Attached files
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 333-150061
INNOCENT, INC.
--------------
(Exact name of registrant as specified in its charter)
Nevada 98-0585268
------------------------ ------------------------
(State of incorporation) (I.R.S. Employer ID No.)
2000 NE 22nd ST, Wilton Manors, Florida, 33305
-------------------------------------------
(Address of principal executive officers, including Zip Code)
(828)489-9408
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(Issuer's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $0.001
par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [ ]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by checkmark 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
past 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 [X] No [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes[ ] No [X]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter:
The aggregate market value of the Company's common shares of voting stock held
by non-affiliates of the Company at August 31, 2009, computed by reference to
the $0.010 Registration Statement per-share price on August 31, 2009, was
$30,000.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
As of December 15, 2009, there were 30,000,000 shares of common stock, par value
$0.001, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
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TABLE OF CONTENTS
Page
No.
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Part I
Item 1. Business 5
Item
1A. Risk Factors 6
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Securities Holders 8
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 8
Item 7. Management's Discussion and Analysis of Financial
Conditionand Results of Operation 10
Item 8. Financial Statements 14
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 15
Item
9A. Controls and Procedures 15
Part III
Item 10. Directors and Executive Officers 16
Item 11. Executive Compensation 17
Security Ownership of Certain Beneficial Owners and
Item 12. Management
and Related Stockholder Matters 18
Item 13. Certain Relationships and Related Transactions and
Director Independence 18
Item 14. Principal Accounting Fees and Services 20
Part IV
20
Item 15. Exhibits
Signatures 21
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PART I
FORWARD LOOKING STATEMENTS
This annual report contains forward-looking statements. Forward-looking
statements are projections of events, revenues, income, future economic
performance or management's plans and objectives for our future operations. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors" and the risks set out below, any of which may
cause our or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:
- the uncertainty of profitability based upon our history of losses;
- risks related to failure to obtain adequate financing on a timely basis and on
acceptable terms to continue as going concern;
- risks related to our international operations;
- risks related to product liability claims;
- other risks and uncertainties related to our business plan and business
strategy.
This list is not an exhaustive list of the factors that may affect any of our
forward-looking statements. These and other factors should be considered
carefully and readers should not place undue reliance on our forward-looking
statements.
Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and we undertake no obligation to
update forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common stock" refer to
the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our", the "Company" and
"Innocent" mean Innocent, Inc., unless otherwise indicated.
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ITEM 1. BUSINESS
GENERAL INFORMATION ABOUT OUR COMPANY
Innocent, Inc. ("Company") was organized September 27, 2006 under the laws of
the State of Nevada for the purpose of selling new food products produced or
developed by North American companies to foreign markets. On August 31, 2009,
the Company discontinued its involvement in the sales of tea due to a strategic
change in business focus by the acquisition of mineral rights as disclosed in
the Company's 8-K filed with the SEC on September 2, 2009. The Company currently
has limited operations or realized revenues from its planned principle business
purpose and, in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," is
considered a Development Stage Enterprise.
On September 1, 2009 the company acquired mining operations in an active working
gold mine. The Board of Directors approved the Purchase Agreement from Global
Finishing, Inc. (Frankfurt:G8BA) a Nevada Corporation, to purchase its interest
in the Maria Olivia Concessions and Miranda PLSA, located in Ecuador, within the
prospective gold and silver bearing vein systems. Global Finishing Inc. acquired
the concessions from Companis Minera Monte-Verde S.A. Comimontsa in a 100% share
exchange for 6,000,000 Global Finishing Inc., Regulation S common shares which
represented 22.8% of its shares. Global Finishing Inc. also acquired interest in
Miranda PLSA in April 2009 which will result in 100% ownership following the
payment of $2,000,000. The initial payment of $500,000 was paid resulting in a
20% interest in the profit from the site. Global Finishing, Inc. spent $385,000
for the mill upgrades which resulted in an increase from 60t per day to 130t per
day. This increase in output is expected to cover the balance of the payments to
be made for 100% of the profits. Global Finishing Inc. at the time was using
contract labor for the mineral extraction; this practice will continue through
the end of the year and starting next year the current miners will become
employees of the company. The company will provide additional information on the
mining business in the first quarter report after meeting with the holder of the
rights that were transferred to Global Finishing and Ecuador mining officials
concerning the company obligations and new mining laws and procedures. Company
management will meet with officials in Ecuador the second week of January 2010
to finalize the methods of operations and insure we are in compliance with new
laws and procedures that go into effect on January 1, 2010. At this time the
Ecuador year end summary of operations and financial information will be
available. We expect that from the management estimates submitted by Global
Finishing Inc concerning the profit percent earned (20%) during the period
Innocent Inc., was the transferee of the Global agreement, said profits earned
should be sufficient to cover the second payment of 500,000 due under the
assumed terms and conditions of the Global Finishing Inc. agreement.
Compliance with Environmental Laws
-------------------------------------
We are not aware of any environmental laws violations or issues related to the
company property in Ecuador.
Employees
---------
We have no full-time employees at the present time but it is expected that the
current contract labor force working the mining operations will become employees
of the company indirectly via a company set up in Ecuador. This issue will be
determined in a meeting in Ecuador the first week of January 2010.
