Exhibit 99
PROSPECTUS
Innocap, Inc..
5675B Baldwin Court
Norcross, GA. 30071
Telephone: (770) 378-4180
2004 Non-Statutory Stock Option Plan, dated January 27, 2004
Shares Of Common Stock, $.001 Par Value
This Prospectus relates to the Innocap, Inc. 2004 Non-Statutory Stock Option
Plan, dated January 27, 2004 (the "Stock Option Plan"), pursuant to which
officers, directors, attorneys, consultants, other advisors and other employees
of Innocap, Inc. (the "Company") and its Affiliates are eligible to receive
shares of Common Stock of the Company (the "Stock Option Shares") in
consideration for their past services. Participants in the Stock Option Plan may
make payment for the Stock Option Shares either (i) in cash, represented by bank
or cashier's check, certified check or money order (ii) in lieu of payment for
bona fide services rendered, and such services were not in connection with the
offer or sale of securities in a capital-raising transaction, (iii) by
delivering shares of the Company's Common Stock which have been beneficially
owned by the optionee, the optionee's spouse, or both of them for a period of at
least six (6) months prior to the time of exercise (the "Delivered Stock") in a
number equal to the number of Stock Option Shares being purchased upon exercise
of the Option or (iv) by delivery of shares of corporate stock which are freely
tradeable without restriction and which are part of a class of securities which
has been listed for trading on the NASDAQ system or a national securities
exchange, with an aggregate fair market value equal to or greater than the
exercise price of the Stock Option Shares being purchased under the Option, or
(v) a combination of cash, services, Delivered Stock or other corporate shares.
Since the sale of any securities of the Company by "affiliates" of the Company
may not be made without compliance with the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or an exemption therefrom (such as that provided by Rule 144 thereunder), the
Company plans to advise those participants in the Stock Option Plan who may be
"affiliates" of the Company, as such term is defined in Rule 144, (the Company
and such participants not so conceding) that any such sales by participants who
are not "affiliates" of the Company may be effected without compliance with the
registration and prospectus delivery requirements of the Act.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is January 27, 2004
A copy of any document or part thereof incorporated by reference in the
Registration Statement or any other documents required to be delivered to
participants pursuant to Rule 428(b) of the Securities Act but not delivered
with this Prospectus will be furnished without charge upon written request.
Requests should be addressed to: 2004 Non-Statutory Stock Option Plan, Innocap,
Inc., 5675B Baldwin Court, Norcross, GA. 30071, Telephone: (770) 417-1664.
The Company is subject to the informational requirements of the Exchange Act and
in accordance therewith files, reports and other information with the Securities
and Exchange Commission. The reports and other information filed by the Company
can be inspected at the public reference facilities maintained by the Commission
in Washington, D.C., 450 Fifth Street, Washington, D.C. 20549; the Midwest
Regional Office, Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; the Pacific Regional Office, 5670 Wilshire Blvd., 11th
Floor, Los Angeles, California 90036-3648; and the New York Office, 233
Broadway, New York, New York 10279. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates. Additionally, our SEC filings are available to the public via
the internet at the SEC's website at www.sec.gov.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer or solicitation by anyone in any state in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
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TABLE OF CONTENTS
The Company................................................................13
General Information Regarding The 2004 Non-Statutory Stock Option Plan.....15
The Employers..............................................................15
Purposes...................................................................15
Period of Stock Option Plan................................................15
Administration.............................................................15
Reorganizations and Recapitalizations of the Company.......................15
Securities To Be Offered...................................................16
Eligible Participants......................................................17
Purchase Of Securities Pursuant To The Stock Option Plan...................17
Consideration for Shares Issued Under the Stock Option Plan................17
Exercise Period and Termination............................................18
Option Price...............................................................18
Transferability............................................................18
Assignability..............................................................19
Amendments.................................................................19
Tax Effects Of Stock Option Plan Participation.............................20
Tax Treatment to the Participants..........................................20
Federal Income Tax Treatment of Nonqualified Stock Options.................20
Restrictions On Resale Of Common Stock.....................................20
Legal Matters..............................................................21
Indemnification Of Officers And Directors..................................21
Incorporation Of Certain Documents By Reference............................22
Further Information........................................................22
Exhibit A - 2004 Non-Statutory Stock Option Plan dated January 27, 2004
The Company
Innocap, Inc. intends to be a closed-end management investment company
following our filing of a notice of election to be regulated as a business
development company under the Investment Company Act of 1940. We were
incorporated on January 23, 2004 and have not conducted any operations to date.
