,320
      shares issued andoutstanding
                  
                  
                  8,482Additional
      paid in capital
                  
                  
                  795,210Deficit
      accumulated during thedevelopment
      stage
                  
                  
                  (1,028,212
                  )Total
      Stockholders' Equity
                  
                  
                  (224,520
                  )Total
      Liabilities and Stockholders' Equity
                  
                  $
                  99,640
   The
accompanying notes are an integral part of the financial statements.
  F-2
 IMMS,
INC.
 (A
Development Stage Company) STATEMENTS
OF OPERATIONS
 Period
      FromJan.
      1, 2003Year
      Ended
                  
                  
                  Year
      Ended
                  
                  
                  (Inception)
      ToDec.
      31, 2006
                  
                  
                  Dec.
      31, 2007
                  
                  
                  Dec.
      31, 2007Revenues
      - race winnings
                  
                  $
                  -
                  
                  
                  $
                  4,525
                  
                  
                  $
                  15,867Revenues
      - related party
                  
                  
                  12,000
                  
                  
                  
                  9,418
                  
                  
                  
                  21,41812,000
                  
                  
                  
                  13,943
                  
                  
                  $
                  37,285Operating
      expenses:Amortization
      & depreciation
                  
                  
                  69,272
                  
                  
                  
                  59,358
                  
                  
                  
                  226,556General
      and administrative
                  
                  
                  147,254
                  
                  
                  
                  76,706
                  
                  
                  
                  840,102216,526
                  
                  
                  
                  136,064
                  
                  
                  
                  1,066,658Operating
      - other:Gain
      on asset sales
                  
                  
                  18,750
                  
                  
                  
                  27,116
                  
                  
                  
                  45,866Gain
      (loss) from operations
                  
                  
                  (185,776
                  )
                  
                  
                  (95,005
                  )
                  
                  
                  (983,507
                  )Other
      income (expense):Interest
      revenue
                  
                  
                  28
                  
                  
                  
                  -
                  
                  
                  
                  28Interest
      expense
                  
                  
                  (17,152
                  )
                  
                  
                  (19,307
                  )
                  
                  
                  (40,696
                  )Other
                  
                  
                  273
                  
                  
                  
                  125
                  
                  
                  
                  398(16,851
                  )
                  
                  
                  (19,182
                  )
                  
                  
                  (40,270
                  )Income
      (loss) beforeprovision
      for income taxes
                  
                  
                  (202,627
                  )
                  
                  
                  (114,187
                  )
                  
                  
                  (1,023,777
                  )Provision
      for income tax
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      income (loss)
                  
                  $
                  (202,627
                  )
                  
                  $
                  (114,187
                  )
                  
                  $
                  (1,023,777
                  )Net
      income (loss) per share(Basic
      and fully diluted)
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.01
                  )Weighted
      average number ofcommon
      shares outstanding
                  
                  
                  8,482,320
                  
                  
                  
                  8,482,320
   The
accompanying notes are an integral part of the financial statements.
  F-3
 IMMS,
INC.
 (A
Development Stage Company) STATEMENTS
OF STOCKHOLDERS' EQUITY
 DeficitAccumulatedCommon
      Stock
                  
                  
                  
                  
                  
                  During
      The
                  
                  
                  Stock-Amount
                  
                  
                  Additional
                  
                  
                  Development
                  
                  
                  holders'Shares
      (1)
                  
                  
                  ($.001
      Par)
                  
                  
                  Paid
      in Capital
                  
                  
                  Stage
                  
                  
                  EquityBalances
      at December 31, 2002
                  
                  
                  2,100,000
                  
                  
                  $
                  2,100
                  
                  
                  $
                  (1,890
                  )
                  
                  $
                  (4,435
                  )
                  
                  $
                  (4,225
                  )Gain
      (loss) for the year
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (37,033
                  )
                  
                  
                  (37,033
                  )Balances
      at December 31, 2003
                  
                  
                  2,100,000
                  
                  
                  $
                  2,100
                  
                  
                  $
                  (1,890
                  )
                  
                  $
                  (41,468
                  )
                  
                  $
                  (41,258
                  )Gain
      (loss) for the year
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (120,728
                  )
                  
                  
                  (120,728
                  )Balances
      at December 31, 2004
                  
                  
                  2,100,000
                  
                  
                  $
                  2,100
                  
                  
                  $
                  (1,890
                  )
                  
                  $
                  (162,196
                  )
                  
