Attached files
As filed with the Securities and Exchange Commission on September 22, 2010
File No. 333-167667
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
to the
FORM S-1/A
(Amendment No. 4)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Innovative Product Opportunities Inc.
(Name of small business issuer in its charter)
Delaware 7389 42-1770123
(State of other (Primary Standard Industrial (IRS Employer
jurisdiction Classification Code Number) Identification Number)
of incorporation)
730 Gana Court
Mississauga, Ontario
Canada L5S 1P1
(347) 789-7131
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Doug Clark, President
730 Gana Court
Mississauga, Ontario
Canada L5S 1P1
(347) 789-7131
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of communications to:
Peter J. Gennuso, Esq.
Gersten Savage LLP
600 Lexington Avenue, 9th Floor
New York, NY 10022
phone (212) 752-9700 x 9437
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the offering. []
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. []
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. []
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer," and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [] Accelerated filer []
Non-accelerated filer [] Smaller Reporting Company [x]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Title of each| Amount of | Proposed maximum| Proposed maximum| Amount of
class of | shares to be | offering price | Aggregate | registration
securities to| registered(1)| per share (2) | offering price | fee
be registered| | | |
--------------------------------------------------------------------------------
Common stock,| | | |
to be sold by| | | |
existing | 10,000,000 | $0.10 | $1,000,000 | $71.30
shareholders | | | |
--------------------------------------------------------------------------------
Common Stock,| | | |
held in | | | |
trust, to be | | | |
distributed | | | |
to Metro One | 1,000,000 | n/a | n/a | n/a
Development, | | | |
Inc. | | | |
shareholders | | | |
--------------------------------------------------------------------------------
(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended, this
registration statement shall be deemed to cover additional securities that
may be offered or issued to prevent dilution resulting from stock splits,
stock dividends or similar transactions. There is no current market for the
securities and the price at which the Shares are being offered has been
arbitrarily determined by the Company and used for the purpose of computing
the amount of the registration fee in accordance with Rule 457 under the
Securities Act of 1933, as amended.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o).
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND THESE SECURITIES MAY
NOT BE SOLD UNTIL THAT REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION September 22, 2010
INNOVATIVE PRODUCT OPPORTUNITIES, INC.
OFFERING UP TO 11,000,000 COMMON SHARES
This prospectus relates to the sale or distribution of up to 11,000,000 shares
of our common Stock. 10,000,000 shares may be sold by several selling
stockholders. 1,000,000 shares will also be distributed, without receipt of
payment, pursuant to a trust held for the benefit of shareholders of Metro One
Development, Inc. after the registration statement filed with the Securities
and Exchange Commission is declared effective and the shares quoted on the
Over-the-Counter Bulletin Board. All costs associated with this registration
will be borne by us.
This is our initial public offering. The shares of our common stock are not
currently traded.
____________________
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE
SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.
____________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offence.
The selling stockholders will sell at a price of $0.10 per share until our
shares are quoted on the Over-the-Counter Bulletin Board and thereafter at
prevailing market prices or privately negotiated prices. The selling
shareholders will receive all net proceeds of the offering. We must find
a market maker that will file an application on our behalf in order for us
to be quoted on the Over-the-Counter Bulletin Board and there are no
guarantees that we will find a market maker.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is
not permitted.
THE COMPANY IS CONSIDERED TO BE IN UNSOUND FINANCIAL CONDITION. PERSONS SHOULD
NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. BEFORE
PURCHASING ANY OF THE COMMON SHARES COVERED BY THIS PROSPECTUS, CAREFULLY READ
AND CONSIDER THE RISK FACTORS INCLUDED IN THE SECTION ENTITLED "RISK FACTORS"
The date of this Prospectus is September __, 2010.
3
TABLE OF CONTENTS
TABLE OF CONTENTS
Page
Prospectus Summary............................................................5
Risk Factors..................................................................6
Cautionary Statement Concerning Forward-Looking Statements...................12
Use of Proceeds..............................................................12
Dilution.....................................................................12
Determination of Offering Price..............................................13
Selling Security Holders.....................................................14
Plan of Distribution.........................................................16
Description of Securities to be Registered...................................17
Interests of Named Experts and Counsel.......................................18
Description of Business......................................................18
Description of Property......................................................20
Legal Proceedings............................................................20
Market Price of and Dividends on Common Equity
and Related Stockholder Matters............................................21
Financial Statements...................................................F1 - F22
Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................22
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................................24
Quantitative and Qualitative Disclosures About Market Risk...................25
Directors, Executive Officers, Promoters and Control Persons.................25
Executive Compensation.......................................................26
Security Ownership of Certain Beneficial Owners and Management...............27
Transactions with Related Persons, Promoters and Certain Control Persons.....28
Director Independence........................................................28
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities.................................................28
4
INNOVATIVE PRODUCT OPPORTUNITIES INC.
PROSPECTUS SUMMARY
The following information is a summary of the prospectus and it does not
contain all of the information you should consider before making an investment
decision. You should read the entire prospectus carefully, including the
financial statements and the notes relating to the financial statements.
ABOUT US
We are a development stage enterprise incorporated under the laws of the State
of Delaware on April 3, 2009. Our headquarters are located at 730 Gana Court
Mississauga, Ontario Canada L5S 1P1. Our phone number is 347-789-7131. Our
website can be found at www.innovativeproductopportunities.com. The information
on our website is not a part of this prospectus.
Our business is to be a service only product development firm to meet the
needs of new and emerging product ideas available for sale today and in the
future. Our Certified Engineering Technicians can participate in the creation
of products, from hand sketches and design through prototyping and
construction. We offer project management to assist our client to produce
finished parts ready to market in numerous industries including, but not
limited to, consumer and household goods, office products, furniture, and
toys. We believe that we will be able to deliver a complete solution to
startup and development stage companies.
Our business plan does not include engaging in, and we currently have no
plans to engage in, a merger or acquisition with any other company, entity
or person.
This is our initial public offering. There is not currently a market for our
common stock. We cannot guarantee our shares will be quoted on the Over-the-
Counter Bulletin Board as our stock has not been approved for trading on the
Over-the-Counter Bulletin Board as of the date of this prospectus. We cannot
determine if an active market will develop for our common stock. Additionally,
we cannot determine or predict the price at which our common stock would
initially trade. The selling stockholders will sell at a price of $0.10 per
share until our shares are quoted on the Over-the-Counter Bulletin Board and
thereafter at prevailing market prices or privately negotiated prices.
1,000,000 shares will also be distributed, without receipt of payment,
pursuant to a trust held for the benefit of shareholders of Metro One
Development, Inc. after the registration statement filed with the Securities
and Exchange Commission is declared effective and our common stock is traded
on the Over-the-Counter Bulletin Board. In order to be quoted on the OTCBB we
must find a market maker that will file an application on our behalf, there
are no guarantees that we will find a market maker.
SALES BY OUR SELLING STOCKHOLDERS
This prospectus relates to the sale of up to 11,000,000 shares of our common
stock. 10,000,000 shares may be sold by several selling stockholders.
1,000,000 shares will also be distributed, without receipt of payment,
pursuant to a trust held for the benefit of shareholders of Metro One
Development, Inc. after the registration statement filed with the Securities
and Exchange Commission is declared effective and our common stock is traded
on the Over-the-Counter Bulletin Board. We cannot guarantee our shares will
be quoted on the Over-the-Counter Bulletin Board as our stock has not been
approved for trading on the Over-the-Counter Bulletin Board as of the date of
this prospectus.
The Offering
Common stock outstanding as 31,000,000 shares,
of September 21, 2010 par value $0.0001 per share
Common stock offered 11,000,000 shares
Use of proceeds We will not receive any proceeds from the
sale by the selling stockholders of our
common stock or shares distributed by the
trust.
Symbol for our common stock Our common stock is not currently traded.
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SUMMARY OF SELECTED FINANCIAL INFORMATION
The following table sets forth summary financial data derived from Innovative
Product's financial statements audited by De Joya Griffith & Company, LLC for
the period from inception (April 3, 2009) through December 31, 2009 and from
our unaudited interim financial statements for the three and six month periods
ended June 30, 2010 and for the cumulative period from inception
(April 3, 2009) through June 30, 2009 and 2010. The data should be read in
conjunction with the financial statements and the related notes thereto, as
well as the "Management's Discussion and Plan of Operations" included elsewhere
in this prospectus.
Financial Data Summary
Statements of Operations Data
From From
inception inception
(April 3, (April 3,
For the three For the six 2009) 2009)
months ended months ended through through
June 30, June 30, June 30, June 30,
2010 2010 2009 2010
--------- ---------- --------- ---------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total Revenues $ 21,000 $ 21,000 $ -- $ 21,000
---------- ---------- ---------- ---------
Organizational, Consulting and
Professional Expenses 110,000 110,000 2,000 112,000
---------- ---------- ---------- ---------
Total Expenses 110,000 110,000 2,000 112,000
---------- ---------- --------- ----------
Net operating loss (89,000) (89,000) (2,000) (91,000)
---------- ---------- --------- ---------
Gain on accounts receivable
settlement 336,000 336,000 -- 336,000
---------- ---------- ---------- ----------
Income (loss) before taxes 247,000 247,000 (2,000) 245,000
Provision for income taxes 85,750 85,750 -- 85,750
---------- ---------- ---------- ----------
Net income (loss) 161,250 161,250 (2,000) 159,250
========== ========= ========== ==========
Basic and diluted net
income per common share $ 0.01 $ 0.01 $ 0.00
========== ========== ==========
Weighted average number
of common shares outstanding
- basic and diluted 25,681,324 22,856,359 20,000,000
========== ========== ===========
As at As at
June 30, December 31,
Balance Sheet Data 2010 2009
------------ ------------
(Unaudited) (Audited)
Working Capital $ 735,350 $ 0
============ ===========
Total Assets $ 1,071,000 $ 0
============ ===========
Total Liabilities $ 335,650 $ 0
============ ===========
Stockholders' Equity $ 735,350 $ 0
============ ===========
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and other information included
in this prospectus. If any of the following risks actually occur, our business,
financial condition or results of operations could be materially and adversely
affected and you may lose some or all of your investment. The trading price of
our common stock, when our stock in fact trades, could decline due to any of
these risks, and you could lose all or a part of your investment. We cannot
assure any investor that we will successfully address these risks. Prospective
investors should carefully consider the following risk factors:
6
RISKS RELATED TO OUR BUSINESS
WE ARE A DEVELOPMENT STAGE ENTERPRISE THAT LACKS ANY OPERATING HISTORY OR
REVENUES AND WE MAY NEVER GENERATE REVENUES OR BECOME PROFITABLE.
We are a development stage enterprise without financial resources and an
operating history on which an investor can base its assessment of our
business plan. We expect to incur losses in the foreseeable future due
to significant costs associated with our business startup and development,
including costs associated with our on-going operations. Our operations
may never generate sufficient revenues to fund our continuing operations
and we may never generate positive cash flow from our operations. Further,
we may not attain or sustain profitability in any future period. If we do
not successfully develop our business, you may lose all or part of your
investment.
IF WE FAIL TO SUCCESSFULLY MANAGE OUR NEW PRODUCT DEVELOPMENT OR NEW PRODUCT
MARKET EXPANSION, OR IF WE FAIL TO ANTICIPATE THE ISSUES ASSOCIATED WITH
SUCH DEVELOPMENT OR EXPANSION, OUR BUSINESS MAY SUFFER.
We have not completed development on any product. Our ability to
anticipate and manage a variety of issues associated with any new product
development or market expansion, such as:
* difficulties faced in design for manufacturing;
* market acceptance;
* effective management of inventory levels in line with anticipated
product demand; and
* quality problems or other defects in the early stages of product
introduction that were not anticipated in the design of those products.
Our business may suffer if we fail to successfully anticipate and manage
these issues associated with product development and market expansion and you
may lose all or part of your investment.
OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE
AS A GOING CONCERN.
Currently, we do not have any material assets, nor do we have operations or
a source of revenue sufficient to cover our operational costs and allow us
to continue as a going concern. Since our inception on April 3, 2009 though
June 30, 2010, we have retained earnings accumulated during the development
stage of $159,250. We will depend upon the raising of additional capital
through placement of our common stock in order to implement our business
plan. We are currently funding our initial operations by way of loans from
our Chief Executive Officer and through the issuance of common stock in
exchange for services. Accordingly, these factors raise substantial
doubt as to our ability to continue as a going concern.
7
CURRENT DECLINING GENERAL ECONOMIC OR BUSINESS CONDITIONS MAY HAVE A NEGATIVE
IMPACT ON OUR BUSINESS.