We have been organized to provide investors with the opportunity to participate
with a modest amount in venture capital investments that are generally not
available to the public and that typically require substantially larger
financial commitments. In addition, we will provide professional management and
administration that might otherwise be unavailable to investors if they were to
engage directly in venture capital investing. We have decided to be regulated as
a business development company under the 1940 Act, and will operate as a
non-diversified company as that term is defined in Section 5(b)(2) of the 1940
Act.
As a business development company, we are required to invest at least
70% of our total assets in qualifying assets, which, generally, are securities
of private companies or securities of public companies whose securities are not
eligible for purchase on margin (which includes many companies with thinly
traded securities that are quoted in the pink sheets or the NASD Electronic
Quotation Service). We must also offer to provide significant managerial
assistance to these portfolio companies. Qualifying assets may also include:
o cash,
o cash equivalents,
o U.S. Government securities, or
o high-quality debt investments maturing in one year or less from
the date of investment.
We may invest a portion of the remaining 30% of our total assets in debt and/or
equity securities of companies that may be larger than target portfolio
companies.
Nature of a BDC
The 1940 Act defines a BDC as a closed-end management investment
company that provides small businesses that qualify as an eligible portfolio
company with investment capital and also significant managerial assistance. A
BDC is required under the 1940 Act to invest at least 70% of its total assets in
qualifying assets consisting of:
o eligible portfolio companies as defined in the 1940 Act and
o certain other assets including cash and cash equivalents.
An eligible portfolio company generally is a United States company that
is not an investment company and that:
o does not have a class of securities registered on an exchange
or included in the Federal Reserve Board's over-the-counter
margin list;
o is actively controlled by a BDC and has an affiliate of a BDC
on its board of directors; or
o meets such other criteria as may be established by the SEC.
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Control under the 1940 Act is presumed to exist where a BDC owns more than 25%
of the outstanding voting securities of the eligible portfolio company.
An example of an eligible portfolio company is a new start up company
or a privately owned company that has not yet gone public by selling its shares
in the open market and has not applied for having its shares listed on a
nationally recognized exchange such as the NYSE, the American Stock Exchange, or
the National Association of Securities Dealers' Automated Quotation System,
National Market System. An eligible portfolio company can also be one which is
subject to filing, has filed, or has recently emerged from reorganization
protection under Chapter 11 of the Bankruptcy Act.
A BDC may invest the remaining 30% of its total assets in
non-qualifying assets, including companies that are not eligible portfolio
companies. The foregoing percentages will be determined, in the case of
financings in which a BDC commits to provide financing prior to funding the
commitment, by the amount of the BDC's total assets represented by the value of
the maximum amount of securities to be issued by the borrower or lessee to the
BDC pursuant to such commitment.
As a BDC, we must invest at least 70% of our total assets in qualifying
assets.
Strategy
We will have significant relative flexibility in selecting and structuring our
investments. We will not be subject to many of the regulatory limitations that
govern traditional lending institutions such as banks. We will seek to structure
our investments so as to take into account the uncertain and potentially
variable financial performance of our portfolio companies. This should enable
our portfolio companies to retain access to committed capital at different
stages in their development and eliminate some of the uncertainty surrounding
their capital allocation decisions. We will calculate rates of return on
invested capital based on a combination of up-front commitment fees, current and
deferred interest rates and residual values, which may take the form of common
stock, warrants, equity appreciation rights or future contract payments. We
believe that this flexible approach to structuring investments will facilitate
positive, long-term relationships with our portfolio companies and enable us to
become a preferred source of capital to them. We also believe our approach
should enable debt financing to develop into a viable alternative capital source
for funding the growth of target companies that wish to avoid the dilutive
effects of equity financings for existing equity holders.
For further and more specific information regarding the Company's
business activities and proposed activities reference is herewith made to the
Company's: (i) Form 10-SB as amended to date, and in particular (but not limited
to) Part I, Item 1 "Description of Business" thereof ; and (ii) any '34 Exchange
Act filings with the SEC.
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General Information Regarding The 2004 Non-Statutory Stock Option Plan
The Employers The Company has its principal executive offices located at
5675B Baldwin Court, Norcross, GA. 30071, Telephone: (770) 417-1664
Purposes The Stock Option Plan was adopted by the Board of Directors of
the Company on January 27, 2004 and subsequently approved by the consent of the
requisite shareholders on January 27, 2004 and is intended as an employment
incentive, to aid in attracting and retaining in the employ or service of the
Company and any Affiliated Corporation, persons of experience and ability and
whose services are considered valuable, to encourage the sense of proprietorship
in such persons, and to stimulate the active interest of such persons in the
development and success of the Company.