                  $
                  (161,986
                  )Debt
      conversion
                  
                  
                  2,829,820
                  
                  
                  
                  2,829
                  
                  
                  
                  280,153
                  
                  
                  
                  
                  
                  
                  
                  282,982Sales
      of common stock
                  
                  
                  3,552,500
                  
                  
                  
                  3,553
                  
                  
                  
                  516,947
                  
                  
                  
                  
                  
                  
                  
                  520,500Gain
      (loss) for the year
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (549,202
                  )
                  
                  
                  (549,202
                  )Balances
      at December 31, 2005
                  
                  
                  8,482,320
                  
                  
                  $
                  8,482
                  
                  
                  $
                  795,210
                  
                  
                  $
                  (711,398
                  )
                  
                  $
                  92,294Gain
      (loss) for the year
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (202,627
                  )
                  
                  
                  (202,627
                  )Balances
      at December 31, 2006
                  
                  
                  8,482,320
                  
                  
                  
                  8,482
                  
                  
                  
                  795,210
                  
                  
                  
                  (914,025
                  )
                  
                  
                  (110,333
                  )Gain
      (loss) for the year
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (114,187
                  )
                  
                  
                  (114,187
                  )Balances
      at December 31, 2007
                  
                  
                  8,482,320
                  
                  
                  $
                  8,482
                  
                  
                  $
                  795,210
                  
                  
                  $
                  (1,028,212
                  )
                  
                  $
                  (224,520
                  )(1)
      As adjusted for a 1000 for 1 forward stock split in January 2005, and a 1
      for 10 reverse stock split in November
      2005.
    The
accompanying notes are an integral part of the financial
statements.
  F-4
 
 IMMS,
INC.
 (A
Development Stage Company)
 STATEMENTS
OF CASH FLOWS
 Period
      FromJan.
      1, 2003Year
      Ended
                    
                    
                    Year
      Ended
                    
                    
                    (Inception)
      ToDec.
      31,2006
                    
                    
                    Dec.
      31, 2007
                    
                    
                    Dec.
      31, 2007Cash
      Flows From Operating Activities:Net
      income (loss)
                    
                    $
                    (202,627
                    )
                    
                    $
                    (114,187
                    )
                    
                    $
                    (1,023,777
                    )Adjustments
      to reconcile net loss tonet
      cash provided by (used for)operating
      activities:Amortization
      & depreciation
                    
                    
                    69,272
                    
                    
                    
                    59,358
                    
                    
                    
                    226,556Other
      assets
                    
                    
                    1,076
                    
                    
                    
                    -
                    
                    
                    
                    -Gain
      on asset sales
                    
                    
                    (18,750
                    )
                    
                    
                    (27,116
                    )
                    
                    
                    (45,866
                    )Accounts
      payable
                    
                    
                    
                    
                    
                    
                    28,078
                    
                    
                    
                    28,078Accrued
      payables - related parties
                    
                    
                    1,000
                    
                    
                    
                    13,474
                    
                    
                    
                    51,825Other
      payables
                    
                    
                    1,198
                    
                    
                    
                    3,927
                    
                    
                    
                    6,726Net cash provided by (used
      for)operating
      activities
                    
                    
                    (148,831
                    )
                    
                    
                    (36,466
                    )
                    
                    
                    (756,458
                    )Cash
      Flows From Investing Activities:Fixed
      asset purchases
                    
                    
                    (32,985
                    )
                    
                    
                    -
                    
                    
                    
                    (353,858
                    )Fixed
      asset sales
                    
                    
                    55,000
                    
                    
                    
                    90,000
                    
                    
                    
                    145,000Net
      cash provided by (used for)investing
      activities
                    
                    
                    22,015
                    
                    
                    
                    90,000
                    
                    
                    
                    (208,858
                    )Cash
      Flows From Financing Activities:Notes
      payable - borrowings
                    
                    
                    102,500
                    
                    
                    
                    12,500
                    
                    
                    
                    546,772Notes
      payable - payments
                    
                    
                    (11,252
                    )
                    
                    
                    (71,408
                    )
                    
                    
                    (95,484
                    )Sales
      of common stock
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    520,500Net cash provided by (used
      for)financing
      activities
                    
                    
                    91,248
                    
                    
                    
                    (58,908
                    )
                    
                    
                    971,788Net
      Increase (Decrease) In Cash
                    
                    
                    (35,568
                    )
                    
                    
                    (5,374
                    )
                    