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Reports to Securities Holders
--------------------------------
We provide an annual report that includes audited financial information to our
shareholders. We will make our financial information equally available to any
interested parties or investors through compliance with the disclosure rules for
a small business issuer under the Securities Exchange Act of 1934. We are
subject to disclosure filing requirements including filing Form 10K annually and
Form 10Q quarterly. In addition, we will file Form 8K and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event that our obligation to file such
reports is suspended under the Exchange Act. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
ITEM 1A. RISK FACTORS
WE FACE RISKS ASSOCIATED WITH OPERATE IN A FOREIGN COUNTRY
We are subject to the risks generally associated with doing business abroad.
These risks include foreign laws and regulations, foreign consumer preferences,
political unrest, disruptions or delays in shipments and changes in economic
conditions in countries to which we sell products.
WE MAY BE ADVERSELY AFFECTED BY VALUE OF OUR PRODUCT GIVEN IT IS SET BY WORLD
DEMAND AND BEYOND OUR CONTROL
We face risks of losses in inventory value given the nature of the valuation of
precious metals. The value of such metals is determined by the demand for them
on a global scale and is beyond our control. While we do not anticipate there to
be a significant decrease in the value of precious metals, we cannot guarantee
any such change in value.
THERE IS SUBSTANTIAL UNCERTAINTY AS TO WHETHER WE WILL CONTINUE OPERATIONS. If
we discontinue operations, you could lose your investment. Our auditors have
discussed their uncertainty regarding our business operations in their audit
report dated December 22,, 2009. This means that there is substantial doubt that
we can continue as an ongoing business for the next 12 months. The financial
statements do not include any adjustments that might result from the uncertainty
about our ability to continue in business. As such, we may have to cease
operations and you could lose your entire investment.
WE LACK AN OPERATING HISTORY
There is no assurance that our future operations will result in continued
profitable revenues. If we cannot generate sufficient revenues to operate
profitably, our business will fail. We have very little operating history upon
which an evaluation of our future success. We cannot guarantee that we will be
successful in generating revenues in the future. Failure to generate revenues
will cause us to go out of business.
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BECAUSE OUR MANAGEMENT DOES NOT HAVE PRIOR EXPERIENCE IN MINING, OUR BUSINESS
HAS A HIGHER RISK OF FAILURE.
Our current directors do not have experience in the mining industry. As a
result, we may not be able to recognize and take advantage of opportunities
without the aid of qualified marketing and business development consultants. Our
directors' decisions and choices may not be well thought out and our operations,
earnings and ultimate financial success may suffer irreparable harm as a result.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND THE FINRA'S SALES PRACTICE REQUIREMENTS, 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.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the Financial Industry Regulatory Authority has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the National Association of Securities Dealers believes that
there is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The National Association of Securities
Dealers' requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.
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ITEM 2. PROPERTIES On September 1, 2009 the company acquired mining operations
in an active working gold mine as indicated in the company 8K filing. The Board
of Directors approved the Purchase Agreement from Global Finishing, Inc.
(Frankfurt:G8BA) a Nevada Corporation, to purchase its interest in the Maria
Olivia Concessions and Miranda PLSA, located in Ecuador. Due to changes in the
mining operations laws and procedures to take effect on January 1, 2010, updated
information concerning the leasehold rights and obligations will be reported and
disclosed in the first quarter filing. With the excepting of contract workers
becoming company employees and certain reporting requirement changes to the
Government of Ecuador, we do not expect any adverse conditions resulting in the
lease assumption from Global Finishing.
ITEM 3. LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings, and we are not aware of
any pending or potential legal actions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fiscal year
ended August 31, 2009.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
(a) Market Information
Our shares of common stock commenced quotation on the OTC Bulletin Board under
the symbol INCT on June 3, 2008.
The company stock started active trading in September 2009. The range of high
and low bid quotations for the common stock as reported by the OTC Bulletin
Board for the respective market on which our common stock has been listed during
the period September thru December 2009, has been in a range of .40 low and
$1.37 high with a current price of $1.19 at December 24, 2009.
(b) Holders of Common Stock
We have approximately 32 shareholders of record, and 30,000,000 shares
outstanding with an approximate float of 3,000,000 shares as of December 22,
2009. Because of our small shareholder base, our stock may not experience high
volume trading in the near future. We anticipate to have more shareholders in
the future, but cannot guarantee any such happening.
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(c) Dividends
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course
of business; or
2. our total assets would be less than the sum of our total liabilities plus the
amount that would be needed to satisfy the rights of shareholders who have
preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in
place.
Recent Sales of Unregistered Securities
-------------------------------------------
On September 19, 2009 convertible notes in the amount of $10,000.00 were
converted to 10,000,000 shares of rule 144 restricted common stock.
We completed an offering of 4,000,000 shares of our common stock at a price of
$0.001 per share to our directors Vera Barinova (3,000,000) and Aleksandr
Kryukov (1,000,000), on October 23, 2007. The total amount received from this
offering was $4,000. We completed this offering pursuant to Regulation S of the
Securities Act. Since the resignation of these Directors and Officers that was
announced August 12, 2009, it has been over 90 days, so these shares may be
privately sold by the parties or deposited in trading accounts and redeemed as
free trading.