Our current and future business plans depend, in large part, on the overall
state of the economy. Concerns over inflation, energy costs, geopolitical
issues, the availability and cost of credit, the U.S. mortgage market and a
declining real estate market in the U.S. have contributed to increased
volatility and diminished expectations for the global economy and expectations
of slower global economic growth going forward. These factors, combined with
volatile oil prices, declining business and consumer confidence and increased
unemployment, have precipitated a global economic slowdown. If the economic
climate does not improve or continues to deteriorate, it could have a material
adverse effect on our ability to implement our business plan.
IF WE ARE UNABLE TO OBTAIN ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO FULFILL
OUR BUSINESS PLAN.
We require substantial funds to further develop and implement our business
plan. Over the next 12 months we expect to expend approximately $25,000 in cash
for legal, accounting and related services. To meet our future obligations,
from time to time, we may need to issue debt or shares of our common stock or
other equity instruments such as warrants. However, we may not be able to
obtain additional financing when needed, or if available, such financing may
not be on commercially reasonable terms. If we are unable to obtain financing
when needed, we may be forced to curtail our planned development, which would
negatively affect the value of your investment.
WE CURRENTLY HAVE ONLY ONE CUSTOMER AND IF WE CANNOT ATTRACT MORE CUSTOMERS WE
WILL NOT GENERATE REVENUES AND OUR BUSINESS WILL FAIL.
As of September 21, 2010, we have had only one customer. We may not be able to
successfully attract other customers and in the event that we do attract
customers, we may not be able to maintain such customers and as a result, we
will not generate revenues and our business will fail. If our business fails,
you will lose all or part of your investment.
OUR ORIGINAL SHAREHOLDERS HAVE CONTROL OVER OUR POLICIES AND AFFAIRS AND THEY
MAY TAKE CORPORATE ACTIONS THAT COULD NEGATIVELY IMPACT OUR BUSINESS AND
STOCK PRICE.
Our original shareholders own approximately 64.5% of our voting securities.
The original shareholders will control our policies and affairs and all
corporate actions requiring shareholder approval, including the election of
directors. Additionally, these holdings may delay, deter or prevent
transactions, such as mergers or tender offers, that would otherwise
benefit investors.
WE MAY ENCOUNTER DIFFICULTIES MANAGING OUR PLANNED GROWTH, WHICH WOULD
ADVERSELY AFFECT OUR BUSINESS AND COULD RESULT IN INCREASING COSTS AS WELL
AS A DECREASE IN OUR STOCK PRICE.
We intend to establish a customer base and develop new products for them.
To manage our anticipated growth, we must continue to improve our operational
and financial systems and expand, train, retain and manage our employee base
to meet new opportunities. Because of the registration of our securities, we
are subject to reporting and disclosure obligations, and we anticipate that
we will hire additional finance and administrative personnel to address these
obligations. In addition, the anticipated growth of our business will place a
significant strain on our existing managerial and financial resources. If we
cannot effectively manage our growth, our business may be harmed.
8
IF WE LOSE THE RESEARCH AND DEVELOPMENT SKILLS AND MANUFACTURING CAPABILITIES
OF OUR FOUNDER, OUR ABILITY TO ATTAIN PROFITABILITY MAY BE IMPEDED AND IF WE
DO NOT ATTAIN PROFITABILITY, OUR STOCK PRICE MAY DECREASE AND YOU COULD LOSE
PART OR ALL OF YOUR INVESTMENT.
Doug Clark founded our Company. He invested the necessary start-up costs
from his personal finances and he is our Certified Engineering Technician. In
addition, Mr. Clark has relationships with key suppliers. These
relationships with suppliers afford us access to valuable resources that help
ensure product availability on time that is competitively priced. Our success
depends in large part upon Mr. Clark 's contacts in this industry. If we were
to lose the benefit of his services, our ability to obtain materials at an
affordable price would be adversely effected which would have a negative impact
on our operations. We presently have no employment agreement with Mr. Clark.
WE WILL INCUR INCREASED COSTS AND DEMANDS UPON MANAGEMENT AS A RESULT OF
COMPLYING WITH THE LAWS AND REGULATIONS AFFECTING PUBLIC COMPANIES, WHICH COULD
HARM OUR OPERATING RESULTS.
As a public company, we will incur significant additional legal, accounting and
other expenses that we did not incur as a private company, including costs
associated with public company reporting requirements. We also will incur
costs associated with corporate governance requirements, including requirements
under Section 404 and other provisions of the Sarbanes-Oxley Act, as well as
rules implemented by the Securities and Exchange Commission ("SEC"). The
expenses incurred by reporting companies for reporting and corporate governance
purposes have increased dramatically in recent years. We expect these rules
and regulations to substantially increase our legal and financial compliance
costs and to make some activities more time-consuming and costly. We are unable
to currently estimate these costs with any degree of certainty. We also expect
these new rules and regulations may make it more difficult and more expensive
for us to obtain director and officer liability insurance, and we may be
required to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage previously available. As a
result, it may be more difficult for us to attract and retain qualified
individuals to serve on our board of directors or as our executive officers.
Currently we do not have a system of checks and balances in place covering our
financial operations and investors will bear the economic risk associated with
the lack of such oversight.
BECAUSE WE DO NOT HAVE AN AUDIT COMMITTEE, SHAREHOLDERS WILL HAVE TO RELY ON
THE DIRECTORS, WHO ARE NOT INDEPENDENT, TO PERFORM THESE FUNCTIONS.
We do not have an audit or compensation committee comprised of independent
directors. These functions are performed by the board of directors as a whole.
The members of the Board of Directors are not independent directors. Thus,
there is a potential conflict in that the board members are also engaged in
management and participate in decisions concerning management compensation and
audit issues that may affect management performance.
TO DATE WE HAVE NOT GENERATED REVENUES FROM OPERATIONS AND WE MAY HAVE
ADDITIONAL CAPITAL REQUIREMENTS TO CONTINUE OUR OPERATIONS BUT THEY MIGHT NOT
BE AVAILABLE TO US ON FAVORABLE TERMS OR AT ALL, AND IF UNAVAILABLE OUR ABILITY
TO RUN OUR BUSINESS WILL BE IMPAIRED.
We have limited working capital. As a result, it may be impossible to expand
our operations. If we are unable to generate sufficient revenues to cover
operating expenses or raise additional funds after the twelve months or during
the twelve months should we determine to undertake additional projects, outside
of our current business plan, we will be unlikely to expand our business
operations. We currently have no other plans or arrangements to raise capital
for our business except for this Offering.
9
RISKS RELATED TO THIS OFFERING AND OUR STOCK
A TRADING MARKET MAY NOT DEVELOP FOR OUR COMMON STOCK AND YOU MAY FIND IT
DIFFICULT OR IMPOSSIBLE TO SELL YOUR SHARES FOR THE FORESEEABLE FUTURE.
Our common stock does not currently trade in any market or exchange. As of
September 21, 2010, we had only 12 shareholders. This number of shareholders
will not be sufficient to build a trading market and we may not sufficiently
expand our number of shareholders for the foreseeable future. We intend to
list our shares on the Over-the-Counter Bulletin Board but we may not be
successful in making that listing. If a trading market does not develop for
our common stock, you may find it difficult or impossible to sell your shares.
"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING OUR SECURITIES DIFFICULT WHICH
MAY MAKE OUR STOCK LESS LIQUID AND MAKE IT HARDER FOR INVESTORS TO BUY AND
SELL OUR SHARES.
Trading in our securities is subject to the SEC's "penny stock" rules and it
is anticipated that trading in our securities will continue to be subject to
the penny stock rules for the foreseeable future. The SEC has adopted
regulations that generally define a penny stock to be any equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions. These rules require that any broker-dealer who recommends our
securities to persons other than prior customers and accredited investors
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with
trading in the penny stock market. In addition, broker-dealers must disclose
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities they offer. The additional burdens
imposed upon broker-dealers by these requirements may discourage broker-dealers
from recommending transactions in our securities, which could severely limit
the liquidity of our securities and consequently adversely affect the market
price for our securities.
IF OUR STOCK DOES TRADE IN A MARKET OR EXCHANGE, OUR STOCK PRICE MAY BE
VOLATILE, AND YOU MAY NOT BE ABLE TO RESELL SHARES OF OUR COMMON STOCK AT OR
ABOVE THE PRICE YOU PAID.
Prior to this offering, our common stock has not been traded in a public
market. We cannot predict the extent to which a trading market will develop
or how liquid that market might become. Additionally, we are not selling
shares in this offering. The selling stockholders will sell their shares
at such prices and such times as they determine. It is possible that they
may not sell their shares at all. The selling stockholders will
sell at a price of $0.10 per share until the shares are quoted on the
Over-the-Counter Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We intend to seek a market maker to file
an application for quotation on the Over-the-Counter Bulletin Board but
we may not be successful. The trading price of our common stock following
this offering is therefore likely to be highly volatile and could be subject
to wide fluctuations in price in response to various factors, some of which
are beyond our control. These factors include:
- Quarterly variations in our results of operations or those of our
competitors.
10
- Announcements by us or our competitors of acquisitions, new products,
significant contracts, commercial relationships or capital
commitments.
- The emergence of new sales channels in which we are unable to
compete effectively.
- Our ability to develop and market new and enhanced products on a
timely basis.
- Commencement of, or our involvement in, litigation.
- Any major change in our board or management.
- General economic conditions and slow or negative growth of related
markets.
In addition, the stock market in general has experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of individual companies. These broad market and industry
factors may seriously harm the market price of our common stock, regardless
of our actual operating performance. In addition, in the past, following
periods of volatility in the overall market and the market price of a company's
securities, securities class action litigation has often been instituted
against these companies. This litigation, if instituted against us, could
result in substantial costs and a diversion of our management's attention
and resources.
WE MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK WHICH WOULD REDUCE INVESTORS'
PERCENTAGE OF OWNERSHIP, DECREASE THE VALUE OF INVESTORS' INVESTMENT AND MAY
DILUTE OUR SHARE VALUE.
Our Certificate of Incorporation authorizes the issuance of 500,000,000 shares
of common stock and 1,000,000 shares of preferred stock. In the past, we
have been able to pay for some of the services we require through the issuance
of our common stock. We may continue to compensate our consultants and other
staff with common stock in order to preserve our cash for other uses. The
future issuance of authorized common stock may result in substantial dilution
in the percentage of our common stock held by our then existing stockholders.
The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the common
stock held by our investors, may decrease the value of our investors'
investment and might have an adverse effect on any trading market for our
common stock, if one ever exists.
WE DO NOT PLAN TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE, AND, AS A RESULT,
STOCKHOLDERS WILL NEED TO SELL SHARES TO REALIZE A RETURN ON THEIR INVESTMENT.
We have not declared or paid any cash dividends on its capital stock since
inception. We intend to retain any future earnings to finance the operation
and expansion of its business and does not anticipate paying any cash
dividends in the foreseeable future. As a result, stockholders will need to
sell shares of common stock in order to realize a return on their investment,
if any. If no market develops for the common shares in the future investors
would lose their entire investment.
11
YOU MAY NOT BE ABLE TO SELL YOUR SHARES IN OUR COMPANY BECAUSE THERE IS NO
PUBLIC MARKET FOR OUR STOCK.
There is no public market for our common stock. In the absence of being listed,
no market is available for investors in our common stock to sell their shares.
We intend to have a market maker apply for quotation to the Over-the-Counter
Bulletin Board. Assuming that we are successful in finding a market maker
to submit for quotation of our stock, of which there can be no assurance,
our securities will likely be subject to the penny stock rules, which apply
generally to equity securities with a price of less than $5.00 per share,
other than securities registered on certain national exchanges or quoted on
the NASDAQ system. The penny stock rules reduce the level of trading activity
and the secondary market for a security that becomes subject to the penny
stock rules. Therefore, investors in this Offering may find it more difficult
to sell their Shares.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. We generally use words such as "believe," "may," "could,"
"will," "intend," "expect," "anticipate," "plan," and similar expressions to
identify forward-looking statements. You should not place undue reliance on
these forward-looking statements. Our actual results could differ materially
from those anticipated in the forward-looking statements for many reasons,
including the risks described in our "Risk Factor" section and elsewhere in
this report. Although we believe the expectations reflected in the
forward-looking statements are reasonable, they relate only to events as of
the date on which the statements are made. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of the
forward-looking statements. We do not intend to update any of the
forward-looking statements after the date of this document to conform
these statements to actual results or to changes in our expectations,
except as required by law.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be offered and
sold from time to time by certain selling stockholders. We will not receive
proceeds from the sale of shares of common stock in this offering.