                    
                    6,472Cash
      At The Beginning Of The Period
                    
                    
                    47,414
                    
                    
                    
                    11,846
                    
                    
                    
                    -Cash
      At The End Of The Period
                    
                    $
                    11,846
                    
                    
                    $
                    6,472
                    
                    
                    $
                    6,472Schedule
      Of Non-Cash Investing And Financing ActivitiesIn
      2003 the Company purchased $65,000 of equipment for notes payable in the
      same amount.In
      2005 the Company issued 2,829,820 common shares to retire related party
      debt of $282,982.Supplemental
      DisclosureCash
      paid for interest
                    
                    $
                    11,252
                    
                    
                    $
                    15,380Cash
      paid for income taxes
                    
                    $
                    -
                    
                    
                    $
                    -
   The
accompanying notes are an integral part of the financial
statements.
 F-5
  IMMS,
INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2006 and 2007, & For The Period
 From
January 1, 2003 (Inception) Through December 31, 2007
   NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 IMMS,
Inc. (the “Company”), was incorporated in the State of Nevada on May 10, 2001
under the name North American Association for Commerce Enabled Small Businesses.
In 2001 the Company changed its name to General Pacific Corp., in 2003 to
O'Connell Motorsports Group, Inc., and in 2004 to IMMS, Inc. The Company designs
and assembles motorsport racecars for its own use, and competes in organized
racing events. The Company is currently considered to be in the development
stage, and has generated only limited revenues from its activities in the racing
business.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect 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.
 
 Cash and cash
equivalents
 
 The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
 
 Accounts
receivable
 
 The
Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. At December 31, 2006 and 2007, the Company had no balance in
its allowance for doubtful accounts.
 
 Property and
equipment
 
 Property
and equipment are recorded at cost and depreciated under straight line methods
over each item's estimated useful life. The Company uses a five year life for
racecars and for shop and pit equipment.
 
 Revenue
recognition
 
 Revenue
is recognized on an accrual basis as earned under contract terms.
  F-6
  IMMS,
INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2006 and 2007, & For The Period
 From
January 1, 2003 (Inception) Through December 31, 2007
   NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued):
 
 Advertising
costs
 
 Advertising
costs are expensed as incurred. The Company recorded no material advertising
costs in 2006 or 2007.
 
 Income
tax
 
 The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
 
 Net income (loss) per
share
 
 The net
income (loss) per share is computed by dividing the net income (loss) by the
weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
 
 Financial
Instruments
 
 The
carrying value of the Company’s financial instruments, as reported in the
accompanying balance sheets, approximates fair value.
 
 Long-Lived
Assets
 
 In
accordance with Statement of Financial Accounting Standard 144 “Accounting for
the Impairment or Disposal of Long-Lived Assets”, the Company regularly reviews
the carrying value of intangible and other long-lived assets for the existence
of facts or circumstances, both internally and externally, that may suggest
impairment. If impairment testing indicates a lack of recoverability, an
impairment loss is recognized by the Company if the carrying amount of a
long-lived asset exceeds its fair value.
  F-7
  IMMS,
INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2006 and 2007, & For The Period
 From
January 1, 2003 (Inception) Through December 31, 2007
   NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
 
 Products and services,
geographic areas and major customers
 
 The
Company earns revenue from race purses and the sale of advertising to racing
sponsors, but does not separate sales of different activities into operating
segments. The Company had limited revenues in 2006 and 2007 from a small client
base. A portion of Company revenue in 2006 and 2007 was from a garage space for
advertising exchange agreement with a related party.  The advertising
agreement terminated in March 2007.  Revenue in 2007 also included
race purses and rental income from lease of equipment to a related
party.
   NOTE
2. RELATED PARTY TRANSACTIONS
 
 At the
end of 2006 the Company had $33,463 in due on demand, non-interest bearing loans
payable outstanding to related parties, and $70,000 in interest bearing notes.
At December 31, 2007, the Company had $40,963 in due on demand, non-interest
bearing loans payable outstanding to related parties, and $10,000 under notes
due to related parties bearing interest at 10%. The notes are due in 2011, and
require monthly principal and interest payments of $319. Interest expense under
these notes for 2006 and 2007 was $1,563 and $3,958 respectively.
 
 At end
2006 and 2007, the Company had $188,750 and $182,342 in notes payable due to
financial institutions under borrowings undertaken by an officer for equipment
purchases, as well as $30,520 in payables due to the officer for down payments.
The notes are due from 2019 through 2025, are secured by Company equipment, bear
interest at rates from 7.75% - 8%, and require monthly payments of approximately
$1,700 per month.
 