We completed an offering of 3,000,000 shares of common stock at a price of
$0.010 per share to a total of 30 purchasers on October 27, 2007. The total
amount received from this offering was $30,000. We completed this offering
pursuant to Regulation S of the Securities Act. These shares have been privately
sold by the selling share holders and as of this report 1,200,000 have been
deposited in accounts for active trading.
The offer and sale of all Shares of our common stock listed to the previous
officers and directors and the selling shareholders identified in the S-1 were
affected in reliance on the exemptions for sales of securities not involving a
public offering, as set forth in Regulation S promulgated under the Securities
Act. The Investor acknowledged the following: Subscriber is not a United States
Person, nor is the Subscriber acquiring the Shares directly or indirectly for
the account or benefit of a United States Person. None of the funds used by the
Subscriber to purchase the Units have been obtained from United States Persons.
For purposes of this Agreement, "United States Person" within the meaning of
U.S. tax laws, means a citizen or resident of the United States, any former U.S.
citizen subject to Section 877 of the Internal Revenue Code, any corporation, or
partnership organized or existing under the laws of the United States of America
or any state, jurisdiction, territory or possession thereof and any estate or
trust the income of which is subject to U.S. federal income tax irrespective of
its source, and within the meaning of U.S. securities laws, as defined in Rule
902(o) of Regulation S, means:
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(i) any natural person resident in the United States; (ii) any partnership or
corporation organized or incorporated under the laws of the United States; (iii)
any estate of which any executor or administrator is a U.S. person; (iv) any
trust of which any trustee is a U.S. person; (v) any agency or branch of a
foreign entity located in the United States; (vi) any non-discretionary account
or similar account (other than an estate or trust) held by a dealer or other
fiduciary for the benefit or account of a U.S. person; (vii) any discretionary
account or similar account (other than an estate or trust) held by a dealer or
other fiduciary organized, incorporated, or (if an individual) resident in the
United States; and (viii) any partnership or corporation if organized under the
laws of any foreign jurisdiction, and formed by a U.S. person principally for
the purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a)) who are not natural persons, estates or trusts.
There have been no issuances of preferred stock.
Issuer Purchases of Equity Securities
-----------------------------------------
We did not repurchase any of our equity securities during the years ended August
31, 2009 or 2008.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Our Current Business
----------------------
RESULTS OF OPERATIONS
The following is a discussion and analysis of our results of operation for the
years ended August 31, 2009 and 2008, and the period of September 27, 2006
(Inception) to August 31, 2009 and the factors that could affect our future
financial condition. This discussion and analysis should be read in conjunction
with our audited financial statements and the notes thereto included elsewhere
in this annual report. Our financial statements are prepared in accordance with
United States generally accepted accounting principles. All references to dollar
amounts in this section are in United States dollars unless expressly stated
otherwise.
Year Ended August 31,
September 27, 2006
(Inception) to August
2009 2008 31, 2009
--------------- ---------------- ----------------------
Revenue $ - $ - $ -
Operating Expenses (28,587) (60,154) (92,721)
Other Expenses (843) (101) (944)
Income from Discontinued Operations 1,544 1,308 2,852
--------------- ---------------- ----------------------
Net Loss $ (27,886) $ (58,947) $ (90,813)
=============== ================ ======================
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Revenue
-------
Our gross revenue for the years ended August 31, 2009 and 2008 was $0 and $0
since the company decided to discontinue the tea business. Revenues and
associated costs from the tea business are shown as income from discontinued
operations.
Operating Costs and Expenses
-------------------------------
The major components of our expenses for the years ended August 31, 2009 and
2008, and for the period from September 27, 2006 (Inception) through August 31,
2009, are outlined in the table below:
Year Ended August 31,
September 27, 2006
(Inception) to August
2009 2008 31, 2009
------------- -------------- ------------------------
Accounting and audit fees $ 15,325 $ 14,100 $ 32,925
Consulting 5,544 13,400 18,944
General and administrative 4,455 20,778 25,233
Management 3,000 2,000 5,000
Organization costs - - 480
Telephone - 2,174 2,174
Travel and promotion 263 7,702 7,965
Total operating expenses $ 28,587 $ 60,154 $ 92,721
Operating Expenses
The decrease our operating costs for the year ended August 31, 2009, compared to
the year ended August 31, 2008, was due to the decrease in general and
administrative costs, consulting fees, travel expenses. All these decreases are
associated with the change in activities and related to implementation of our
business plan.
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Liquidity and Capital Resources
Working Capital
--------------------------------
Year Ended August 31,
2009 2008
------------------ --------------------
Current Assets $ - $ 3,324
Current Liabilities 56,813 32,584
------------------ --------------------
Working Capital Deficiency $ (56,813) $ (29,260)
================== ====================
Cash Flows
--------------------------------
Year Ended August 31,
September 27, 2006
(Inception) to
2009 2008 August 31, 2009
------------------ -------------------- ------------------
Cash used in Operating
Activities $ (5,776) $ (42,067) $ (47,843)
Cash Used in Investing
Activities - - -
Cash Provided by Financing
Activities 5,742 42,101 47,843
------------------ -------------------- ------------------
Net Change in Cash $ (34) $ 34 $ -
================== ==================== ==================
We had cash of $0, accounts receivable of $0, accounts payable and accrued
liabilities of $42,970 and loan payable of $13,843 for a working capital
deficiency of $56,813 as of August 31, 2009. Further, we had cash of $34,
accounts receivable of $2,940, accounts payable and accrued liabilities of
$24,483 and a loan payable of $8,101 for a working capital deficiency of $29,260
as of August 31, 2008.