Period of Stock Option Plan. The Stock Option Plan shall expire on January 26,
2014 except as to Nonqualified Stock Options then outstanding, which shall
remain in effect until they have expired or been exercised.
Administration. The Company's Board of Directors ("Board") may appoint and
maintain as administrator of the Stock Option Plan, the Compensation Committee
(the "Committee") of the Board which shall consist of at least three members of
the Board. Until such time as the Committee is duly constituted, the Board
itself shall have and fulfill the duties herein allocated to the Committee. The
Committee shall have full power and authority to designate Stock Option Plan
participants, to determine the provisions and terms of respective Options (which
need not be identical as to number of shares covered by any Option, the method
of exercise as related to exercise in whole or in installments, or otherwise,
including the Option price) and to interpret the provisions and supervise the
administration of the Stock Option Plan. The Committee may, in its discretion,
provide that certain Options not vest (that is, become exercisable) until
expiration of a certain period after issuance or until other conditions are
satisfied, so long as not contrary to the Stock Option Plan.
A majority of the members of the Committee shall constitute a quorum. All
decisions and selections made by the Committee pursuant to the Stock Option
Plan's provisions shall be made by a majority of its members. Any decision
reduced to writing and signed by all of the members shall be fully effective as
if it had been made by a majority at a meeting duly held. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it deems advisable. If at any time the Board shall consist
of seven or more members, then the Board may amend the Stock Option Plan to
provide that the Committee shall consist only of Board members who shall not
have been eligible to participate in the Stock Option Plan (or similar stock or
stock option plan) of the Company or its affiliates at any time within one year
prior to appointment to the Committee.
Reorganizations and Recapitalizations of the Company
a. The existence of the Stock Option Plan and Options granted thereunder
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any and all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger
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or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale,
exchange or transfer of all or any part of its assets or business, or any other
corporation act or proceeding, whether of a similar character or otherwise.
b. The Stock Option Shares are shares of the Common Stock of the Company
as currently constituted. If, and whenever, prior to delivery by the Company of
all of the Stock Option Shares which are subject to Options granted thereunder,
the Company shall effect a subdivision or consolidation of shares or other
capital readjustment, the payment of a Stock dividend, a stock split,
combination of shares (reverse stock split) or recapitalization or other
increase or reduction of the number of shares of the Common Stock outstanding
without receiving compensation therefore in money, services or property, then
the number of Stock Option Shares available under the Stock Option Plan and the
number of Stock Option Shares with respect to which Options granted thereunder
may thereafter be exercised shall (i) in the event of an increase in the number
of outstanding shares, be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced; and (ii) in the event of a
reduction in the number of outstanding shares, be proportionately reduced, and
the cash consideration payable per share shall be proportionately increased.
c. If the Company is reorganized, merged, consolidated or party to a
plan of exchange with another corporation pursuant to which shareholders of the
Company receive any shares of stock or other securities, there shall be
substituted for the Stock Option Shares subject to the unexercised portions of
outstanding Options an appropriate number of shares of each class of stock or
other securities which were distributed to the shareholders of the Company in
respect of such Stock Option Shares in the case of a reorganization, merger,
consolidation or plan of exchange; provided, however, that all such Options may
be canceled by the Company as of the effective date of a reorganization, merger,
consolidation, plan of exchange, or any dissolution or liquidation of the
Company, by giving notice to each optionee or his personal representative of its
intention to do so and by permitting the purchase of all the shares subject to
such outstanding Options for a period of not less than thirty (30) days during
the sixty (60) days next preceding such effective date.
d. Except as expressly provided above, the Company's issuance of Stock
Option Shares of any class, or securities convertible into Stock Option Shares
of any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefore, or upon
conversion of shares or obligations of the Company convertible into Stock Option
Shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Stock Option Shares subject
to Options granted thereunder or the purchase price of such shares.
A copy of the Stock Option Plan is attached hereto as Exhibit A.