 Of all
notes payable due at the end of 2007, $52,373 were current, and $180,932 long
term. Future required note principal payments by year for all notes payable
combined are 2008 $53,454, 2009 $10,381, 2010 $10,017, 2011 $8,180, 2012 $8,849,
and thereafter $142,424. Interest expense under all notes payable was $17,152 in
2006 and $19,307 in 2007. The fair value of the notes payable is estimated based
on the current rates offered to the Company for debt of the same remaining
maturities. At December 31, 2006 and 2007 the fair value of the notes payable
approximates the amount recorded in the financial statements.
 
 In 2007
the Company realized $27,116 in gains from equipment sales to entities under
common control.
  F-8
  IMMS,
INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2006 and 2007, & For The Period
 From
January 1, 2003 (Inception) Through December 31, 2007
   NOTE
2. RELATED PARTY TRANSACTIONS (Continued):
 
 The
Company used garage space provided by a former officer in exchange for
advertising on Company race cars. Prior to 2006, the Company recorded no revenue
or expense under the arrangement. In 2006 the Company began recording $1,000 per
month in expense for garage services in exchange for advertising at a set
minimum number of races during the year. Revenue was recognized on a per race
basis. The garage space for advertising arrangement was terminated March 31,
2007.
 
 The
Company's method in accounting for the exchange arrangement changed due to its
adoption of SFAS 153 “Exchange of Nonmonetary Assets (An Amendment of APB No.
29)”. SFAS 153 amends Opinion 29 to eliminate the fair value accounting
exception for nonmonetary exchanges of similar productive assets. The Company's
adoption of SFAS 153 was a change in accounting principle, and was preferable to
keep the Company's financial reporting GAAP compliant. No financial information
prior to 2006 has been retroactively adjusted, and the change had no effect on
income from continuing operations, net income, or per share amounts. Due to the
change in accounting principle, revenue increased in 2006 by $12,000 and general
and administrative expenses by the same amount. The change had no cumulative
effect on retained earnings or other components of equity or net assets in the
balance sheet as of the beginning of 2005.
 
 In
October 2007 the Company entered into a month to month lease agreement with a
company related by common control, agreeing to lease certain racing equipment to
the related party company in exchange for the related party making monthly
payments on Company notes payable in the amount of approximately $1,700 per
month. The Company recognized $6,418 in revenue under the agreement in
2007.
 
 NOTE
3. FIXED ASSETS
 
 Fixed
asset values recorded at cost are as follows:
 2006
                  
                  
                  2007Racecars
      and equipment
                  
                  $
                  339,965
                  
                  
                  $
                  238,902Shop
      and pit equipment
                  
                  
                  18,893
                  
                  
                  
                  0358,858
                  
                  
                  
                  238,902Less
      accumulated depreciation
                  
                  
                  (143,448
                  )
                  
                  
                  (145,734
                  )Total
                  
                  $
                  215,410
                  
                  
                  $
                  93,168Depreciation
      expense in 2006 and 2007 was $69,272 and $59,358.
  F-9
 
 IMMS,
INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2006 and 2007, & For The Period
 From
January 1, 2003 (Inception) Through December 31, 2007
 
 NOTE
4. INCOME TAXES
 
 Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses. These loss carryovers are
limited under the Internal Revenue Code should a significant change in ownership
occur.
 
 At
December 31, 2006 and 2007 the Company had net operating loss carryforwards of
approximately $856,000 and $967,000 which begin to expire in 2023. The deferred
tax asset of $171,000 and $193,000 created by the net operating losses has been
offset by a 100% valuation allowance. The change in the valuation allowance in
2006 and 2007 was $38,105 and $22,237.
 
 
 NOTE
5. GOING CONCERN
 
 The
Company has suffered recurring losses from operations and has a working capital
deficit and stockholders' deficit, and in all likelihood will be required to
make significant future expenditures in connection with continuing marketing
efforts along with general administrative expenses. These conditions raise
substantial doubt about the Company’s ability to continue as a going
concern.
 
 The
Company may raise additional capital through the sale of its equity securities,
through an offering of debt securities, or through borrowings from financial
institutions. By doing so, the Company hopes through increased marketing efforts
to generate greater revenues. Management believes that actions presently being
taken to obtain additional funding provide the opportunity for the Company to
continue as a going concern.
 F-10
 
 ITEM 8    CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
 
 Not
applicable.
 