Cash Used In Operating Activities
-------------------------------------
We used cash in operating activities in the amount of $5776 and $42,067 during
the years ended August 31, 2009 and 2008 and $47,843 during the period of
inception to August 31, 2009. Cash used in operating activities was funded by
cash from financing activities.
Cash From Investing Activities
---------------------------------
No cash was used or provided in investing activities during the years ended
August 31, 2009 or 2008 or the period of inception to August 31, 2009.
Cash from Financing Activities
---------------------------------
To August 31, 2009, the Company has mostly funded its initial operations through
the issuance of 7,000,000 shares of capital stock for proceeds of $34,000. The
Company has also received a related party loan of $5,000 and $8,000 during the
years ended August 31, 2009 and 2008 for a total of $13,000 from the date of
inception to August 31, 2009. Accrued interest on this loan amounts to $843 as
of August 31, 2009.
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Due to the "start up" nature of our business, we expect to incur losses as it
expands. To date, our cash flow requirements have been primarily met by equity
financings. Management expects to keep operating costs to a minimum until cash
is available through financing or operating activities. Management plans to
continue to seek other sources of financing on favorable terms; however, there
are no assurances that any such financing can be obtained on favorable terms, if
at all. If we are unable to generate sufficient profits or unable to obtain
additional funds for our working capital needs, we may need to cease or curtail
operations. Furthermore, there is no assurance the net proceeds from any
successful financing arrangement will be sufficient to cover cash requirements
during the initial stages of the Company's operations. For these reasons, our
auditors believe that there is substantial doubt that we will be able to
continue as a going concern.
Going Concern
--------------
The audited financial statements for the years ended August 31, 2009 and 2008
with cumulative totals from inception, included in this annual report, have been
prepared on a going concern basis, which implies that our company will continue
to realize its assets and discharge its liabilities and commitments in the
normal course of business. Our company has generated $0 in revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate substantial earnings in the immediate or foreseeable future. The
continuation of our company as a going concern is dependent upon the continued
financial support from our shareholders, the ability of our company to obtain
necessary equity financing to achieve our operating objectives, and the
attainment of profitable operations. As at August 31, 2009, our company has
accumulated losses of $90,813 since inception. As we do not have sufficient
funds for our planned operations, we will be required to raise additional funds
for operations.
Due to the uncertainty of our ability to meet our current operating expenses and
the capital expenses noted above, in their report on the annual financial
statements for the year ended August 31, 2009, our independent auditors included
an explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent
auditors.
The continuation of our business is dependent upon us raising additional
financial support. The issuance of additional equity securities by us could
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.
Future Financings
------------------
We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund our marketing plan and operations. At
this time, we cannot provide investors with any assurance that we will be able
to raise sufficient funding from the sale of our common stock or through a loan
from our directors to meet our obligations over the next twelve months. We do
not have any arrangements in place for any future equity financing.
Off-Balance Sheet Arrangements
--------------------------------
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
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ITEM 8. FINANCIAL STATEMENTS
INNOCENT, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
August 31, 2009 and 2008
BALANCE SHEET
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
STATEMENTS OF STOCKHOLDERS' EQUITY
NOTES TO FINANCIAL STATEMENTS
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INNOCENT, INC.
(A Development Stage Company)
Financial Statements
August 31, 2009 and 2008
CONTENTS
Page(s)
=======
Report of Independent Registered Public Accounting Firm F-1
Balance Sheets as of August 31, 2009 and 2008 F-2
Statements of Operations for the years ended August 31, 2009
and 2008 and the period of September 27, 2006 (Inception) to
August 31, 2009 F-3
Statement of Changes in Stockholders' Deficit cumulative from
September 27, 2006 (inception) to August 31, 2009 F-4
Statement of Cash Flows for the years ended August 31, 2009
and 2008 and the period of September 27, 2006 (Inception) to
August 31, 2009 F-5
Notes to the Financial Statements F6 - F11
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Innocent, Inc.
We have audited the accompanying balance sheets of Innocent, Inc. (a development
stage company) (the Company) as of August 31, 2009 and 2008, and the related
statements of operations, changes in stockholders' equity, and cash flows for
the years then ended, and the period September 27, 2006 (inception) through
August 31, 2009. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Innocent, Inc. as of August 31,
2009 and 2008, and the results of its operations and cash flows for the years
then ended, and the period from September 27, 2006 (inception) through August
31, 2009, in conformity with accounting principles generally accepted in the
United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in financial statement Note 2,
the Company has incurred losses since inception, and has not engaged in any
operations. This raises substantial doubt about the Company's ability to meet
its obligations and to continue as a going concern. Management's plans in regard
to this matter are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ EddyChin, Chartered Accountant
Eddy Chin, Chartered Accountant
Thornhill, Ontario
December 22, 2009
F-1
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INNOCENT, INC.