DILUTION
We are not issuing new common shares in this offering, therefore existing
stockholders' ownership will not be diluted. If we raise money by means of
an offering of our common stock at a later time, each of our stockholders'
ownership interest in our Company would be proportionately reduced. None
of our stockholders have any pre-emptive rights to acquire additional shares
of our common stock or other securities.
12
DETERMINATION OF OFFERING PRICE
The shares of common stock are being offered for sale by the selling
stockholders at a price of $0.10 per share until the shares are quoted on
the Over-the-Counter Bulletin Board and thereafter at prevailing market
prices or privately negotiated prices.
The price of the shares being offered, until such shares are quoted on the
Over-the-Counter Bulletin Board, was arbitrarily determined. This price bears
no relationship whatsoever to our assets, earnings, book value, or other
criteria of value.
In order to be quoted on the OTCBB we must find a market maker that will file
an application on our behalf, there are no guarantees that we will find a
market maker. Even if we find a market maker which files an application on our
behalf, there is no guarantee that: (i) the application will be accepted;
(ii) our stock will become quoted; or (iii) a market for our stock will
develop.
SELLING SECURITY HOLDERS
Based upon information available to us as of September 21, 2010, the following
table sets forth the names of the selling stockholders, the number of shares
owned, the number of shares registered by this prospectus and the number and
percent of outstanding shares that the selling stockholders will own after
the sale of the registered shares, assuming all of the shares are sold. The
information provided in the table and discussions below has been obtained
from the selling stockholders. The selling stockholders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise
dispose of, at any time or from time to time since the date on which it
provided the information regarding the shares beneficially owned, all or
a portion of the shares of common stock beneficially owned in transactions
exempt from the registration requirements of the Securities Act of 1933. As
used in this prospectus, "selling stockholder" includes donees, pledgees,
transferees or other successors-in-interest selling shares received from the
named selling stockholder as a gift, pledge, distribution or other non-sale
related transfer.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities Exchange Act of 1934.
Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to the shares, subject to community
property laws where applicable.
Name and Address Ownership Number of Number of Shares Percentage
of Beneficial Owner Before Shares Owned After Owned After
Offering Offered Offering(1) Offering (2)
-------------------------------------------------------------------------------
Nadav Elituv (3) 1,000,000 1,000,000 -0- 0%
53 Theodore Pl.
Thornhill, Ontario
Canada L4J 8E4
The Cellular 1,000,000 1,000,000 -0- 0%
Connection Ltd. (4)
P.O. Box 562
Richmond Hill, Ontario
Canada L4B 4R6
Bradley Southam (5) 1,000,000 1,000,000 -0- 0%
139 Bayne Cresent
Cambridge Ontario
Canada N1T 1K5
13
Evan Schwartzberg (6) 1,000,000 1,000,000 -0- 0%
85 Corstate Ave
unit #1
Concord, Ontario
Canada L4K 4Y2
Brett W. Gold (7) 1,000,000 1,000,000 -0- 0%
60 Sutton Place SP #6DN
New York, NY 10022
Al Kau (8) 1,000,000 1,000,000 -0- 0%
33671 Chula Vista
Monarch Beach,
CA 92629
Larry Burke (9) 1,000,000 1,000,000 -0- 0%
126 Rose Park Drive
Toronto, Ontario
Canada M4T 1R5
Aaron Shrira (10) 1,000,000 1,000,000 -0- 0%
226 North Wetherly Drive
Beverily Hills Ca. 90211
Danielle Goose (11) 1,000,000 1,000,000 -0- 0%
62 Castlewood Road
North York Ontario
Canada M5M 2L2
William Reil (12) 1,000,000 1,000,000 -0- 0%
23 Nassau Dr
Grimsby, ON
L3M 3A3
Metro One 1,000,000 1,000,000 -0- 0%
Development,
Inc. (13) in Trust
85 Corstate Ave
unit #1
Concord, Ontario
Canada L4K 4Y2
---------- ----------
Total 11,000,000 11,000,000
14
(1) These numbers assume the selling stockholders sell all of their shares
prior to the completion of the offering.
(2) Based on 31,000,000 shares outstanding as of September 21, 2010.
(3) We are registering 1,000,000 shares of common stock that we issued to
Nadav Elituv on May 14, 2010 in exchange for software development
services related to interactive displays valued at $10,000.
(4) We are registering 1,000,000 shares of common stock that we issued to
The Cellular Connection, Ltd. on May 14, 2010 in exchange for
business development services related to going public valued at $10,000.
Stuart Turk, as the principal owner of The Cellular Connection, Ltd.,
has voting and dispositive control over these shares. The Cellular
Connection Ltd is not a broker-dealer and is not an affiliate of a
broker-dealer.
(5) We are registering 1,000,000 shares of common stock that we issued to
Bradley Southam on May 14, 2010 in exchange for graphic arts
development services related to interactive displays valued at $10,000.
(6) We are registering 1,000,000 shares of common stock that we issued to
Evan Schwartzberg on May 14, 2010 in exchange for accounting and
bookkeeping services valued at $10,000.
(7) We are registering 1,000,000 shares of common stock that we issued to
Brett W. Gold on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
(8) We are registering 1,000,000 shares of common stock that we issued to
Al Kau on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
(9) We are registering 1,000,000 shares of common stock that we issued to
Larry Burke on May 14, 2010 in exchange for design and technical services
related to potential customer usage valued at $10,000.
15
(10) We are registering 1,000,000 shares of common stock that we issued to
Aaron Shrira on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
(11) We are registering 1,000,000 shares of common stock that we issued to
Danielle Goose on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
(12) We are registering 1,000,000 shares of common stock that we issued to
William Reil on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
(13) We are registering 1,000,000 shares of common stock that we issued to
Metro One Development, Inc. in trust on May 14, 2010 in exchange for
technical knowledge on its interactive displays valued at $10,000.
PLAN OF DISTRIBUTION
The selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The selling stockholders
may sell the shares from time to time:
- in transactions on the Pink Sheets, the Over-the-Counter Bulletin
Board or on any national securities exchange or U.S. inter-dealer
system of a registered national securities association on which our
common stock may be listed or quoted at the time of sale;
- in private transactions and transactions otherwise than on these
exchanges or systems or in the over-the-counter market;
- at a price of $0.10 per share for the duration of the offering or
until our shares are quoted on the Over-the-Counter Bulletin Board
and thereafter at prevailing market prices or privately negotiated
prices;
- in negotiated transactions;
- in a combination of such methods of sale; or
- any other method permitted by law.
The selling stockholders may affect such transactions by offering and selling
the shares directly to or through securities broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the selling stockholders and/or the purchasers of the
shares for whom such broker-dealers may act as agent or to whom the selling
stockholders may sell as principal, or both, which compensation as to a
particular broker-dealer might be in excess of customary commissions.
On or prior to the effectiveness of the registration statement to which this
prospectus is a part, we will advise the selling stockholders that they and
any securities broker-dealers or others who may be deemed to be statutory
underwriters will be governed by the prospectus delivery requirements under
the Securities Act. Under applicable rules and regulations under the
Securities Exchange Act, any person engaged in a distribution of any of the
shares may not simultaneously engage in market activities with respect to
the common stock for the applicable period under Regulation M prior to the
commencement of such distribution. In addition and without limiting the
foregoing, the selling security owners will be governed by the applicable
provisions of the Securities and Exchange Act, and the rules and regulations
thereunder, including without limitation Rules 10b-5 and Regulation M,
which provisions may limit the timing of purchases and sales of any of the
shares by the selling stockholders. All of the foregoing may affect the
marketability of our securities.
16
On or prior to the effectiveness of the registration statement to which
this prospectus is a part, we will advise the selling stockholders that
the anti-manipulation rules under the Securities Exchange Act may apply
to sales of shares in the market and to the activities of the selling
security owners and any of their affiliates. We have informed the selling
stockholders that they may not:
- engage in any stabilization activity in connection with any of the
shares;
- bid for or purchase any of the shares or any rights to acquire the
shares,
- attempt to induce any person to purchase any of the shares or rights to
acquire the shares other than as permitted under the Securities
Exchange Act; or
- effect any sale or distribution of the shares until after the
prospectus shall have been appropriately amended or supplemented, if
required, to describe the terms of the sale or distribution.
We have informed the selling stockholders that they must affect all sales
of shares in broker's transactions, through broker-dealers acting as agents,
in transactions directly with market makers, or in privately negotiated
transactions where no broker or other third party, other than the purchaser,
is involved. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions allowed to any
broker-dealers, and any profits received on the resale of shares, may be
deemed to be underwriting discounts and commissions under the Securities
Act if the broker-dealers purchase shares as principal. In the absence of
the registration statement to which this prospectus is a part, certain of
the selling stockholders would be able to sell their shares only pursuant
to the limitations of Rule 144 promulgated under the Securities Act.
1,000,000 shares will also be distributed, without receipt of payment, pursuant
to a trust held for the benefit of shareholders of Metro One Development, Inc.
Pursuant to the terms of the trust, distribution of the shares by the Trustee
is conditioned upon the Securities and Exchange Commission declaring this
registration statement effective, and the shares becoming quoted and free
trading on the OTCBB. The trust shall cease to exist upon the distribution
of the shares to the shareholders of Metro One Development, Inc. These
beneficiaries shall receive distributions consistent with their pro rata
ownership of Metro One Development, Inc. common stock as of the date our
shares are traded on the Over-the-Counter Bulletin Board. In order to be
quoted on the OTCBB we must find a market maker that will file an application
on our behalf, there are no guarantees that we will find a market maker. Even
if we find a market maker which files an application on our behalf, there is
no guarantee that: (i) the application will be accepted; (ii) our stock will
become quoted; or (iii) a market for our stock will develop.
The selling stockholders provided services and commitments for services in
various areas including market trends, graphic design, logo design, web
design, product direction samples and exposure among others. Our business
plan is a fluid document and process that is constantly evolving to meet
demands. We are currently ready to proceed once proper funding from the
public market is available.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our Articles of Incorporation authorize us to issue 500,000,000 shares of
common stock, par value $0.0001 per share.
Miscellaneous Rights and Provisions. There are no preemptive rights,
subscription rights, or redemption provisions relating to the shares and
none of the shares carries any liability for further calls.
17
Dividends. Holders of shares are entitled to receive dividends in cash,
property or shares when and if the Board of Directors declares dividends out
of funds legally available therefore.
Voting. A quorum for any meeting of shareholders is a majority of shares then
issued and outstanding and entitled to be voted at the meeting. Holders of
shares are entitled to one vote, either in person or by proxy, per share.
Liquidation, dissolution, winding up. Upon our liquidation, dissolution or
winding up, any assets will be distributed to the holders of shares after
payment or provision for payment of all our debts, obligations or liabilities.
INTEREST OF NAMED EXPERTS AND COUNSEL
Gersten Savage LLP has issued an opinion on the validity of the shares offered
by this prospectus, which has been filed as an Exhibit to this prospectus with
Gersten Savage LLP's consent.
DeJoya Griffith & Company, LLC of Henderson, NV, have audited our financial
statements for the periods ended December 31, 2009, March 31, 2010 and since
inception (April 3, 2009) to March 31, 2010, and presented its audit report
dated June 17, 2010, regarding such audit which is included with this
prospectus with DeJoya Griffith & Company's consent as experts in accounting
and auditing.
No expert or counsel within the meaning of those terms under Item 509 of
Regulation S-B will receive a direct or indirect interest in our Company or
was a promoter, underwriter, voting trustee, director, officer, or employee of
our Company. Nor does any such expert have any contingent based agreement with
us or any other interest in or connection to us.
DESCRIPTION OF BUSINESS
HISTORY
We incorporated in the State of Delaware on April 3, 2009 and commenced
business, as Innovative Product Opportunities Inc.
OUR BUSINESS
Our business is to be a service only product development firm to meet the
needs of new and emerging product ideas available for sale today and in the
future. Our Certified Engineering Technicians can participate in the creation
of products, from hand sketches and design through prototyping and
construction. We offer project management to assist our client to produce
finished parts ready to market in numerous industries including, but not
limited to, consumer and household goods, office products, furniture, and
toys. We believe that we will be able to deliver a complete solution to
startup and development stage companies.
We have utilized the services of our selling shareholders and have started
the implementation of our business plan. Some of our selling shareholders
have provided us with the necessary information and beta versions of gesture
based software, graphic art concepts for the development of our first
customers design of a new interactive displays concept.
Our business plan does not include engaging in, and we currently have no
plans to engage in, a merger or acquisition with any other company, entity
or person.
18
RESEARCH AND DEVELOPMENT
We have not spent any funds on research and development activities since our
inception on April 3, 2009.