Securities To Be Offered
Subject to adjustment, a total of Twenty Million (20,000,000) shares of Common
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Stock ("Stock"), of the Company shall be subject to the Stock Option Plan. The
Common Stock subject to the Stock Option Plan shall consist of un-issued shares
or previously issued shares reacquired and held by the Company or any Affiliated
Corporation, and such amount of shares shall be and is hereby reserved for sale
for such purpose. Any of such shares which may remain unsold and which are not
subject to outstanding Options at the termination of the Stock Option Plan shall
cease to be reserved for the purpose of the Stock Option Plan, but until
termination of the Stock Option Plan, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Stock Option Plan.
Should any Option expire or be canceled prior to its exercise in full, the
unexercised shares theretofore subject to such Option may again be subjected to
an Option under the Stock Option Plan.
On January 27, 2004, the Board of Directors adopted and stockholders approved
the Stock Option Plan and authorized the issuance of up to 20,000,000 Common
Shares to be subject to the Stock Option Plan.
Eligible Participants
The persons eligible for participation in the Stock Option Plan as recipients of
Options shall include full-time and part-time employees (as determined by the
Committee) and officers of the Company or of an Affiliated Corporation. In
addition, directors of the Company or any Affiliated Corporation who are not
employees of the Company or an Affiliated Corporation and any attorney,
consultant or other adviser to the Company or any Affiliated Corporation shall
be eligible to participate in the Stock Option Plan. For all purposes of the
Stock Option Plan, any director who is not also a common law employee and is
granted an option under the Stock Option Plan shall be considered an "employee"
until the effective date of the director's resignation or removal from the Board
of Directors, including removal due to death or disability. The Committee shall
have full power to designate, from among eligible individuals, the persons to
whom Options may be granted. A person who has been granted an Option thereunder
may be granted an additional Option or Options, if the Committee shall so
determine. The granting of an Option shall not be construed as a contract of
employment or as entitling the recipient thereof to any rights of continued
employment.
Purchase Of Securities Pursuant To The Stock Option Plan
And Payment For Securities Offered
Consideration for Shares Issued Under the Stock Option Plan. The purchase price
of the Stock Option Shares as to which an Option is exercised shall be paid in
full at the time of exercise and no Stock Option Shares shall be issued until
full payment is made therefore. Payment shall be made either (i) in cash,
represented by bank or cashier's check, certified check or money order (ii) in
lieu of payment for bona fide services rendered, and such services were not in
connection with the offer or sale of securities in a capital-raising
transaction, (iii) by delivering shares of the Company's Common Stock which have
been beneficially owned by the optionee, the optionee's spouse, or both of them
for a period of at least six (6) months prior to the time of exercise (the
"Delivered Stock") in a number equal to the number of Stock Option Shares being
purchased upon exercise of the Option or (iv) by delivery of shares of corporate
stock which are freely tradeable without restriction and which are part of a
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class of securities which has been listed for trading on the NASDAQ system or a
national securities exchange, with an aggregate fair market value equal to or
greater than the exercise price of the Stock Option Shares being purchased under
the Option, or (v) a combination of cash, services, Delivered Stock or other
corporate shares. An Option shall be deemed exercised when written notice
thereof, accompanied by the appropriate payment in full, is received by the
Company. No holder of an Option shall be, or have any of the rights and
privileges of, a shareholder of the Company in respect of any Stock Option
Shares purchasable upon exercise of any part of an Option unless and until
certificates representing such shares shall have been issued by the Company to
him or her.
Exercise Period and Termination. The nonqualified stock options exercise period
shall be a term of not more than ten (10) years from the date of granting of
each nonqualified stock option and shall automatically terminate:
i. Upon termination of the optionee's employment with the Company
for cause;
ii. At the expiration of twelve (12) months from the date of
termination of the optionee's employment with the Company for any reason other
than death, without cause; provided, that if the optionee dies within such
twelve-month period, sub-clause (iii) below shall apply; or
iii. At the expiration of fifteen (15) months after the date of
death of the optionee.
Employment with the Company as used in the Stock Option Plan shall include
employment with any Affiliated Corporation and nonqualified stock options
granted under the Stock Option Plan shall not be affected by an employee's
transfer of employment among the Company and any Parent or Subsidiary thereof.
An optionee's employment with the Company shall not be deemed interrupted or
terminated by a bona fide leave of absence (such as sabbatical leave or
employment by the Government) duly approved, military leave, maternity leave or
sick leave.