(A Development Stage Company)
Balance Sheets
August 31
2009 2008
------------- ---------------
ASSETS
Current assets
Cash $ - $ 34
Accounts receivable - 2,940
Prepaid expenses - 350
------------- ---------------
Total current assets - 3,324
------------- ---------------
Security deposit - 333
------------- ---------------
Total assets $ - $ 3,657
============= ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities $ 42,970 $ 24,483
Loan payable - related party 13,843 8,101
------------- ---------------
Total current liabilities 56,813 32,584
------------- ---------------
Stockholders' Deficit
Common stock, $.001 par value; 75,000,000 shares authorized; 7,000,000
issued and outstanding 7,000 7,000
Additional paid in capital 27,000 27,000
Deficit accumulated during the development stage (90,813) (62,927)
------------- ---------------
Total stockholders' deficit (56,813) (28,927)
------------- ---------------
Total liabilities and stockholders' deficit $ - $ 3,657
============= ===============
See accompanying notes to financial statements
F-2
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INNOCENT, INC.
(A Development Stage Company)
Statements of Operations
Year ended August 31,
September 27,
2006 (inception)
to August 31,
2009 2008 2009
------------------ ------------------- ------------------
Revenues $ - $ - $ -
------------------ ------------------- ------------------
Operating expenses
Professional fees 23,869 43,542 56,869
Travel and promotion 263 7,702 7,965
Other general & administrative 4,456 8,910 27,888
------------------ ------------------- ------------------
Total operating expenses 28,587 60,154 92,721
------------------ ------------------- ------------------
Loss from operations (28,587) (60,154) (92,721)
Other expense
Interest expense (843) (101) (944)
------------------ ------------------- ------------------
Total other expense (843) (101) (944)
------------------ ------------------- ------------------
Loss from continuing operations (29,430) (60,255) (93,665)
Income from discontinued operations 1,544 1,308 2,852
Net loss $ (27,886) $ (58,947) $ (90,813)
================== =================== ==================
Basic and diluted loss per common share $ (0.00) $ (0.01)
================== ===================
Weighted average shares outstanding 7,000,000 5,824,658
================== ===================
See accompanying notes to financial statements
F-3
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INNOCENT, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
Period of September 27, 2006 (Inception) to August 31, 2009
Common Stock Additional
---------------- Paid-in Subscription Accumulated
Shares Amount Capital Receivable Deficit Total
--------- ------ ---------- ------------ ----------- ---------
Balance, September 27, 2006 (Inception) - $ - $ - $ - $ - $ -
Common stock subscription, $0.001 4,000,000 4,000 (4,000) - -
Net loss for period ended August 31, 2007 - - - (3,980) (3,980)
--------- ------ ---------- ------------ ----------- ---------
Balance, August 31, 2007 4,000,000 4,000 - (4,000) (3,980) (3,980)
Collection of subscription receivable - - - 4,000 - 4,000
Common stock issued for cash, $0.01 per share, October 2007 3,000,000 3,000 27,000 - - 30,000
Net loss for the year ended August 31, 2008 - - - (58,947) (58,947)
--------- ------ ---------- ------------ ----------- ---------
Balance, August 31, 2008 7,000,000 7,000 27,000 - (62,927) (28,927)
Net loss for the year ended August 31, 2009 - - - - (27,886) (27,886)
--------- ------ ---------- ------------ ----------- ---------
Balance, August 31, 2009 7,000,000 $7,000 $27,000 $ - $(90,813) $(56,813)
See accompanying notes to financial statements
F-4
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INNOCENT, INC.
(A Development Stage Enterprise)
Statements of Cash Flows
September
Year ended August 31, 27, 2006
(inception) to
August 31,
2009 2008 2009
-------------- -------------- ----------------
Cash flows from operating activities
Net loss $ (27,886) $ (58,947) $ (90,813)
Adjustments to reconcile net loss to net cash used in
operating activities
Accounts receivable 2,940 (2,940) -
Prepaid expenses 350 (350) -
Security deposit 333 (333) -
Accounts payable and accrued liabilities 18,487 20,503 42,970
-------------- -------------- ----------------
Net cash used in operating activities (5,776) (42,067) (47,843)
-------------- -------------- ----------------
Cash flows from investing activities - - -
-------------- -------------- ----------------
Cash flows from financing activities
Loan payable - related party 5,742 8,101 13,843
Proceeds from sale of stock - 34,000 34,000
-------------- -------------- ----------------
Net cash provided by financing activities 5,742 42,101 47,843
-------------- -------------- ----------------
Net change in cash (34) 34 -
Cash at beginning of period 34 - -
-------------- -------------- ----------------
Cash at end of period $ - $ 34 $ -
============== ============== ================
Supplemental cash flow Information:
Cash paid for interest $ - $ - $ -
============== ============== ================
Cash paid for income taxes $ - $ - $ -
============== ============== ================
See accompanying notes to financial statements
F-5
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 1 - Nature of Business
Innocent, Inc. ("Company") was organized September 27, 2006 under the laws of
the State of Nevada for the purpose of selling new food products produced or
developed by North American companies to foreign markets. On August 31, 2009,
the Company discontinued its involvement in the sales of tea due to a strategic
change in business focus by the acquisition of mineral rights as disclosed in
the Company's 8-K filed with the SEC on September 2, 2009. The Company currently
has limited operations or realized revenues from its planned principle business
purpose and, in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," is
considered a Development Stage Enterprise.