EMPLOYEES
As of September 21, 2010, we had three employees. All three employees are
part-time. We believe that our relations with our employees are good.
CUSTOMERS
We intend to market our services via trade and industry publications to attract
clients from industries including, but not limited to, consumer and household
goods, office products, furniture, and toys. In general, the clients to whom
we market our services also can design and produce their products themselves
or direct through our contacts.
We currently have one customer who has engaged our services for the design and
possible product sourcing for a detailed interactive electronic touch screen
display housing.
WHOLESALE OPERATIONS
We currently do not have any wholesale operations. As we develop potential
clients we will offer to wholesale their products in bulk to contacts in North
America and the Orient and we will develop these contacts as it suits the
potential client requirements.
COMPETITION
We compete with other designers who offer one or more
services competitive with the service we intend to sell. Our principal means
of competition are our quality, reliability, and
value-added services, including industry contacts and know how
The product development industry is competitive, characterized by the
frequent introduction of new products and includes numerous domestic and
foreign competitors, some of which are substantially larger and have greater
financial and other resources than we do. We compete principally on the basis
of offering quality products at competitive prices and providing high quality
customer service. Our competition includes:
* Ross + Doell
* Lore Product Design
* SZID Design
* C3 Design
PRODUCT DEVELOPMENT
We have received technical knowledge from Metro One Development Inc., an
interactive out of home media company giving the consumer more control over
their media experience and creating highly entertaining branding displays
that respond to the physical movements of the consumer. They are sharing
their knowledge on interactive displays they have developed in an effort for
us to provide them with new touch screen display housing. Among the
information provided by Metro One was technical knowledge and parameters
relating to inferred light sources required, for the software to recognize
the touch and gesture user interface. This knowledge of the inferred light,
software and electronic details will allow us to attract new clients
developing similar electronic products. We do not intend to develop any
products until we raise additional funding.
19
MANUFACTURING AND PRODUCT SOURCING
Most supplies used in the manufacturing process are readily available from any
number of local and international suppliers, at competitive prices. Delivery
of product will vary depending on source and quantity required.
We have not identified or retained any suppliers or vendors. we rely on the
performance and cooperation of independent suppliers and vendors of raw
materials whose services are and will be a material part of our designs. We
rely on these subcontractors to manufacture components for our designs that
are all based on purchase orders, which the subcontractors can accept or
reject. The role any of the multitude of suppliers will play in our business
depends on the type of and needs of any potential product design we create
and will be a fluid list sourced and created on an as needed basis. We have
many contacts in many industries that we rely on for technical expertise when
required. This could be a simple catalogue or in depth engineering resources
depending on the project. We do not have any agreements in place with any
potential supplier.
REPORTS TO SECURITY HOLDERS
This registration statement, including all exhibits, and other materials we
file with the Securities and Exchange Commission, may be inspected without
charge, and copies of these materials may also be obtained upon the payment
of prescribed fees, at the SEC's Public Reference Room at 100 F Street, NE,
Washington, DC 20549, on official business days during the hours of 10 a.m.
to 3 p.m. You may obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an
Internet site that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
Commission. Copies of all of our filings with the Commission may be viewed on
the SEC's Internet web site at http://www.sec.gov.
For so long as we are a reporting company, we will be required to file annual
reports with the SEC, containing audited financial statements. However, unless
we register our common stock under Section 12(g) of the Exchange Act, we will
not be required to deliver an annual report containing audited financial
statements to security holders. We currently have no plans to register our
common stock under Section 12(g) of the Exchange Act. If we are not required
to deliver an annual report to security holders, we do not intend to
voluntarily deliver annual reports to security holders containing audited
financial statements.
DESCRIPTION OF PROPERTY
On September 1, 2010 we moved into a shared office in Mississauga,
Ontario. The premises are rented on a month to month basis at a rental
rate of $250 per month.
LEGAL PROCEEDINGS
We may be involved from time to time in ordinary litigation, negotiation and
settlement matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation against us
or our officers and directors in their capacity as such that could have a
material impact on our operations or finances.
20
MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
As of the date of this prospectus, no established public trading market exists
for our securities. We have issued 31,000,000 shares of common stock since
our inception on April 3, 2009. All of these shares were restricted when
issued. We intend to register 11,000,000 of these shares in this
registration statement for sale by the selling security holders. We have
no common equity subject to outstanding purchase options or warrants.
We cannot guarantee that a trading market for our common stock will ever
develop or, if a market does develop, that it will continue.
NUMBER OF STOCKHOLDERS
The number of record holders of our common stock as of September 21, 2010 was
approximately 12, not including nominees of beneficial owners.
DIVIDEND POLICY
We have not paid dividends on our common stock and we do not anticipate paying
dividends on our common stock in the foreseeable future. We intend to retain
our future earnings, if any, to finance the growth of our business.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We have not adopted any compensation plan under which equity securities are
authorized for issuance.
21
FINANCIAL STATEMENTS
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
BALANCE SHEETS
(Restated -
Note 6)
June 30, December 31,
2010 2009
(unaudited) (audited)
------------ ------------
ASSETS
Current assets
Cash $ -- $ --
Investment securities available-for-sale, at
fair value 1,071,000 --
------------ ------------
Total current assets 1,071,000 --
------------ ------------
Total assets $ 1,071,000 $ --
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Income taxes payable $ 85,750 $ --
Deferred income taxes 249,900 --
----------- ------------
Total current liabilities 335,650 --
------------ ------------
Total liabilities 335,650 --
------------ ------------
Stockholders' equity
Preferred stock; $0.001 par value;
1,000,000 shares authorized,
-0- issued and outstanding -- --
Common stock; $0.0001 par value;
500,000,000 shares authorized,
31,000,000 shares and 20,000,000 shares
issued and outstanding as of June 30,2010
and December 31, 2009, respectively 3,100 2,000
Additional paid-in-capital 108,900 --
Accumulated other comprehensive income 464,100 --
Retained earnings (deficit)
accumulated during development stage 159,250 (2,000)
------------ ------------
Total stockholders' equity 735,350 --
------------ ------------
Total liabilities and stockholders' equity $ 1,071,000 $ --
============ ============
The accompanying footnotes are an integral part of these financial statements.
F1
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(Restated -
Note 6)
From From
(Restated - (Restated - inception inception
Note 6) Note 6) (April 3, (April 3,
For the three For the six 2009) 2009)
months ended months ended through through
June 30, June 30, June 30, June 30,
2010 2010 2009 2010
--------- ---------- --------- ---------
Sales $ 21,000 $ 21,000 $ -- $ 21,000
Cost of sales -- -- -- --
---------- ---------- ---------- ---------
Gross profit 21,000 21,000 -- 21,000
---------- ---------- ---------- ---------
Operating expenses
General and administrative 110,000 110,000 2,000 112,000
---------- ---------- ---------- ---------
Total expenses 110,000 110,000 2,000 112,000
---------- ---------- --------- ----------
Net operating loss (89,000) (89,000) (2,000) (91,000)
---------- ---------- --------- ---------
Other income
Gain on accounts receivable
settlement 336,000 336,000 -- 336,000
---------- ---------- ---------- ----------
Total other income 336,000 336,000 -- 336,000
---------- ---------- ---------- ----------
Income (loss) before taxes 247,000 247,000 (2,000) 245,000
Provision for income taxes 85,750 85,750 -- 85,750
---------- ---------- ---------- ----------
Net income (loss) 161,250 161,250 (2,000) 159,250
Other comprehensive income,
net of tax Net unrealized
gain on investment
securities, available for
sale, net of tax of
$249,900 464,100 464,100 -- 464,100
---------- ---------- ---------- ----------
Comprehensive income $ 625,350 $ 625,350 $ (2,000) $ 623,350
========== ========== ========== ==========
Basic and diluted net
income per common share $ 0.01 $ 0.01 $ 0.00
=========== ========== ==========
Weighted average number
of common shares outstanding
- basic and diluted 25,681,324 22,856,359 20,000,000
========== ========== ===========
The accompanying footnotes are an integral part of these financial statements.
F2
Innovative Product Opportunities Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
From Inception (April 3, 2009) to June 30, 2010
(Unaudited)
Retained (Restated -
Earnings Note 6)
(Deficit) Accumulated
Accumulated Other
Additional During Compre- Total
Preferred Stock Common Stock Paid-in Development hensive Stockholders'
Shares Amount Shares Amount Capital Stage Income Equity
---------- ---------- ---------- --------- --------- --------- ----------- ---------
Balance,
April 3, 2009 -- $ -- -- $ -- $ -- $ -- $ -- $ --
Common stock issued
to founder, $0.0001
per share,
April 3, 2009 -- -- 20,000,000 2,000 -- -- -- 2,000
Net loss -- -- -- -- -- (2,000) -- (2,000)
--------- --------- ----------- --------- --------- ---------- ----------- -----------
Balance
December 31, 2009 -- -- 20,000,000 2,000 -- (2,000) -- --
Common stock issued
For services -- -- 11,000,000 1,100 108,900 -- -- 110,000
Net income -- -- -- -- -- 161,250 -- 161,250
Net unrealized
gain on investment
securities available-
for-sale, net of tax
of $249,900 -- -- -- -- -- -- 464,100 464,100
--------- -------- ----------- --------- --------- ---------- ----------- -----------
Balance
June 30, 2010 -- $ -- 31,000,000 $ 3,100 $ 108,900 $ 159,250 $ 464,100 $ 735,350
========= ======== =========== ========= ========= ========== =========== ===========
The accompanying footnotes are an integral part of these financial statements.
F3
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
From From
inception inception
(April 3, (April 3,
For the six 2009) 2009)
months ended through through
June 30, June 30, June 30,
2010 2009 2010
----------- ----------- ------------
Cash flows from operating activities
Net income (loss) $ 161,250 $ (2,000) $ 159,250
Adjustments to reconcile net loss
to cash used in operating activities
Stock issued to founder -- 2,000 2,000
Stock issued for services 110,000 -- 110,000
Settlement of accounts receivable
in shares of common stock of
Metro One Development, Inc. (21,000) -- (21,000)
Gain on accounts receivable
settlement (336,000) -- (336,000)
Change in operating assets and liabilities
Increase in income tax payable 85,750 -- 85,750
------------ ----------- ------------
Net cash used in operating
activities -- -- --
------------ ----------- ------------
Cash flow from financing activities -- -- --
------------ ----------- ------------
Cash flow from investing activities -- -- --
------------ ----------- ------------
Net change in cash -- -- --
Cash, beginning of the period -- -- --
------------ ---------- ------------
Cash, end of the period $ -- $ -- $ --
============ =========== ============
The accompanying footnotes are an integral part of these financial statements.
F4
Innovative Product Opportunities Inc.
(A Development Stage Enterprise)
(Unaudited)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Innovative Product Opportunities, Inc. (the "Company" or "Innovative") was
incorporated on April 3, 2009 in the State of Delaware and established a
fiscal year end of December 31. The Company is a development stage enterprise
organized to provide product development to meet the needs of new and emerging
product ideas available for sale today. The Company is currently in the
development stage as defined in Financial Accounting Standards Board ("FASB")
Accounting Standard Codification ("ASC") 915. All activities of the Company to
date relate to its organization and share issuances.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements present the balance sheets, statements of operations,
stockholders' equity (deficit) and cash flows of the Company. These financial
statements are presented in United States dollars and have been prepared in
accordance with accounting principles generally accepted in the United States.
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 does not have
significant operations or a source of revenue
sufficient to cover its operation costs and allow it to continue as a going
concern. The Company has retained earnings (deficit) accumulated during
development stage at June 30, 2010 and December 31, 2009 of $159,250 and
$(2,000), respectively. The retained earnings at June 30, 2010 of $159,250 is
a result of a realized gain on settlement of accounts receivable of $336,000
upon receipt of 21,000,000 shares of common stock of Metro One Development,
Inc. and similar gains are not likely to recur in the future. The Company will
be dependent upon the raising of additional capital through placement of its
common stock in order to implement its business plan. There can be no assurance
that the Company will be successful in this situation. Accordingly, these
factors raise substantial doubt as to the Company's ability to continue as a
going concern. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts
or amounts and classifications of liabilities that might result from this
uncertainty. The Company is funding its initial operations by way of loans
from its Chief Executive Officer. The Company's officers and directors have
committed to advancing certain operating costs of the Company.
F5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers highly
liquid financial instruments purchased with a maturity of three months or
less to be cash equivalents.