Option Price. The Stock Option Plan provides that the option price with
respect to each option will not be less than Ten (10%) percent of the fair
market value of such share on the date the option is granted. The fair market
value of a share on a particular date shall be deemed to be the average of
either (i) the highest and lowest prices at which shares were sold on the date
of grant, if traded on a national securities exchange, (ii) the high and low
prices reported in the consolidated reporting system, if traded on a "last sale
reported" system, such as NASDAQ, or (iii) the high bid and high asked price for
over-the-counter securities. If no transactions in the stock occur on the date
of grant, the fair market value shall be determined as of the next earliest day
for which reports or quotations are available. If the common shares are not then
quoted on any exchange or in any quotation medium at the time the option is
granted, then the Board of Directors or Committee will use its discretion in
selecting a good faith value believed to represent fair market value based on
factors then known to them.
Transferability.
a. Options granted under the Stock Option Plan are transferable
by the holder (a) by will or the laws of descent and distribution and (b) to the
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extent permitted by Form S-8 as amended April 7, 1999. If a participant dies
during employment or within three months thereafter, the option granted to him
may be exercised by his legal representative to the extent set forth therein
until either the expiration of the option or within one year after the date of
death, whichever comes first.
b. Notwithstanding anything to the contrary as may be contained
in this Plan regarding rights as to transferability or lack thereof, all options
granted hereunder may and shall be transferable to the extent permitted in
accordance with SEC Release No. 33-7646 entitled "Registration of Securities on
Form S-8" as effective April 7, 1999 and in particular in accordance with that
portion of such Release which expands Form S-8 to include stock option exercise
by family members so that the rules governing the use of Form S-8 (a) do not
impede legitimate intra family transfer of options and (b) may facilitate
transfer for estate planning purposes - all as more specifically defined in
Article III, Sections A and B thereto, the contents of which are herewith
incorporated by reference.
Assignability
No Option shall be assignable or otherwise transferable (by the optionee or
otherwise) except by will or the laws of descent and distribution or except as
permitted in accordance with SEC Release No.33-7646 as effective April 7, 1999
and in particular that portion thereof which expands upon transferability as is
contained in Article III entitled "Transferable Options and Proxy Reporting" as
indicated in Section A 1 through 4 inclusive and Section B thereof. No Option
shall be pledged or hypothecated in any manner, whether by operation of law or
otherwise, nor be subject to execution, attachment or similar process.
Amendments
The Board may amend, alter or discontinue the Stock Option Plan at any time in
such respects as it shall deem advisable in order to conform to any change in
any other applicable law, or in order to comply with the provisions of any rule
or regulation of the Securities and Exchange Commission required to exempt the
Stock Option Plan or any Options granted thereunder from the operation of
Section 16(b) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or in any other respect not inconsistent with Section 16(b) of the
Exchange Act; provided, that no amendment or alteration shall be made which
would impair the rights of any participant under any Option theretofore granted,
without his consent (unless made solely to conform such Option to, and necessary
because of, changes in the foregoing laws, rules or regulations), and except
that no amendment or alteration shall be made without the approval of
shareholders which would:
a. Decrease the Option price provided for in Paragraph 5 (except as
provided in Paragraph 9), or change the classes of persons eligible to
participate in the Stock Option Plan as provided in Paragraph 3; or
b. Extend the Option period provided for in Paragraph 6; or
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c. Materially increase the benefits accruing to participants under the
Stock Option Plan; or
d. Materially modify the requirements as to eligibility for
participation in the Stock Option Plan; or
e. Extend the expiration date of the Stock Option Plan as set forth in
Paragraph 11 of the Stock Option Plan.
Tax Effects Of Stock Option Plan Participation
Tax Treatment to the Participants. The Stock Option Plan provides for the grant
of nonqualified stock options. A description of these options and certain
federal income tax aspects associated therewith is set forth below. Because tax
results may vary due to individual circumstances, each participant in the Stock
Option Plan is urged to consult his personal tax adviser with respect to the tax
consequences of the exercise of an option or the sale of stock received upon the
exercise thereof, especially with respect to the effect of state tax laws.
Federal Income Tax Treatment of Nonqualified Stock Options. No income is
recognized by an optionee when a non-qualified stock option is granted. Except
as described below, upon exercise of a nonqualified stock option, an optionee is
treated as having received ordinary income at the time of exercise in an amount
equal to the difference between the option price paid and the then fair market
value of the Common Stock acquired. The Company is entitled to a deduction at
the same time and in a corresponding amount. The optionee's basis in the Common
Stock acquired upon exercise of a nonqualified stock option is equal to the
option price plus the amount of ordinary income recognized, and any gain or loss
thereafter recognized upon disposition of the Common Stock is treated as capital
gain or loss.