 
 ITEM
8A(T)
 
 This
annual report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
Company’s registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
  ITEM
8B
 
 Inapplicable
   PART
III
   ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE;
 
 Name
              Age
              PositionKevin
      P. O’Connell
              40
              Chairman
      of the Board, Director & CEODavid
      M. Rifkin
              38
              PresidentJohn
      A. Brunkow
              64
              Director,
      CFO & Vice President-FinanceEdward
      A. Bernabeo
              39
              Secretary
      & Treasurer
  Kevin P. O’Connell— For the
past five years Mr. O’Connell has been the managing member of General Pacific
Partners, LLC. a Southern California based firm providing direct equity
sponsorship and advisory services to public and private companies. Additionally
during that term, he has managed his personal investment in various
developmental stage companies. A majority of his time was spent with the
management team of Taleo Grill, a new concept in Mexican cuisine and fine
dining. Further, he co-founded General Pacific Group, LLC, an asset management
firm.
  Mr.
O’Connell has been a involved in private equity and asset management firms with
particular focus in equities management, structured investments, private and
public financings, acquisitions and dispositions and corporate restructuring. He
has participated in, and managed the financings and development stage efforts of
several equity sponsored private to public companies. Mr. O'Connell has been
involved in motorsports since his early childhood racing motorcycles and karts
in St. Petersburg Florida and later in Houston Texas. In the early 90's, Mr.
O’Connell trained and raced with Skip Barber Racing in the Formula Dodge Series
at tracks such as Laguna Seca, Road America, and California Speedway in Fontana,
California. In 2004, O'Connell was the primary driver for the #59 General
Pacific Partners, LLC Ford and competed in select Irwindale Superlate Model
events. He has a Bachelor of Arts (pre-law) from California State University in
Northridge and received his Masters of Business Administration (MBA) from
Pepperdine University. Mr. O’Connell devotes approximately 25% of his time to
our business.
  19
  David M. Rifkin -. Since 1995
Mr. Rifkin has been the President and CEO of Rifco Sales, a Southern California
based sales and marketing firm that primarily focuses on sales growth strategy,
marketing concepts and distribution networks through original equipment and
aftermarket companies. Prior to 1995 he owned and managed multiple web retail
operations serving the personal care, automotive and janitorial industries. Mr.
Rifkin has a Bachelor of
Science from SOSU in Oregon with an emphasis in business and marketing.
He devotes approximately 10% of his time to our business.
  John A. Brunkow - Mr. Brunkow
is currently an independent business consultant. From 2001 through June of
2005, he was a member of the board of directors of General Environmental
Services, Inc. a Nevada corporation, formerly known as Ultronics Corporation.
GEM is a publicly held environmental services company. In 2001, Mr. Brunkow was
a member of the team engaged to restructure GEM and implement financial controls
needed to establish the company’s credit facility. Previously Mr. Brunkow
advised in strategic planning and mergers and acquisitions for a
business-to-business provider of human resource services. He spent more than 20
years in corporate finance, marketing, and sales. Prior to 2001, Mr. Brunkow was
associated with Levine Liechtman Capital Partners, a private investment firm
that invests in and acts as a financial sponsor for California based middle
market companies in a wide variety of industries. Prior thereto, Mr. Brunkow was
Executive Vice- President and Managing Director of Benefit Capital, Inc., a
regional investment banking firm. During his tenure at Benefit Capital, he
specialized in corporate finance transactions which included debt and equity
placements, mergers and acquisitions, and Employee Stock Ownership (EOSP)
buyouts. Prior to his time at Benefit Capital, Mr. Brunkow spent in excess of
twelve years with IBM in a variety of sales, marketing, and operating management
positions. Mr. Brunkow has served on the board of Directors for the Orange
County Venture Group. Mr. Brunkow is a graduate of the IBM Senior Management
School and the IBM Graduate Business School. He devotes approximately 10% of his
time to our business.
  Edward A. Bernabeo - Since
2008, Mr. Bernabeo has been the Director of Business Development for
Trilogy Capital Partners.  From 2003 through 2007 he was a trader for
Strikepoint Trading, a registered broker-dealer in Mission Viejo,
California. From 2002 through 2004, he was the in charge of Business Development
for Squar Milner, CPAs, in Newport Beach, CA. From 1999 through 2002 he was a
principal of Westwood Stock Trading, where he managed the local area network and
was in charge of all marketing, sales, training, and new trading software. The
Westwood Stock Trading was purchased by Protrader Securities Corp in 1999. Mr.
Bernabeo has been in the securities industry since May of 1990 working at Lehman
Bros as an assistant to a private client asset manager. In January 1991 he
acquired his series 7 & 63 NASD licenses. He focused in private client
services and by 1992 became the top business origination broker in the Houston
office. From December 1993 to November 1995, Mr. Bernabeo worked for Olde
Discount in Houston, Texas. He managed high net worth investor assets and
managed $25 million in assets. Further, he trained new brokers in sales and back
office operations. He devotes approximately 10% of his time to our
business. He is the brother-in-law of Mr. O’Connell.
  Involvement
in Certain Legal Proceedings
 