INVESTMENT SECURITIES
Equity securities are classified as available for sale and are stated at
fair value with unrealized gains and losses excluded from earnings and
reported in other comprehensive income, net of tax. All available for sale
securities are classified as current assets as they are available to support
the Company's current operating needs in the next 12 months. Realized gains
and losses on the sale of investment securities are recognized at the
settlement date using the specific identification method and are included in
the statements of operations.
In accordance with ASC 320-10, "Investments-Debt and Equity Securities," the
Company evaluates its securities portfolio for other-than-temporary impairment
("OTTI") throughout the year. Each investment that has a fair value less than
the book value is reviewed on a quarterly basis by Management. Management
considers at a minimum the following factors that, both individually or in
combination, could indicate that the decline is other-than-temporary: (a)
the Company has the intent to sell the security; (b) it is more likely than
not that it will be required to sell the security before recovery; and (c)
the Company does not expect to recover the entire amortized cost basis of
the security. Among the factors that are considered in determining intent
is a review of capital adequacy, interest rate risk profile and liquidity
at the Corporation. An impairment charge is recorded against individual
securities if the review described above concludes that the decline in
value is other-than-temporary.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with ASC
Topic 605 - Revenue Recognition. Under Topic 605, revenue is recognized at
the point of passage to the customer of title and risk of loss, there is
persuasive evidence of an arrangement, the sales price is determinable, and
collection of the resulting receivable is reasonably assured. The Company
generally recognizes revenue at the time of delivery of goods. Sales are
reflected net of discounts and estimated returns. Amounts billed to customers
for shipping and handling are recorded as sales revenues. Costs incurred for
shipping and handling are included in cost of sales.
The Company recognizes revenue from services when persuasive evidence of an
arrangement exists; the sales price is determinable; and the resulting
receivable is reasonably assured. If we receive a payment in respect of
services prior to the time the contract is consummated, we recognize this
as an advance from a customer until such time the contract is finalized, it
becomes revenue to the extent the services are rendered.
INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740,
Income Taxes. Under the assets and liability method of FASB ASC 740, deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those temporary differences are expected to be
recovered or settled. The Company provides a valuation allowance, if necessary,
to reduce deferred tax assets to their estimated realizable value.
NET LOSS PER SHARE
Basic net income (loss) per share includes no dilution and is computed by
dividing loss available to common stockholders by the weighted average number
of common shares outstanding for the period. Dilutive loss per share reflects
the potential dilution of securities that could share in the losses of the
Company. Because the Company does not have any potentially dilutive
securities, the accompanying presentation is only of basic loss per share.
F6
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with FASB ASC 830, Foreign Currency Matters, foreign denominated monetary
assets and liabilities are translated to their United States dollar
equivalents using foreign exchange rates which prevailed at the balance sheet
date. Non-monetary assets and liabilities are translated at exchange rates
prevailing at the transaction date. Revenue and expenses are translated at
average rates of exchange during the periods presented. Related translation
adjustments are reported as a separate component of stockholders' equity
(deficit), whereas gains or losses resulting from foreign currency
transactions are included in results of operations.
STOCK-BASED COMPENSATION
The Company measures stock-based compensation at the grant date based on the
fair value of the award and recognizes stock-based compensation expense over
the requisite service period.
The Company also grants awards to non-employees and determines the fair value
of such stock-based compensation awards granted as either the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. If the fair value of the equity
instruments issued is used, it is measured using the stock price and other
measurement assumptions as of the earlier of (1) the date at which a commitment
for performance by the counterparty to earn the equity instruments is reached,
or (2) the date at which the counterparty's performance is completed.
The Company has not adopted a stock option plan and has not granted any stock
options.
FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of FASB ASC 820, Fair Value Measurements
and Disclosures, and FASB ASC 825, Financial Instruments, the Company has
determined the estimated fair value of financial instruments using
available market information and appropriate valuation methodologies.
FASB ASC 820 defines fair value as the price that would be received to sell
an asset or paid to transfer a liability (exit price) in an orderly
transaction between market participants at the measurement date. The
statement establishes market or observable inputs as the preferred sources
of values, followed by assumptions based on hypothetical transactions in
the absence of market inputs. The statement requires fair value measurements
be classified and disclosed in one of the following categories:
Level 1 - Quoted prices in active markets for identical assets and liabilities.
Level 2 - Quoted prices in active markets for similar assets and liabilities,
quoted prices for identical or similar instruments in markets that are not
active and model-derived valuations whose inputs are observable or whose
significant value drivers are observable.
Level 3 - Significant inputs to the valuation model are unobservable.
Financial assets and liabilities are classified based on the lowest level of
input that is significant to the fair value measurement.
The fair value of financial instruments classified as current assets or
liabilities approximate their carrying value due to the short-term maturity
of the instruments.
F7
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investment securities available-for-sale comprise of 21,000,000 shares of
common stock of Metro One Development, Inc. (`Metro One`) The fair value of
Metro One shares of $1,071,000 is based on its quoted price on June 30, 2010
of $0.06 per share adjusted for a 15% lack of liquidity discount since the
Metro One shares issued are unregistered securities and the length of time
to liquidation these shares have in relation to the lack of trading volume.
Metro One is a listed company with its common stock trading on Other
Over-the-Counter. Metro One shares are classified as Level 3 in the fair
value hierarchy.
Innovative on May 3, 2010 invoiced Metro One for consulting services valued
at $21,000. On May 3, 2010, for payment of these consulting services, Metro
One agreed to issue 21,000,000 restricted shares of its common stock to
Innovative. The value of the Metro One shares is valued based on its
closing price of $0.02 per share on May 3, 2010 adjusted for a 15% liquidity
discount since the Metro One shares issued are unregistered securities.
The unrealized gain in Metro One shares of $464,100 ($714,000 pre-tax
unrealized gain less deferred income tax expense of $249,900) during the
period ended June 30, 2010 is recorded as other comprehensive income in
the statements of operations and comprehensive income.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05,
"Measuring Liabilities at Fair Value" (codified within ASC 820 - Fair Value
Measurements and Disclosures). ASU 2009-05 amends the fair value and
measurement topic to provide guidance on the fair value measurement of
liabilities. ASU 2009-05 is effective for interim and annual periods
beginning after August 26, 2009. The adoption of ASU 2009-05 did not have
a material impact on our financial position, results of operations or cash
flows.
In October 2009, the FASB issued ASU No. 2009-13, "Multiple Deliverable
Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force"
(codified within ASC Topic 605). ASU 2009-13 addresses the accounting for
multiple-deliverable arrangements to enable vendors to account for products
or services (deliverables) separately rather than as a combined unit.
ASU 2009-13 is effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after
June 15, 2010, with early adoption permitted. The adoption of ASU 2009-13
did not have a material impact on our financial position, results of
operations or cash flows.
In October 2009, the FASB issued ASU 2009-15, "Accounting for Own-Share
Lending Arrangements in Contemplation of Convertible Debt Issuance or Other
Financing". ASU 2009-15 amends the accounting and reporting guidance for debt
(and certain preferred stock) with specific conversion features or other
options. ASU 2009-15 is effective for fiscal years beginning on or after
December 15, 2009. The adoption of ASU 2009-15 did not have a material
impact on our financial position, results of operations or cash flows.
In December 2009, the FASB issued ASU 2009-17, "Consolidations (Topic 810)
- - Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities". ASU 2009-17 changes how a reporting entity determines
when an entity that is insufficiently capitalized or is not controller
through voting (or similar rights) should be consolidated. ASU 2009-17
also requires a reporting entity to provide additional disclosures about
its involvement with variable interest entities and any significant changes
in risk exposure due to that involvement. ASU 2009-17 is effective at the
start of a reporting entity's first fiscal year beginning after
November 15, 2009, or January 1, 2010, for a calendar year entity. Early
adoption is not permitted. The adoption of ASU 2009-17 did not have a
material impact on our financial position, results of operations or cash
flows.
In January 2010, the FASB issued ASU 2010-01, "Equity (Topic 505) -
Accounting for Distributions to Shareholders with Components of Stock
and Cash". ASU 2010-01 clarifies that the stock portion of a distribution
to shareholders that allows them to elect to receive cash or shares with
a potential limitation on the amount of cash that all shareholders can
elect to receive is considered a share issuance. ASU 2010-01 is effective
for interim and annual periods ending on or after December 15, 2009 and
should be applied on a retrospective basis. The adoption of ASU 2010-01
did not have a material impact on our financial position, results of
operations or cash flows.
F8
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In January 2010, the FASB issued ASU 2010-02, "Consolidation (Topic 810)
- - Accounting and Reporting for Decreases in Ownership of a Subsidiary - A
Scope Clarification". ASU 2010-02 clarifies the scope of the decrease in
ownership provisions of Subtopic 810 and expands the disclosure requirements
about deconsolidation of a subsidiary or de-recognition of a group of assets.
ASU 2010-02 is effective beginning in the first interim of annual reporting
period ending on or after December 15, 2009. The amendments in ASU 2010-02
must be applied retrospectively to the first period that an entity adopted
SFAS 160. The adoption of ASU 2010-02 did not have a material impact on our
financial position, results of operations or cash flows.
In January 2010, the FASB issued ASU No. 2010-06, "Improving Disclosures
about Fair Value Measurements" (codified within ASC 820 -Fair Value
Measurements and Disclosures). ASU 2010-06 improves disclosures originally
required under SFAS No. 157. ASU 2010-16 is effective for interim and annual
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those years. The adoption of ASU 2010-06 did not have a material
impact on our financial position, results of operations or cash flows.
In March 2010, the FASB issued ASU No. 2010-11, "Derivatives and Hedging
(Topic 815): Scope Exception Related to Embedded Credit Derivatives"
(codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves
disclosures originally required under SFAS No. 161. ASU 2010-11 is effective
for interim and annual periods beginning after June 15, 2010. The adoption of
ASU 2010-11 is not expected to have any material impact on our financial
position, results of operations or cash flows.
In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition -
Milestone Method (Topic 605): Milestone Method of Revenue Recognition"
(codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides
guidance on defining a milestone and determining when it may be appropriate
to apply the milestone method of revenue recognition for research or
development transactions. ASU 2010-17 is effective for interim and annual
periods beginning after June 15, 2010. The adoption of ASU 2010-17 is not
expected to have any material impact on our financial position, results of
operations or cash flows.
NOTE 3 - STOCK-BASED COMPENSATION
On April 3, 2009, the Company issued 20,000,000 shares of its common stock
to its founder and Chief Executive Officer at $0.0001 per share to reimburse
$459 of incorporation costs and to pay $1,541 in exchange for services rendered
to the Company. Total incorporation costs and services of $2,000 are recorded
as general and administrative expenses in the statement of operations. The fair
value of the shares was determined by management of the Company on
the date of issue of the stock grant. On April 3, 2009, the shares of the
Company were not trading and there were no arm's length transactions in the
Company shares with an independent party. As such, a quoted market price or
a recent transaction in the Company shares was not available to estimate fair
value. On the date of issue of the stock grant, the Company was recently formed
or in the process of being formed and possessed no assets. The fair value of
the Company shares was estimated to be equal to the par value of $0.0001 per
share of the Company's common stock.
F9
The Company issued 1,000,000 shares of common stock to
Nadav Elituv on May 14, 2010 in exchange for software development
services related to interactive displays valued at $10,000.
The Company issued 1,000,000 shares of common stock to
The Cellular Connection, Ltd. on May 14, 2010 in exchange for
business development services related to going public valued at $10,000.
Stuart Turk, as the principal owner of The Cellular Connection, Ltd., has
voting and dispositive control over these shares.
The Company issued 1,000,000 shares of common stock to
Bradley Southam on May 14, 2010 in exchange for graphic arts
development services related to interactive displays valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Evan Schwartzberg on May 14, 2010 in exchange for accounting and
bookkeeping services valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Brett W. Gold on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Al Kau on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Larry Burke on May 14, 2010 in exchange for design and technical services
related to potential customer usage valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Aaron Shrira on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Danielle Goose on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock to
William Reil on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock to
Metro One Development, Inc. in trust on May 14, 2010 in exchange for
technical knowledge on its interactive displays valued at $10,000.
On May 14, 2010, the shares of the Company were not trading and there were
no arm's length transactions in the Company shares with an independent party.
As such, a quoted market price or a recent transaction in the Company shares
was not available to estimate fair value. As such, the Company determined
the value of the consulting services on May 14, 2010 was a more reliable
measure of fair value. The value of these services totaling $110,000 is
recorded as general and administrative expenses in the statement of
operations.