Note 2 - Significant Accounting Policies
Estimates
---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash
----
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of August 31, 2009 or 2008.
Income taxes
-------------
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes," and clarified by FIN
48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB
Statement No. 109." A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax basis. 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 effect of changes in tax laws
and rates on the date of enactment.
F-6
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 2 - Significant Accounting Policies (continued)
Share Based Expenses
----------------------
The Company follows Financial Accounting Standards Board ("FASB") SFAS No. 123R
"Share Based Payment." This statement is a revision to SFAS 123 and supersedes
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees," and amends FASB Statement No. 95, "Statement of Cash Flows." This
statement requires a public entity to expense the cost of employee services
received in exchange for an award of equity instruments. This statement also
provides guidance on valuing and expensing these awards, as well as disclosure
requirements of these equity arrangements. The Company adopted SFAS No. 123R
upon creation of the company and expenses share based costs in the period
incurred.
Going concern
--------------
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company has minimal cash and no material
assets, nor does it have operations or a source of revenue sufficient to cover
its operation costs and allow it to continue as a going concern. The Company
will be dependent upon the raising of additional capital through placement of
our common stock in order to implement its business plan, or merge with an
operating company. There can be no assurance that the Company will be
successful in either situation in order to continue as a going concern. The
officers and directors have committed to advancing certain operating costs of
the Company.
Recent Accounting Pronouncements
----------------------------------
In October 2009, the FASB approved for issuance Emerging Issues Task Force
("EITF") issue 08-01, "Revenue Arrangements with Multiple Deliverables." This
statement provides principles for allocation of consideration among its
multiple-elements, allowing more flexibility in identifying and accounting for
separate deliverables under an arrangement. The EITF introduces an estimated
selling price method for valuing the elements of a bundled arrangement if
vendor-specific objective evidence or third-party evidence of selling price is
not available, and significantly expands related disclosure requirements. This
standard is effective on a prospective basis for revenue arrangements entered
into or materially modified in fiscal years beginning on or after June 15, 2010.
Alternatively, adoption may be on a retrospective basis, and early application
is permitted. The Company does not expect the adoption of this statement to have
a material effect on its consolidated financial statements or disclosures.
F-7
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 2 - Significant Accounting Policies (continued)
Recent Accounting Pronouncements (continued)
-----------------------------------------------
In August 2009, the FASB issued Accounting Standards Update No. 2009-05,
"Measuring Liabilities at Fair Value," ("ASU 2009-05"). ASU 2009-05 provides
guidance on measuring the fair value of liabilities and is effective for the
first interim or annual reporting period beginning after its issuance. The
Company's adoption of ASU 2009-05 did not have an effect on its disclosure of
the fair value of its liabilities.
On June 12, 2009 the FASB issued two statements that amended the guidance for
off-balance-sheet accounting of financial instruments: SFAS No. 166, "Accounting
for Transfers of Financial Assets," and SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R)." SFAS No. 166 revises SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
and will require entities to provide more information about sales of securitized
financial assets and similar transactions, particularly if the seller retains
some risk to the assets, the FASB said. The statement eliminates the concept of
a qualifying special-purpose entity, changes the requirements for the
de-recognition of financial assets, and calls upon sellers of the assets to make
additional disclosures about them.
SFAS No. 167 amends FASB Interpretation (FIN) No. 46(R), "Consolidation of
Variable Interest Entities," by altering how a company determines when an entity
that is insufficiently capitalized or not controlled through voting should be
consolidated, the FASB said. A company has to determine whether it should
provide consolidated reporting of an entity based upon the entity's purpose and
design and the parent company's ability to direct the entity's actions. SFAS
Nos. 166 and 167 will be effective at the start of the first fiscal year
beginning after November 15, 2009, which will mean January 2010 for companies
that are on calendar years.
Note 3 - Stockholders' Equity
Common stock
-------------
The authorized common stock of the Company consists of 75,000,000 shares with
par value of $0.001. During the period from September 27, 2006 (inception) to
November 30, 2008, the Company issued 4,000,000 shares of its $.001 par common
stock to its directors for total cash proceeds of $4,000. Additionally, the
Company issues 3,000,000 shares of its common stock for a total cash
consideration of $30,000.
F-8
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 3 - Stockholders' Equity (continued)
Common stock (continued)
--------------------------
The Company has not granted any stock options or recorded stock based
compensation since its inception on September 27, 2006.
Net loss per common share
-----------------------------
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised. Basic net loss per common share is based
on the weighted average number of shares of common stock outstanding during the
period ended September 30, 2009.
Note 4 - Income Taxes
We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. Per Statement of Accounting Standard No. 109 "Accounting
for Income Tax and FASB Interpretation No. 48 - Accounting for Uncertainty in
Income Taxes an interpretation of FASB Statement No.109," when it is more likely
than not that a tax asset cannot be realized through future income the Company
must allow for this future tax benefit. We provided a full valuation allowance
on the net deferred tax asset, consisting of net operating loss carryforwards,
because management has determined that it is more likely than not that we will
not earn income sufficient to realize the deferred tax assets during the
carryforward period.