 We are
not aware of any material legal proceedings that have occurred within the past
five years concerning any director, director nominee, or control person which
involved a criminal conviction, a pending criminal proceeding, a pending or
concluded administrative or civil proceeding limiting one's participation in the
securities or banking industries, or a finding of securities or commodities law
violations.
  20
  Code
of Ethics
  We have
adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The code of ethics is designed to deter
wrongdoing and to promote:
  ·
              Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;
  ·
              Full,
      fair, accurate, timely, and understandable disclosure in reports and
      documents that we file with, or submit to, the SEC and in other public
      communications made by us;
  ·
              Compliance
      with applicable governmental laws, rules and
  regulations;
  ·
              The
      prompt internal reporting of violations of the code of ethics to an
      appropriate person or persons identified in the code of ethics;
      and
  ·
              Accountability
      for adherence to the code of
ethics.
  A copy of
our code of ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions was attached as an exhibit to SB-2 Registration
Statement filed with the Securities & Exchange Commission..
  Procedure
for Nominating Directors
  There
have been no material changes to the procedures by which security holders may
recommend nominees to our Board of Directors.
  The Board
evaluates the recommended candidate and determines whether or not to proceed
with the candidate in accordance with our procedures. We reserve the right to
change our procedures at any time to comply with the requirements of applicable
laws.
  Committees
of the Board of Directors
 
 The Board
has the responsibility for establishing broad corporate policies and reviewing
our overall performance rather than day-to-day operations. The Board's primary
responsibility is to oversee the management of our Company and, in so doing,
serve the best interests of our Company and our stockholders. Our full Board
performs all of the functions normally designated to an Audit Committee,
Compensation Committee and Nominating Committee.
  Audit
Committee
 
 Although
our Board does not have a separately-designated standing Audit Committee, our
full Board performs the functions usually designated to an Audit
Committee.
   ITEM
10. EXECUTIVE COMPENSATION.
  The
following table shows the compensation paid or accrued during the fiscal years
ended December 31, 2007 and 2006 to our President and Chief Executive
Officer.
  21
 
 Summary
Compensation Table
  Name
      and Principal Position
                
                Year
                  Ended
                  December 31,
                
                
                Base Salary
                  ($)
                
                
                Dollar Value
                  ofTotal
                  Compensation
                  forthe Covered
                  FiscalYear
                  ($)(a)
                
                (b)
                
                
                (c)
                
                
                (d)Kevin
      P. O’Connell, CEO Chairman of the Board
                
                2007
                
                $
                (0)
                
                $
                (0)2006
                
                $
                (0)
                
                $
                (0)David
      M. Rifkin, President
                
                2007
                
                $
                (0)
                
                $
                (0)2006
                
                $
                (0)
                
                $
                (0)John
      Brunkow  Director, CFO and Vice President
                
                2007
                
                $
                (0)
                
                $
                (0)2006
                
                $
                (0)
                
                $
                (0)Edward
      A Bernabeo, Secretary
                
                2007
                
                $
                (0)
                
                $
                (0)2006
                
                $
                (0)
                
                $
                (0)
  Employment
Agreements of Each Named Executive Officer
  We do not
have written or oral employment agreements with any of our named executive
officers or other employees.  We do not intend to pay any salaries for
the year 2008.
 
 Outstanding
Equity Awards at Fiscal Year-End
  There are
no outstanding equity awards or
retirement benefits
  Nonqualified
Deferred Compensation
 
 No
non-qualified defined contribution or other
deferred compensation  was awarded during 2007.
 