F10
NOTE 4 - INCOME TAXES
The following table presents income before taxes and income tax expense as
well as the taxes charged to shareholders equity:
Six months
Ended Period Ended
June 30, 2010 June 30, 2009
------------- -------------
Income (loss) before taxes $ 247,000 $ (2,000)
=========== ============
Income tax expense charged
to income (loss) before taxes $ 85,750 $ --
=========== ===========
Income tax charged directly to
and netted against other
comprehensive income $ 249,900 $ --
=========== ===========
A reconciliation of the expected consolidated income tax expense, computed
by applying a 35% U.S. Federal corporate income tax rate to income before
taxes to income tax expense is as follows:
Six months
Ended Period Ended
June 30, 2010 June 30, 2009
----------- ------------
Expected income tax expense $ 86,450 $ (700)
Change in valuation allowance (700) 700
----------- ------------
$ 85,750 $ --
=========== ============
The tax effects of temporary differences that give rise to deferred tax
liabilities are as follows:
Six months
Ended Period Ended
June 30, 2010 June 30, 2009
----------- ------------
Current deferred income tax liability
Investment securities available-for
-sale, at fair value $ 249,900 $ --
=========== ============
At June 30, 2010 and 2009, the Company had available a net-operating loss
carry-forward for Federal tax purposes of approximately $0 and $2,000,
respectively, which may be applied against future taxable income, if any,
at various times through 2029. Certain significant changes in ownership of
the Company may restrict the future utilization of these tax loss
carry-forwards. At June 30,2009, the Company has a deferred tax asset of
$700 representing the benefit of its net operating loss carry-forward. The
Company has not recognized the tax benefit because realization of the tax
benefit is uncertain and thus a valuation allowance has been fully provided
against the deferred tax asset.
The Company recognizes interest and penalties, if any, related to uncertain
tax positions in general and administrative expenses. No interest and
penalties related to uncertain tax positions were accrued at June 30, 2010
and 2009.
The tax year 2009 remains open to examination by the major taxing jurisdictions
in which the Company operates. The Company expects no material changes to
unrecognized tax positions within the next twelve months.
NOTE 5 - STOCKHOLDERS' EQUITY (DEFICIT)
The Company is authorized to issue an aggregate of 500,000,000 common shares
with a par value of $0.0001 per share and 1,000,000 shares of preferred
stock with a par value of $0.001 per share. No preferred shares have been
issued.
NOTE 6 - RESTATEMENT
The balance sheet as of June 30, 2010 and statement of operations and
comprehensive income for the three and six months ended June 30, 2010 and from
inception (April 3, 2009) through June 30, 2010 included herein were restated
to reflect the effect of changes to the original accounting for the valuation
of Metro One Developments Inc. common stock ('Metro One shares'). The original
accounting measured the fair value based on the closing price of Metro One
shares on June 30, 2010. Metro One shares were initially valued upon receipt
at May 3, 2010 at the closing price adjusted for a 15% lack of liquidity
discount. As the circumstances resulting in a liquidity discount at
May 3, 2010 have not changed at June 30, 2010, the Company has determined
that the closing price of Metro One shares should have been adjusted for a
15% lack of liquidity discount at June 30, 2010 in order to be consistent
valuation methodology used at May 3, 2010.
The effect of these changes impacted the balance sheet and statement of
operations and comprehensive income. These changes do not impact the cash
flows of the Company. The balance sheet as of June 30, 2010 and statement of
operations and comprehensive income for the three and six months ended
June 30, 2010 and from inception (April 3, 2009) through June 30, 2010 has
been restated as summarized below:
As
Previously As
Reported Adjustment Restated
Balance Sheet as of June 30, 2010
Investment securities available-for-sale,
at fair value $1,260,000 $ 189,000 $ 1,071,000
Deferred income taxes $ 316,050 $ 66,150 $ 249,900
Statement of Operations and Comprehensive Income for the
the three and six months ended June 30, 2010 and from inception
(April 3, 2010) through June 30, 2010
Other comprehensive income $ 586,950 $ 122,850 $ 464,100
F11
FINANCIAL STATEMENTS
DE JOYA GRIFFITH & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
Report of Independent Registered Public Accounting Firm
To The Board of Directors and Stockholders
Innovative Product Opportunities, Inc.
Henderson, NV 89052
We have audited the accompanying balance sheets of Innovative Product
Opportunities, Inc. (A Development Stage Company) as of March 31, 2010 and
December 31, 2009, and the related statements of operations, stockholders'
deficit, and cash flows for the three months ended March 31, 2010, from
inception (April 3, 2009) through December 31, 2009, and from inception
(April 3, 2009) through March 31, 2010. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audit provides 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 Innovative Product
Opportunities, Inc. (A Development Stage Company) as of March 31, 2010 and
December 31, 2009, and the related statements of operations, stockholders'
deficit, and cash flows for the three months ended March 31, 2010, from
inception (April 3, 2009) through December 31, 2009, and from inception
(April 3, 2009) through March 31, 2010, in conformity with accounting
principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from operations, which
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
De Joya Griffith & Company, LLC
/s/ De Joya Griffith & Company, LLC
Henderson, Nevada
June 17, 2010
F12
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
BALANCE SHEETS
March 31, December 31,
2010 2009
(audited) (audited)
------------ ------------
ASSETS
Current assets
Cash $ -- $ --
------------ ------------
Total current assets -- --
------------ ------------
Total assets $ -- $ --
============ ============
LIABILITIES AND STOCKHOLDER DEFICIT
Current liabilities
Accounts payable and accrued expenses $ -- $ --
Due to related party -- --
------------ ------------
Total current liabilities -- --
------------ ------------
Total liabilities -- --
------------ ------------
Stockholder deficit
Preferred stock; $0.001 par value;
1,000,000 shares authorized,
-0- issued and outstanding -- --
Common stock; $0.0001 par value;
500,000,000 shares authorized,
20,000,000 issued and outstanding 2,000 2,000
Deficit accumulated during
development stage (2,000) (2,000)
------------ ------------
Total stockholder deficit -- --
------------ ------------
Total liabilities and stockholder deficit $ -- $ --
============ ============
The accompanying footnotes are an integral part of these financial statements.
F13
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Audited)
From From
Inception inception
(April 3, (April 3,
For the three 2009) 2009)
months ended through through
March 31, December 31, March 31,
2010 2009 2010
------------ ------------ ------------
Sales $ -- $ -- $ --
Cost of sales -- -- --
------------ ------------ ------------
Gross profit -- -- --
------------ ------------ ------------
Operating expenses
General and administrative -- 2,000 2,000
------------ ------------ ------------
Total expenses -- 2,000 2,000
------------ ------------ ------------
Net loss $ -- $ (2,000) $ (2,000)
============ ============ ============
Basic net loss
per common share $ (0.00) $ (0.00)
============ ============
Weighted average number
of common shares outstanding
- basic and diluted 20,000,000 20,000,000
============ ============
The accompanying footnotes are an integral part of these financial statements.
F14
Innovative Product Opportunities Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT
From Inception (April 3, 2009)to March 31, 2010
(Audited)
Deficit
Accumulated
Additional During Total
Preferred Stock Common Stock Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ---------- ---------- --------- --------- --------- ----------
Balance,
April 3, 2009 -- $ -- -- $ -- $ -- $ -- $ --
Common stock issued
to founder, $0.0001
per share,
April 3, 2009 -- -- 20,000,000 2,000 -- -- 2,000
Net loss -- -- -- -- -- (2,000) (2,000)
--------- --------- ----------- --------- --------- ---------- ----------
Balance
December 31, 2009
-- -- 20,000,000 2,000 -- (2,000) --
Net loss -- -- -- -- -- -- --
--------- --------- ----------- --------- --------- --------- -----------
Balance
March 31, 2010 -- $ -- 20,000,000 $ 2,000 $ -- $ (2,000) $ --
========= ======== =========== ========= ========= ========== ==========
The accompanying footnotes are an integral part of these financial statements.
F15
Innovative Product Opportunities, Inc.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Audited)
From From
Inception inception
(April 3, (April 3,
2009) 2009)
For the three
months ended through through
March 31, December 31, March 31,
2010 2009 2010
----------- ----------- ------------
Cash flows from operating activities
Net loss $ -- $ (2,000) $ (2,000)
Adjustments to reconcile net loss
to cash used in operating activities
Shares issued to founder -- 2,000 2,000
------------ ----------- ------------
Net cash used in operating
activities -- -- --
------------ ----------- ------------
Cash flow from financing activities -- -- --
------------ ----------- ------------
Cash flow from investing activities -- -- --
------------ ----------- ------------
Net change in cash -- -- --
Cash, beginning of the period -- -- --
------------ ---------- ------------
Cash, end of the period $ -- $ -- $ --
============ =========== ============
The accompanying footnotes are an integral part of these financial statements.
F16
Innovative Product Opportunities Inc.
(A Development Stage Enterprise)
(Audited)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Innovative Product Opportunities, Inc. (the "Company" or "Innovative") was
incorporated on April 3, 2009 in the State of Delaware and established a
fiscal year end of December 31. The Company is a development stage enterprise
organized to provide product development to meet the needs of new and emerging
product ideas available for sale today. The Company is currently in the
development stage as defined in Financial Accounting Standards Board ("FASB")
Accounting Standard Codification ("ASC")915. All activities of the Company to
date relate to its organization and share issuances.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements present the balance sheets, statements of operations,
stockholders' deficit and cash flows of the Company. These financial statements
are presented in United States dollars and have been prepared in accordance
with accounting principles generally accepted in the United States.
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 does not have
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 has a deficit accumulated during development stage at
December 31, 2009 and March 31, 2010 of $2,000. The Company will
be dependent upon the raising of additional capital through placement of
its common stock in order to implement its business plan. There can be no
assurance that the Company will be successful in this situation.
Accordingly, these factors raise substantial doubt as to the Company's
ability to continue as a going concern. These financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classifications of liabilities
that might result from this uncertainty. The Company is funding its
initial operations by way of loans from its Chief Executive Officer.
The Company's officers and directors have committed to advancing certain
operating costs of the Company.
F17
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers highly
liquid financial instruments purchased with a maturity of three months or
less to be cash equivalents.
INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740,
Income Taxes. Under the assets and liability method of FASB ASC 740, deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those temporary differences are expected to be
recovered or settled. The Company provides a valuation allowance, if necessary,
to reduce deferred tax assets to their estimated realizable value.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common
shares outstanding for the period. Dilutive loss per share reflects the
potential dilution of securities that could share in the losses of the
Company. Because the Company does not have any potentially dilutive
securities, the accompanying presentation is only of basic loss per share.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with FASB ASC 830, Foreign Currency Matters, foreign denominated monetary
assets and liabilities are translated to their United States dollar
equivalents using foreign exchange rates which prevailed at the balance sheet
date. Non-monetary assets and liabilities are translated at exchange rates
prevailing at the transaction date. Revenue and expenses are translated at
average rates of exchange during the periods presented. Related translation
adjustments are reported as a separate component of stockholders' equity
(deficit), whereas gains or losses resulting from foreign currency
transactions are included in results of operations.
F18
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STOCK-BASED COMPENSATION
The Company measures stock-based compensation at the grant date based on the
fair value of the award and recognizes stock-based compensation expense over
the requisite service period.
The Company also grants awards to non-employees and determines the fair value
of such stock-based compensation awards granted as either the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. If the fair value of the equity
instruments issued is used, it is measured using the stock price and other
measurement assumptions as of the earlier of (1) the date at which a commitment
for performance by the counterparty to earn the equity instruments is reached,
or (2) the date at which the counterparty's performance is completed.
The Company has not adopted a stock option plan and has not granted any stock
options.
FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of FASB ASC 820, Fair Value Measurements
and Disclosures, and FASB ASC 825, Financial Instruments, the Company has
determined the estimated fair value of financial instruments using
available market information and appropriate valuation methodologies. The
fair value of financial instruments classified as current assets or
liabilities approximate their carrying value due to the short-term maturity
of the instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2009, the FASB issued SFAS No. 167, -Amendments to FASB Interpretation
No. 46(R) (SFAS 167) (codified within ASC 810-Consolidation). SFAS 167 amends
the consolidation guidance applicable to variable interest entities and affects
the overall consolidation analysis under FASB Interpretation No. 46(R).
SFAS 167 is effective for fiscal years beginning after November 15, 2009.
The adoption of SFAS 167 did not have a material impact on our financial
position, results of operations or cash flows.
In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05,
"Measuring Liabilities at Fair Value" (codified within ASC 820 - Fair Value
Measurements and Disclosures). ASU 2009-05 amends the fair value and
measurement topic to provide guidance on the fair value measurement of
liabilities. ASU 2009-05 is effective for interim and annual periods
beginning after August 26, 2009. The adoption of ASU 2009-05 did not have
a material impact on our financial position, results of operations or cash
flows.