The Company has not taken a tax position that, if challenged, would have a
material effect on the financial statements for the year ended September 30,
2009, applicable under FIN 48. As a result of the adoption of FIN 48, we did
not recognize any adjustment to the liability for uncertain tax position and
therefore did not record any adjustment to the beginning balance of accumulated
deficit on the balance sheet.
F-9
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 4 - Income Taxes (continued)
The component of the Company's deferred tax asset as of August 31, 2009 and 2008
is as follows:
2009 2008
--------------- -----------------
Net operating loss carry forward $ 89,692 $ 62,927
Valuation allowance (89,692) (62,927)
--------------- -----------------
Net deferred tax asset $ - $ -
=============== =================
A reconciliation of income taxes computed at the 35% statutory rate to the
income tax recorded is as follows:
2009 2008
--------------- ---------------
Tax at statutory rate (35%) $ 31,392 $ 22,024
Increase in valuation allowance (31,392) (22,024)
--------------- ---------------
Net deferred tax asset $ - $ -
=============== ===============
The Company did not pay any income taxes during the years ended August 31, 2009
or 2008
The net federal operating loss carry forward will expire in 2027. This carry
forward may be limited upon the consummation of a business combination under IRC
Section 381.
Note 5 - Related Party Transactions
The President of the Company provides management services to the Company.
During the year ended August 31, 2009 management services of $3,000 were charged
to operations. A director of the Company provides consulting services to the
Company. During the year ended August 31, 2009 consulting services of $2,000
were charged to operations.
During the period from inception to August 31, 2009, a director of the Company
provided a $13,000 loan to the Company in regular installments. The loan bears
interest at 6.75% per annum, is payable on demand and as such is included in
current liabilities. The principal balance of the loan was $8,000 and $13,000
with $101 and $843 of accrued interest payable as of August 31, 2008 and 2009
F-10
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INNOCENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2009 and 2008
Note 6 - Change in Registered Accounting Firm
The Company's August 31, 2007 financial statements as filed in its S-1
registration statement on April 3, 2008 were audited by Moore & Associates
Chartered. These financial statements have been audited by Eddy Chin, Chartered
Accountant ("Registered Firm"). The Registered Firm has not audited the
Company's balance sheet or statement of operations and statement of cash flows
for the period ended August 31, 2007. The Company believes this period is
presented accurately and no restatement is necessary.
Note 7 - Warrants and Options
There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company
Note 8 - Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through
December 22, 2009 and determined there are no events to disclose.
F-11
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
------------------------------------
We evaluated the effectiveness of our disclosure controls and procedures as of
the end of the 2009 fiscal year. This evaluation was conducted with the
participation of our chief executive officer and our principal accounting
officer.
Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to be disclosed in the reports we
file pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.
Limitations on the Effective of Controls
---------------------------------------------
Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs. These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control. A design
of a control system is also based upon certain assumptions about potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
-----------
Based upon their evaluation of our controls, the chief executive officer and
principal accounting officer have concluded that, subject to the limitations
noted above, the disclosure controls are effective providing reasonable
assurance that material information relating to us is made known to management
on a timely basis during the period when our reports are being prepared. There
were no changes in our internal controls that occurred during the quarter
covered by this report that have materially affected, or are reasonably likely
to materially affect our internal controls.
15
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages as of the date of
this annual report are as follows:
Executive Officers and Directors:
-----------------------------------------------------------------------------
Name Age Position
-----------------------------------------------------------------------------
Wayne A Doss 56 President, Chief Executive
and Director
ENRIQUE J. L'PEZ de MESA 45 Director
The directors will serve as directors until our next annual shareholder meeting
or until a successor is elected who accepts the position. Directors are elected
for one-year terms. Officers hold their positions at the will of the Board of
Directors, absent any employment agreement. There are no arrangements,
agreements or understandings between non-management shareholders and management
under which non-management shareholders may directly or indirectly participate
in or influence the management of Innocent's affairs.
CODE OF ETHICS
We have not yet adopted a code of ethics that applies to our principal executive
officers, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, since we have been focusing
our efforts on obtaining financing for the company. We expect to adopt a code by
the end of the current fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of our common stock. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us, or
written representations from certain reporting persons, we believe that all
filing requirements applicable to our officers, directors and greater than ten
percent beneficial owners were complied.
16
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ITEM 11: EXECUTIVE COMPENSATION
The following summary compensation table sets forth information concerning
compensation for services rendered in all capacities during 2009 and 2008
awarded to, earned by or paid to our executive officers.
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS
2009 2008
Wayne A. Doss, Chief Executive Officer None
Vera Barinova,Chief Executive Officer thru August 12, 2009 $ 3,000.00 $ 2,000.00
Aleksandr Kryukov, Chief Financial Officer thru August 12, 2009 None $ 3,400.00
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
None
On September 1, 2009 Wayne A. Doss President and CEO, was issued 3,000,000
shares of rule 144 restricted common stock for services.