Stock acquired by "insiders' (i.e., officers, directors or persons holding 10%
or more of the stock of the Company who are subject to the restrictions on
short-swing trading imposed by Section 16(b) of the Securities Exchange Act of
1934) upon exercise of nonqualified stock options constitutes "restricted
property" and, unless the optionee elects otherwise, the recognition of income
upon exercise is deferred to the date upon which the stock acquired upon
exercise may first be sold without incurring Section 16(b) liability (generally
six months after exercise). If such an optionee does not elect to recognize
income upon exercise, the insider will realize ordinary income in an amount
equal to the difference between the option price and the fair market value on
the date the stock may first be sold without incurring Section 16(b) liability.
Restrictions On Resale Of Common Stock
While the Stock Option Plan does not place restrictions on re-sales of Common
Stock acquired thereunder, shares acquired under the Stock Option Plan by an
"affiliate," as that term is defined in Rule 405, under the Securities Act of
1933, may only be resold pursuant to the registration requirements of the Act,
Rule 144 or another applicable exemption therefrom. Generally, sales of
securities, including Common Stock of the Company, are subject to antifraud
provisions contained in federal and state securities laws. Acquisitions
(including acquisitions under the Stock Option Plan) and dispositions of Common
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Stock of the Company by an officer, director or affiliate of the Company within
any six month period may give rise to the right of the Company to recapture any
profit from such transactions pursuant to Section 16(b) of the Securities
Exchange Act of 1934.
It is advisable for a participant to consult with legal counsel concerning the
securities law implications of his exercise of options and his acquisition or
disposition of shares of Common Stock under the Stock Option Plan.
Legal Matters
The validity of the issuance of the shares of Common Stock offered hereby will
be passed upon for the Company by Gary B. Wolff, P.C., 805 Third Avenue, New
York, New York 10022.
Indemnification Of Officers And Directors
Section 78 of the Nevada Revised Statutes contains certain provisions relating
to the indemnification of officers and directors. Additionally, Article "XI" of
the Registrant's Articles of Incorporation reads as follows:
"XI": The corporation shall indemnify all directors, officers, employees, and
agents to the fullest extent permitted by Nevada law as provided within NRS
78.751 or any other law then in effect or as it may hereafter be amended.
The corporation shall indemnify each present and future director,
officer, employee, or agent of the corporation who becomes a party or is
threatened to be made a party to any suit or proceeding, whether pending,
completed, or merely threatened, and whether said suit or proceeding is civil,
criminal, administrative, investigative, or otherwise, except an action by or in
the right of the corporation, by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including but not limited to attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit, or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The expenses of directors and officers incurred in defending a civil or
criminal action, suit, or proceeding must be paid by the corporation as they are
incurred and in advance of the final disposition of the action, suit, or
proceeding if and only if the director or officer undertakes to repay said
expenses to the corporation if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation.
The indemnification and advancement of expenses may not be made to or
on behalf of any director or officer if a final adjudication establishes that
the directors' or officers' acts or omissions involved intentional misconduct,
fraud, or a knowing violation of the law and was material to the cause of
action.
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Innocap has been advised that, in the opinion of the SEC, this type of
indemnification is against public policy as expressed in the1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
these types of liabilities, other than the payment by it of expenses incurred or
paid by a director, officer or controlling person in the successful defense of
any action, suitor proceeding, is asserted by a director, officer or controlling
person in connection with the securities being registered, Innocap will submit
the question of whether indemnification by it is against public policy to an
appropriate court and will be governed by the final adjudication of the case.
Incorporation Of Certain Documents By Reference
The following documents are incorporated by reference in the registration
statement:
a. The Registrant's Form 10-SB Registration Statement as filed March 1,
2004.
b. All other reports filed by the registrant pursuant to sections 13(a)
or 15(d) of the Securities Exchange Act of 1934 since becoming subject to '34
Act reporting requirements; and
c. Not Applicable.
All documents subsequently filed by the registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment to the registration statement which indicates that
all of the shares of common stock offered have been sold or which deregisters
all of such shares then remaining unsold, shall be deemed to be incorporated by
reference in the registration statement and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
Further Information
A Registration Statement on Form S-8 was filed by the Company with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933. This Prospectus omits certain of the information contained in the
Registration Statement and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities to which this Prospectus relates.
Statements herein contained concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
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