 Potential
Payments Upon Termination or Change of Control
 
 None.
  Director
Compensation
  No Board
of Directors fees were paid to directors in either cash or stock during the year
ended December 31, 2007.
   ITEM 11. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
 
 Securities
Authorized for Issuance Under Equity Compensation Plans
 
 There are
2 million common shares that are reserved for issuance under our 2005 Stock
Incentive Plan.
  22
 
 Security
Ownership of Certain Beneficial Owners and Management
 
 The
following table sets forth certain information as of March 1, 2008, regarding
the beneficial ownership of our common stock held by each of our executive
officers and directors, individually and as a group and by each person who
beneficially owns in excess of five percent of our common stock. In general,
beneficial ownership includes those shares that a person has the power to vote,
sell, or otherwise dispose. Beneficial ownership also includes that number of
shares which an individual has the right to acquire within 60 days of the date
this table was prepared (such as stock options). Two or more persons may be
considered the beneficial owner of the same shares. The inclusion in this
section of any shares deemed beneficially owned does not constitute an admission
by that person of beneficial ownership of those shares.
  The
following table sets forth the principal stockholders of the Company and their
percentage stock ownership
  NO.
      of
                Shares
                Owned
              
              %
      of
                Stock
                OutstandingNameKevin
      P. O’Connell*
              
              
              3,829,820
              
              
              45.5
              %World
      In Motion, Inc**
              
              
              1,500,000
              
              
              17.7John
      A. Brunkow
              
              
              100,000
              
              
              1.2Michael
      Speakman
              
              
              500,000
              
              
              5.9
 
 *Includes
a) 1,500,000 shares owned by General Pacific Partners LLC, of which Mr.
O’Connell is the Managing Member; b) 61,482 owned by General Pacific Partners
LLC, of which of which Mr. O’Connell is the Managing Member; and c) 5,000 owned
by ReveteCapital Partners LLC of which Mr. O’Connell is the Managing
Member
 ** Donald
L. Danks is controlling stockholder of World In Motion, Inc.
   ITEM 12. CERTAIN RELATIONSHIPS AND
RELATEDTRANSACTIONS,AND DIRECTORINDEPENDENCE.
 
 Transactions with Related Persons, Promotersand Certain Control
Persons
  At the
end of 2006 the Company had $33,463 in due on demand, non-interest bearing loans
payable outstanding to related parties, and $70,000 in interest bearing notes.
At December 31, 2007, the Company had $40,963 in due on demand, non-interest
bearing loans payable outstanding to related parties, and $10,000 under notes
due to related parties bearing interest at 10%. The notes are due in 2011, and
require monthly principal and interest payments of $319. Interest expense under
these notes for 2006 and 2007 was $1,563 and $3,958 respectively.
 
 At end
2006 and 2007, the Company had $188,750 and $182,342 in notes payable due to
financial institutions under borrowings undertaken by an officer for equipment
purchases, as well as $30,520 in payables due to the officer for down payments.
The notes are due from 2019 through 2025, are secured by Company equipment, bear
interest at rates from 7.75% - 8%, and require monthly payments of approximately
$1,700 per month.
 
 Of all
notes payable due at the end of 2007, $52,373 were current, and $180,932 long
term. Future required note principal payments by year for all notes payable
combined are 2008 $53,454, 2009 $10,381, 2010 $10,017, 2011 $8,180, 2012 $8,849,
and thereafter $142,424. Interest expense under all notes payable was $17,152 in
2006 and $19,307 in 2007. The fair value of the notes payable is estimated based
on the current rates offered to the Company for debt of the same remaining
maturities. At December 31, 2006 and 2007 the fair value of the notes payable
approximates the amount recorded in the financial statements.
  23
 
 In 2007
the Company realized $27,116 in gains from equipment sales to entities under
common control.
  The
Company used garage space provided by a former officer in exchange for
advertising on Company race cars. Prior to 2006, the Company recorded no revenue
or expense under the arrangement. In 2006 the Company began recording $1,000 per
month in expense for garage services in exchange for advertising at a set
minimum number of races during the year. Revenue was recognized on a per race
basis. The garage space for advertising arrangement was terminated March 31,
2007.
 
 The
Company's method in accounting for the exchange arrangement changed due to its
adoption of SFAS 153 “Exchange of Nonmonetary Assets (An Amendment of APB No.
29)”. SFAS 153 amends Opinion 29 to eliminate the fair value accounting
exception for nonmonetary exchanges of similar productive assets. The Company's
adoption of SFAS 153 was a change in accounting principle, and was preferable to
keep the Company's financial reporting GAAP compliant. No financial information
prior to 2006 has been retroactively adjusted, and the change had no effect on
income from continuing operations, net income, or per share amounts. Due to the
change in accounting principle, revenue increased in 2006 by $12,000 and general
and administrative expenses by the same amount. The change had no cumulative
effect on retained earnings or other components of equity or net assets in the
balance sheet as of the beginning of 2005.
 