DIRECTOR COMPENSATION TABLE FOR FISCAL 2009
Wayne A. Doss, Chief Executive Officer None
Option Grants in 2009
------------------------
No options were granted during 2009 or 2008.
Aggregated Option Exercises in 2009 and 2009 Year-End Option Values
----------------------------------------------------------------------------
No options were exercised by our Officers or Directors during 2009 or 2008.
Stock Incentive Plan - Awards in 2009
-------------------------------------------
During 2009 or 2008, no shares, options or other rights were granted to any of
our employees or Officers.
17
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Director Compensation
----------------------
No options were granted or payments made in compensation for services rendered
to any Innocent directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of
our shares of common stock at December 22, 2009, by (i) each person known by us
to be the beneficial owner of more than 5% of our outstanding shares of common
stock, (ii) each of our directors, (iii) our executive officers, and (iv) by all
of our directors and executive officers as a group. Each person named in the
table, has sole voting and investment power with respect to all shares shown as
beneficially owned by such person and can be contacted at our executive office
address.
--------------------------------------------------------------------------------
Amount and
Nature of
Title of Class Name of Beneficial Percent of
Owner Ownership Class
(1) (%)
--------------------------------------------------------------------------------
Common Wayne A. Doss 3,000,000 10%
President, CEO
--------------------------------------------------------------------------------
The percent of class is based on 30,000,000 shares of common stock issued and
outstanding as of the date of this annual report.
The Company has no securities authorized for issuance under equity compensation
plans.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
During the fiscal year ended August 31, 2009:
a)The President of the Company provides management services to the Company.
During the year ended August 31, 2009 management services of $3,000 (August 31,
2008 - $2,000) were charged to operations.
b) A director of the Company provides consulting services to the Company. During
the year ended August 31, 2009 consulting services of $Nil (August 31, 2008 -
$3,400) were charged to operations.
18
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c) During the year ended August 31, 2009, the President of the Company provided
a $5,000 loan to the Company. This is in addition to the $8,000 loan provided
during the year ended August 31, 2008. The loan is payable on demand, unsecured,
bears interest at 6.75% per annum and consists of $13,000 and $8,000 of
principal, and $843 and $101 of accrued interest payable as of August 31, 2009
and 2008.
Otherwise, no director and officer, nor any proposed nominee for election as a
director, nor any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all of our outstanding
shares, nor any promoter, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any transaction since
our incorporation or in any presently proposed transaction which, in either
case, has or will materially affect us.
Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between our business and their other business interests. In the event that a
conflict of interest arises at a meeting of our directors, a director who has
such a conflict will disclose his interest in a proposed transaction and will
abstain from voting for or against the approval of such transaction.
Director Independence
----------------------
Our common stock is quoted on the OTC bulletin board interdealer quotation
system, which does not have director independence requirements. Under NASDAQ
rule 4200(a)(15), a director is not considered to be independent if he or she is
also an executive officer or employee of the corporation. Our director, Wayne
Doss, is also our chief executive officer and chief financial officer. As a
result, we do not have any independent directors. As a result of our limited
operating history and limited resources, our management believes that we will
have difficulty in attracting independent directors. In addition, we would be
likely be required to obtain directors and officers insurance coverage in order
to attract and retain independent directors. Our management believes that the
costs associated with maintaining such insurance is prohibitive at this time.
19
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Our principal accountants, Eddy Chin, Chartered Accountant was retained in
December 2009 so no fees were included in August 31 year end and $10,000 will be
reflected in the first quarter 2010.) Moore & Associates, Chartered Accountants
and Advisors (2008 and 2007), billed the following fees for the services
indicated:
Year Ended August 31,
Period ended
August 31,
2009 2008 2007
------------- -------------
Audit fees $ $ 10,500 $ 3,500
Audit-related fees - -
Tax fees - -
All other fees - -
------------- ------------- --------------
Total fee $ - $ 10,500 $ 3,500
============= ============= ==============
Audit fees consist of fees related to professional services rendered in
connection with the audit of our annual financial statements. All other fees
relate to professional services rendered in connection with the review of the
quarterly financial statements.
Our policy is to pre-approve all audit and permissible non-audit services
performed by the independent accountants. These services may include audit
services, audit-related services, tax services and other services. Under our
audit committee's policy, pre-approval is generally provided for particular
services or categories of services, including planned services, project based
services and routine consultations. In addition, the audit committee may also
pre-approve particular services on a case-by-case basis. Our audit committee
approved all services that our independent accountants provided to us in the
past two fiscal years.
PART IV
ITEM 15. EXHIBITS
(a) The following exhibits are included as part of this report:
Exhibit
Number Title of Document
------ -----------------
23.1 Consent of Independent Registered Public Accounting Firm
31.1 Sec.302 Certification of CEO
32.1 Sec.906 Certification of CEO
20
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*Incorporated by reference to similarly numbered exhibits filed with the
Company's Registration Statement on Form S-1 on April 3, 2008.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
December 29, 2009 Innocent, Inc.
/s/ Wayne A Doss
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Wayne A Doss President, Chief Executive
Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ Wayne A Doss
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Wayne A. Doss
President, Chief Executive
Officer, and Director
Dated: December 29, 2009
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