In October 2009, the FASB issued ASU No. 2009-13, "Multiple Deliverable
Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force"
(codified within ASC Topic 605). ASU 2009-13 addresses the accounting for
multiple-deliverable arrangements to enable vendors to account for products
or services (deliverables) separately rather than as a combined unit.
ASU 2009-13 is effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after
June 15, 2010, with early adoption permitted. The adoption of ASU 2009-13
did not have a material impact on our financial position, results of
operations or cash flows.
F19
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In October 2009, the FASB issued ASU 2009-15, "Accounting for Own-Share
Lending Arrangements in Contemplation of Convertible Debt Issuance or Other
Financing". ASU 2009-15 amends the accounting and reporting guidance for debt
(and certain preferred stock) with specific conversion features or other
options. ASU 2009-15 is effective for fiscal years beginning on or after
December 15, 2009. The adoption of ASU 2009-15 did not have a material
impact on our financial position, results of operations or cash flows.
In December 2009, the FASB issued ASU 2009-17, "Consolidations (Topic 810)
- - Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities". ASU 2009-17 changes how a reporting entity determines
when an entity that is insufficiently capitalized or is not controller
through voting (or similar rights) should be consolidated. ASU 2009-17
also requires a reporting entity to provide additional disclosures about
its involvement with variable interest entities and any significant changes
in risk exposure due to that involvement. ASU 2009-17 is effective at the
start of a reporting entity's first fiscal year beginning after
November 15, 2009, or January 1, 2010, for a calendar year entity. Early
adoption is not permitted. The adoption of ASU 2009-17 did not have a
material impact on our financial position, results of operations or cash
flows.
In January 2010, the FASB issued ASU 2010-01, "Equity (Topic 505) -
Accounting for Distributions to Shareholders with Components of Stock
and Cash". ASU 2010-01 clarifies that the stock portion of a distribution
to shareholders that allows them to elect to receive cash or shares with
a potential limitation on the amount of cash that all shareholders can
elect to receive is considered a share issuance. ASU 2010-01 is effective
for interim and annual periods ending on or after December 15, 2009 and
should be applied on a retrospective basis. The adoption of ASU 2010-01
did not have a material impact on our financial position, results of
operations or cash flows.
In January 2010, the FASB issued ASU 2010-02, "Consolidation (Topic 810)
- - Accounting and Reporting for Decreases in Ownership of a Subsidiary - A
Scope Clarification". ASU 2010-02 clarifies the scope of the decrease in
ownership provisions of Subtopic 810 and expands the disclosure requirements
about deconsolidation of a subsidiary or de-recognition of a group of assets
.. ASU 2010-02 is effective beginning in the first interim of annual reporting
period ending on or after December 15, 2009. The amendments in ASU 2010-02
must be applied retrospectively to the first period that an entity adopted
SFAS 160. The adoption of ASU 2010-02 did not have a material impact on our
financial position, results of operations or cash flows.
In January 2010, the FASB issued ASU No. 2010-06, "Improving Disclosures
about Fair Value Measurements" (codified within ASC 820 -Fair Value
Measurements and Disclosures). ASU 2010-06 improves disclosures originally
required under SFAS No. 157. ASU 2010-16 is effective for interim and annual
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those years. The adoption of ASU 2010-06 did not have a material
impact on our financial position, results of operations or cash flows.
F20
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In March 2010, the FASB issued ASU No. 2010-11, "Derivatives and Hedging
(Topic 815): Scope Exception Related to Embedded Credit Derivatives"
(codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves
disclosures originally required under SFAS No. 161. ASU 2010-11 is effective
for interim and annual periods beginning after June 15, 2010. The adoption of
ASU 2010-11 is not expected to have any material impact on our financial
position, results of operations or cash flows.
In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition -
Milestone Method (Topic 605): Milestone Method of Revenue Recognition"
(codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides
guidance on defining a milestone and determining when it may be appropriate
to apply the milestone method of revenue recognition for research or
development transactions. ASU 2010-17 is effective for interim and annual
periods beginning after June 15, 2010. The adoption of ASU 2010-17 is not
expected to have any material impact on our financial position, results of
operations or cash flows.
NOTE 3 - STOCK-BASED COMPENSATION
On April 3, 2009, the Company issued 20,000,000 shares of its common stock
to its founder and Chief Executive Officer at $0.0001 per share to reimburse
$459 of incorporation costs and to pay $1,541 in exchange for services rendered
to the Company. Total incorporation costs and services of $2,000 are recorded
as general and administrative expenses in the statement of operations.
The fair value of the shares was determined by management of the Company on
the date of issue of the stock grant. On April 3, 2009, the shares of the
Company were not trading and there were no arm's length transactions in the
Company shares with an independent party. As such, a quoted market price or
a recent transaction in the Company shares was not available to estimate fair
value. On the date of issue of the stock grant, the Company was recently formed
or in the process of being formed and processed no assets. The fair value of
the Company shares was estimated to be equal to the par value of $0.0001 per
share of the Company's common stock.
NOTE 4 - INCOME TAXES
At March 31, 2010 and December 31, 2009, the Company had available a
net-operating loss carry-forward for Federal tax purposes of approximately
$2,000, which may be applied against future taxable income, if any, at various
times through 2029. Certain significant changes in ownership of the Company may
restrict the future utilization of these tax loss carry-forwards. At March 31,
2010 and December 31, 2009, the Company has a deferred tax asset of
approximately $700 representing the benefit of its net operating loss
carry-forward. The Company has not recognized the tax benefit because
realization of the tax benefit is uncertain and thus a valuation allowance has
been fully provided against the deferred tax asset. The difference between the
Federal Statutory Rate of 34% and the Company's effective tax rate of 0% is
due to an increase in the valuation allowance of approximately $700 for the
period ended December 31, 2009.
NOTE 5 - STOCKHOLDERS' DEFICIT
The Company is authorized to issue an aggregate of 500,000,000 common shares
with a par value of $0.0001 per share and 1,000,000 shares of preferred
stock with a par value of $0.001 per share. No preferred shares have been
issued.
F21
NOTE 6 - SUBSEQUENT EVENT
The Company issued 1,000,000 shares of common stock that we issued to
Nadav Elituv on May 14, 2010 in exchange for software development
services related to interactive displays valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
The Cellular Connection, Ltd. on May 14, 2010 in exchange for
business development services related to going public valued at $10,000.
Stuart Turk, as the principal owner of The Cellular Connection, Ltd., has
voting and dispositive control over these shares.
The Company issued 1,000,000 shares of common stock that we issued to
Bradley Southam on May 14, 2010 in exchange for graphic arts
development services related to interactive displays valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Evan Schwartzberg on May 14, 2010 in exchange for accounting and
bookkeeping services valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Brett W. Gold on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Al Kau on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Larry Burke on May 14, 2010 in exchange for design and technical services
related to potential customer usage valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Aaron Shrira on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Danielle Goose on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
William Reil on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
The Company issued 1,000,000 shares of common stock that we issued to
Metro One Development, Inc. in trust on May 14, 2010 in exchange for
technical knowledge on its interactive displays valued at $10,000.
F22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL
DISCLOSURE OR PLAN OF OPERATION
INTRODUCTION
The following is a discussion of our financial condition and results of
operations. To the extent that our analysis contains statements that are not
of a historical nature, these statements are forward-looking statements, which
involve risks and uncertainties. The following should be read in conjunction
with our financial statements and the related notes included elsewhere in this
prospectus.
BUSINESS OVERVIEW
We incorporated on April 3, 2009 as Innovative Product Opportunities Inc. under
the laws of the State of Delaware. We are currently in the development stage.
Additionally, we have not completed development of any product. We
expect to incur losses in the foreseeable future due to significant costs
associated with our business startup, developing our business and costs
associated with on-going operations. Our business is to be a service only
product development firm to meet the needs of new and emerging product ideas
available for sale today and in the future. Our Certified Engineering
Technicians can participate in the creation of products, from hand sketches
and design through prototyping and construction. We offer project management
to assist our client to produce finished parts ready to market in numerous
industries including, but not limited to, consumer and household goods,
office products, furniture, and toys. We believe that we will be able to
deliver a complete solution to startup and development stage companies.
Our business plan does not include engaging in, and we currently have no
plans to engage in, a merger or acquisition with any other company, entity
or person.
MANAGEMENT'S STRATEGIC VISION
Our overall business strategy primarily rests on our ability to secure
additional capital through financing activities. Initial revenues will be
generated for design services and we will require minimal capital requirements.
As we secure funds, we plan to attract new clients and assist them in their
product development. The product a client requires will be for a niche in their
business and requires knowledge outside their business scope. Toy companies
may not have metal stamping knowledge, but require it for their new toy.
Electronics companies may not have extrusion rubber knowledge, but need it for
their new electronics. Depending on the complexity of the project and
process(s) required, that can take weeks to even years to complete one
product. We intend to advertise our services in free trade listings, free
industry publications and free web site listings as our main focus for
attracting new clients. We do not have a narrow focus on any one client
industry, but rather have a wide open approach to any field. Capital will
also be provided by clients and paid directly to suppliers on terms offered
by the supplier. In addition to increasing our product design offerings, we
intend to introduce distribution channels and increase our client list making
our services more widely available in additional markets. This strategic vision
will evolve as necessitated by the clients we are able to attract. Assuming we
attract a new client in the childrens toy industry, we will design based on
younger bolder images and colour with marketing geared to the younger
generation. If we attract an aftermarket automotive performance client, the
design will reflect current automotive trends and colours with speed and
aesthetics primary direction. A household product may be more discriminating
and subdued. Each object may require a different direction from the design,
however comparable processes exist for prototyping and presenting the object
to market. Dependant on the client attracted, we will have differing costs,
contacts and direction. The cost to design, prototype and prepare for
manufacturing could be thousands of dollars, while an international launch
for a major item could be millions. Our company will bill clients on a weekly
or monthly basis for the design work completed throughout the process.
Milestones for a project ranging from completed prototypes, to packaging
layout, to complete production and assembly of multiple items are possible.
The more detailed, the longer the process runs and the more billable services
we can provide.
22
Results of Operations for the three and six months ended June 30, 2010 and
the periods from inception (April 3, 2009) to June 30, 2009 and 2010.
REVENUES
For the three and six months ended June 30, 2010, and the period from inception
(April 3, 2009) through June 30, 2010, we generated $21,000 revenue and
earned $0 revenue for the period from inception (April 3, 2009) to
June 30, 2009.
We earned $21,000 of revenue from a contract for design consultation.
We are completely dependent upon the willingness of our management to fund
our initial operations by way of loans from our Chief Executive Officer.
COSTS OF GOODS SOLD
We did not incur cost of sales for the three and six months ended June 30, 2010
or the periods from inception (April 3, 2009) to June 30, 2009 and 2010.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expense of $110,000 for the three and six month
periods ended June 30, 2010 and $2,000 from inception (April 3, 2009) through
June 30, 2009 can be primarily be attributed to our need to pay for
incorporation costs and services. We incurred $110,000 of consulting expenses
for business and software development and design, graphics arts, accounting,
bookkeeping and technical services. These consultants were paid in full by
11,000,000 shares of our common stock for their services.
NET INCOME/LOSS
Our net income for the three and six month periods ended June 30, 2010 and 2009
was $161,250 and we incurred a net loss of $2,000 from inception
(April 3, 2009) through June 30, 2009. For the three and six month period ended
June 30, 2010, we had a net operating loss of $89,000. This is due to costs
associated with our incorporation and consulting services as described above.
In addition, for the six month period ended June 30, 2010, we experienced a
gain on settlement of accounts receivable of $336,000. This gain was due to
receiving 21,000,000 unregistered shares of common stock of Metro One
Development, Inc. ("Metro One") on May 3, 2010 to settle a $21,000 accounts
receivable balance due to us. On May 3, 2010, Metro One's closing price was
$0.02 per share. To determine the fair value of the Metro One shares received
we further adjusted the closing price by 15%, since the shares received are
unregistered.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY
Currently, the Company does not have cash or cash equivalents, 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 has retained
earnings (deficit) accumulated during development stage at June 30, 2010 and
December 31, 2009 of $159,250 and $(2,000), respectively. The retained earnings
reported at June 30, 2010 is largely a result of a non-operating gain on
settlement of accounts receivable of $336,000 during the six months ended
June 30, 2010. The Company believes that similar gains are unlikely to recur in
the future. These conditions led to our auditor reporting substantial doubt
about our ability to continue as a going concern.