 In
October 1, 2007 the Company entered into a month to month lease agreement with a
company related by common control, agreeing to lease certain racing equipment to
the related party company in exchange for the related party making monthly
payments on Company notes payable in the amount of approximately $1,700 per
month. The Company recognized $6,418 in revenue under the agreement in
2007.
 
 The
Company's headquarters are located at premises leased by General Pacific
Partners, LLC, a company that is controlled by Kevin P. O’Connell, CEO of the
Company. No rent is charged for maintaining the office at this location. The
criteria under accounting principles generally accepted in the United States of
America necessary to record contributed facilities within these financial
statements were not met. Therefore, the Company has not recorded a value
associated with this benefit.
 
 DIRECTOR
INDEPENDENCE
  As of
December 31, 2007 and March  31, 2008, Kevin P. O’Connell and John A.
Brunkow served as the Company’s directors.
   ITEM 13.
EXHIBITS.
  EXHIBIT
                  NUMBER
                IDENTIFICATION
      OF EXHIBIT3.1
                Re-Stated
      Articles of Incorporation  as filed with the Nevada Secretary of
      State on March 5, 2005,  (incorporated by reference to
      Registration Statement on Form SB-2, filed on September 5,
      20063.3
                Bylaws.
      (incorporated by reference to Registration Statement on Form SB-2, filed
      on September 5, 2006.)4.1
                Specimen
      common stock certificate (incorporated by reference to Registration
      Statement on Form SB-2, filed on September 5, 2006.)10.1
                2005
      Stock Incentive Plan (incorporated by reference to Registration Statement
      on Form SB-2, filed on September 5, 2006.)14.1
                Code
      of Ethics (incorporated by reference to Registration Statement on Form
      SB-2, filed on September 5, 2006.)31.1
                Certification
      of the Principal Executive Officer (attached hereto.)32.1
                Certification
      by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
      (attached hereto.)
  24
  ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES.
  Audit
Fees
  In 2007,
we paid $ 21,076 in auditor fees related to the preparation of our
quarterly and annual financial statements.
 
 Audit-Related
Fees
  There
were no aggregate audit-related fees billed by Ronald R. Chadwick, P.C.for
professional services rendered for the audit of our annual financial statements
for fiscal year ended December 31, 2007.
  Tax
Fees
  The
aggregate fees billed by the Company's auditors for professional services
rendered for the preparation of the Company's tax returns during the year ended
December 31, 2007 were $0.
 
 All
Other Fees
  There
were no other fees billed by Ronald R. Chadwick, P.C.for professional services
rendered, other than as stated under the captions Audit Fees, Audit-Related
Fees, and Tax Fees.
  The
Board of Directors Pre-Approval Policy and Procedures
  We do not
have a separate Audit Committee. Our full Board performs the functions of an
Audit Committee. During fiscal year 2006, the Board adopted policies and
procedures for the pre-approval of audit and non-audit services for the purpose
of maintaining the independence of our independent auditors. We may not engage
our independent auditors to render any audit or non-audit service unless either
the service is approved in advance by the Board or the engagement to render the
service is entered into pursuant to the Board's pre-approval policies and
procedures. On an annual basis, the Board may pre-approve services that are
expected to be provided to us by the independent auditors during the following
12 months. At the time such pre-approval is granted, the Board must (i) identify
the particular pre-approved services in a sufficient level of detail so that
management will not be called upon to make judgment as to whether a proposed
service fits within the pre-approved services and (ii) establish a monetary
limit with respect to each particular pre-approved service, which limit may not
be exceeded without obtaining further pre-approval under the
policy.
  The Board
has considered whether the provision of the services described above under the
caption entitled "All Other Fees" is compatible with maintaining the auditor's
independence.
  25
  SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Exchange Act, the Company has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Company and in the capacities and on
the dates indicated.
  IMMS,
      Inc.Date: March
      17, 2008
                By:
                /s/ Kevin
      P. O’ConnellKevin
      P. O’ConnellChairman,
      CEO, PrincipalExecutive
      Officer and Director
  Date: March
      17, 2008
                By:
                /s/ John
      A. BrunkowJohn
      A. BrunkowDirector
      and Chief Financialand
      Accounting Officer