Over the next 12 months we expect to expend approximately $25,000 in cash for
legal, accounting and related services. Cash used for other expenditures is
expected to be minimal. We hope to be able to compensate our independent
contractors with stock-based compensation, which will not require us to use
our cash, although there can be no assurances that we will be successful in
these efforts.
23
We expect to be able to secure capital through advances from our
Chief Executive Officer in order to pay expenses such as organizational costs,
filing fees, accounting fees,legal fees and advertising costs. We believe it
will be difficult to secure capital in the future because we have no assets to
secure debt and there is currently no trading market for our securities. We
will need additional capital in the next twelve months and if we cannot raise
such capital on acceptable terms, we may have to curtail our operations or
terminate our business entirely.
The inability to obtain financing or generate sufficient cash from operations
could require us to reduce or eliminate expenditures for developing products
and services, or otherwise curtail or discontinue our operations, which could
have a material adverse effect on our business, financial condition and
results of operations. Furthermore, to the extent that we raise additional
capital through the sale of equity or convertible debt securities, the
issuance of such securities may result in dilution to existing stockholders.
If we raise additional funds through the issuance of debt securities, these
securities may have rights, preferences and privileges senior to holders of
our common stock and the terms of such debt could impose restrictions on our
operations. Regardless of whether our cash assets prove to be inadequate to
meet our operational needs, we may seek to compensate providers of services
by issuing stock in lieu of cash, which may also result in dilution to
existing stockholders.
OPERATING CAPITAL AND CAPITAL EXPENDITURE REQUIREMENTS
We have funded our initial operations by way of issuing 20,000,000
shares of our common stock valued at $0.0001 per share to our Chief
Executive Officer. We have no cash to fund our initial operations, we hope
to be able to compensate our independent Contractors with approximately
$20,000 of stock-based compensation in order to further implement our business
plan, which will not require us to use cash committed by our Chief Executive
Officer, although there can be no assurances that we will be successful in
these efforts. Our Chief Executive Officer has committed to advancing us
an additional $25,000 for required operating costs in order to start
implementing our business plan, the funds are loaned to the Company as
required to pay amounts owed by the Company. As such, our operating capital
is currently limited to the personal resources of our Chief Executive Officer.
The loans from our Chief Executive Officer are unsecured and non-interest
bearing and have no set terms of repayment. We anticipate receiving
additional capital once we are able to have our securities quoted on a
public exchange. Even if we find a market maker which files an application
on our behalf, there is no guarantee that: (i) the application will be
accepted; (ii) our stock will become quoted; or (iii) a market for our
stock will develop.
OFF-BALANCE SHEET TRANSACTIONS
We currently have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future material effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
We have had no changes in or disagreements with our accountants. None of our
principal independent accountants have resigned or declined to stand for
re-election.
24
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act
and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure
reporting obligations and therefore are not required to provide the
information requested by this Item.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age, positions, and offices or
employments for the past five years as of September 21, 2010, of our executive
officers and directors. Members of the board are elected and serve for one
year terms or until their successors are elected and qualified. All of the
officers serve at the pleasure of our Board of Directors.
Name Age Position
------------------------------------------------------------------------------
Doug Clark 45 President, Chairman, Chief
Executive Officer and Director
Robert McLean 41 Chief Financial Officer
Grant Stummer 44 Director
------------------------------------------------------------------------------
BOARD OF DIRECTORS
Our board of directors consists of only one class. All of the directors will
serve until the next annual meeting of stockholders and until their successors
are elected and qualified, or until their earlier death, retirement,
resignation or removal.
The following is information on the business experience of our directors and
executive officers:
BIOGRAPHIES OF EXECUTIVE OFFICERS AND DIRECTORS
Doug Clark is our founder and has been our President, Chief Executive Officer
and Chairman of the Board since April 2009. Mr. Clark worked in engineering
for several mold makers before starting DC Design Inc., a successful design
and manufacturing firm for 14 years, requiring him to deal with the day to
day operations of that company. Mr. Clark devotes a minimum of 40% of his
working time to the affairs of our Company. Mr. Clark graduated top of his
class in Engineering Tool Design at George Brown College and is a current
member of OACETT. Mr. Clark has created numerous automotive, medical, office
and consumer projects from concept to production. Mr. Clark has also provided
the necessary funds to operate the Company and continues to do so.
Robert McLean has been our Chief Financial Officer since
April 2009. Mr. McLean devotes a minimum of 25% of his working time to the
affairs of our Company. Mr. McLean graduated with an honors degree from
University of Toronto in 1995. Robert has worked for a
brokerage firm where he had multiple roles as VP of Operations, compliance and
also managed his own book of business. He completed his PDO
(Partners, Directors and Senior Officers Qualifying exam) shortly thereafter.
These qualifications from the financial industry qualified Robert for the
position as CFO. Mr. MacLean moved from the financial business and for the
past eight years has owned Charbuster Inc., a national brand of outdoor living
products.
Grant Stummer, has been our director since April 2009. Mr. Stummer is CEO of
Six Points Plastics, a plastic injection tool and part manufacture since 1992
he has worked his way to co-owner of the Mississauga based company. This niche
ISO9001 certified plastics company produces complex components that are used
worldwide in many industries. In the last 15 years he has tripled his sales
and has implemented systems that have increased his profitability as a lean
manufacturer. Mr. Stummer's knowledge and contacts in the plastic industry
offer our company insight and direction from the industry.
25
EXECUTIVE COMPENSATION
Summary Compensation Table
--------------------------------------------
Name and Year Base Bonus Dollar Value
Principal Ended Salary of Total
Position December Compensation
31, 2009 for the
Covered
Fiscal
Year
$ $ $
(a) (b) (c) (d) (j)
--------------------------------------------
Doug Clark,
President,
Chairman,
Chief
Executive
Officer
and
Director 2009 -0- -0- -0-
--------------------------------------------
As of September 21, 2010, we have not paid any compensation to, or entered into
any written employment agreements with our Principal Executive Officer, or
any other employee. We have, however, verbally agreed with Mr. Clark that
employment compensation with base salary and bonuses will be negotiated and
determined once our operations begin.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
No equity awards were granted during the fiscal year ended December 31, 2009
to our named executive officer.
We do not have any qualified or non-qualified defined benefit plans or
nonqualified defined contribution plans or other deferred compensation plans.
There are no contracts, agreements, plans or arrangements that provide for
payment to our named executive officer following or in connection with the
resignation, retirement or termination of the named executive officer, a change
in control of our Company, or a change in the named executive officer's
responsibilities following a change in control.
DIRECTOR COMPENSATION
During the fiscal year ended December 31, 2009, we did not pay
compensation to any of our directors for serving on our board. At the present
time, there are no verbal or written contracts, agreements, plans or
arrangements to compensate our directors for their services on our board of
directors.
26
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 2009, Doug Clark and
Grant Stummer served as our directors. We do not have a separately standing
compensation committee and our board of directors did not perform similar
functions as there was no executive compensation paid from our inception on
April 3, 2009 through the end of our most recently completed fiscal year
ended December 31, 2009. Our board of directors performs the functions of a
compensation committee, however as of September 21, 2010, the board of
directors has not set any compensation.
During the fiscal year ended December 31, 2009, none of our executive officers:
* served as a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such committee,
the entire the board of directors) of another entity, one of whose
executive officers served as a member of our board of directors;
* served as a director of another entity, one of whose executive officers
served as a member of our board of directors; or
* served as a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such committee,
the entire the board of directors) of another entity, one of whose
executive officers served as a member of our board of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 21, 2010, as
to shares of our common stock beneficially owned by: (1) each person who is
known by us to own beneficially more than 5% of our common stock, (2) our named
executive officer listed in the summary compensation table, (3) each of our
directors and (4) all of our directors and executive officers as a group.
We have determined beneficial ownership in accordance with the rules of the
SEC. Except as indicated by the footnotes below, we believe, based on the
information furnished to us, that the persons and entities named in the table
below have sole voting and investment power with respect to all shares of
common stock that they beneficially own, subject to applicable community
property laws.
Name and Address of Common Shares Percent
of Beneficial Owner (1) Beneficially of Class (2)
Owned
------------------------ ---------------- ------------
Doug Clark 20,000,000 64.5 %
Robert McLean 0 -0-
Grant Stummer 0 -0-
Directors and executive officers
as a group (3 persons) 20,000,000 64.5 %
(1) The address of all individual directors and executive officers is c/o
Innovative Product Opportunities Inc., 730 Gana Court Mississauga, Ontario
Canada L5S 1P1.
(2) The number of shares of common stock issued and outstanding on
September 21, 2010 was 31,000,000 shares.
27
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
As of June 30, 2010 and December 31, 2009, we received advances from our
Chief Executive Officer, President, Chairman of the Board and founder, Doug
Clark, totaling $ 0 and $2,000,respectively, to pay for incorporation costs
and services. These advances were repaid with 20,000,000 shares of our common
stock on April 3, 2009.
Our policy with regard to transactions with related persons or entities is
that such transactions must be on terms no less favorable than could be
obtained from non-related persons. The above-described transactions were
conducted at arms length and on terms no less favorable than those that
could be obtained from non-related person.
The above related party transactions are not necessarily indicative of
the amounts that would have been incurred had a comparable transaction been
entered into with an independent party. The terms of these transactions were
more favorable than would have been attained if the transactions were
negotiated at arm's length.
DIRECTOR INDEPENDENCE
As of September 21, 2010, Doug Clark, and Grant Stummer serve as our directors.
Mr. Clark is not an independent director. Mr. Stummer is an "independent"
director, as defined under the standards of independence set forth in the
NASDAQ Marketplace Rules. We intend have a market maker file an application
to apply to have our common stock quoted on the Over-the-Counter Bulletin
Board, or OTCBB. The OTCBB does not require that a majority of our board
of directors be independent.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
The members of our Board of Directors are indemnified as provided by the
Delaware Statutes as well as our Certificate of Incorporation and By-laws.
Our Certificate of Incorporation and our By-laws provide that members of our
Board of Directors shall not be personally liable to us or our stockholders
for monetary damages for breach of fiduciary duty as a director except for
liability:
- for any breach of the director's duty of loyalty to the corporation or
its stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- under Section 174 of the General Corporation Law of the State of Delaware
(relating to distributions by insolvent corporations); or
- for any transaction from which the director derived an improper personal
benefit.
Our Certificate of Incorporation and By-laws also provide that we may
indemnify our directors and officers to the extent required by Delaware law
and shall indemnify such individuals to the extent permitted by Delaware law.
Under the Delaware General Corporation Law, the Company may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation), by reason of the fact that he or she is or was
our director, officer, employee or agent, or is or was serving at our request
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with such action, suit or proceeding
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to our best interests, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful. A right of indemnification shall continue as to a
person who has ceased to be a director or officer and will inure to the benefit
of the heirs and personal representatives of such a person. The
indemnification provided by our Certificate of Incorporation and By-laws will
not be deemed exclusive of any other rights that may be provided now or in the
future under any provision currently in effect or hereafter adopted by our
Certificate of Incorporation or By-laws, by any agreement, by vote of our
stockholders, by resolution of our directors, by provision of law or otherwise.
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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons in
accordance with the provisions contained in our Certificate of
Incorporation and By-laws, Delaware law or otherwise, we have been
advised that, in the opinion of the Securities and Exchange Commission,
this indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. If a claim for indemnification
against such liabilities (other than the payment by us of expenses
incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person, we will, unless in the opinion of
our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification
by us is against public policy as expressed in the Securities Act and we will
follow the court's determination.
Dealer Prospectus Delivery Obligation
Until [90 days from the date of effectiveness], all dealers that effect
transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to
the dealers' obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is
not permitted.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the issuance and distribution of the securities
registered under this prospectus are denoted below. Please note that all
amounts are estimates other than the Commission's registration fee.
Amount to Be paid
SEC Registration Fee $ 17
Printing and Edgarizing expenses $ 1,500
Legal fees and expenses $ 16,000
Accounting fees and expenses $ 5,000
Transfer agent $ 500
Stock certificates $ 300
Miscellaneous $ 800
Total $ 24,117
We will pay all expenses of the offering listed above from cash advanced
by our executive officers. No portion of these expenses will be borne by
the selling stockholders.
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RECENT SALES OF UNREGISTERED SECURITIES
On April 3, 2009, we issued 20,000,000 shares of our common stock to our
founder, Doug Clark, for incorporation costs and services totaling $2,000.
We issued 1,000,000 shares of common stock to
Nadav Elituv on May 14, 2010 in exchange for software development
services related to interactive displays valued at $10,000.
We issued 1,000,000 shares of common stock to
The Cellular Connection, Ltd. on May 14, 2010 in exchange for
business development services related to going public valued at $10,000.
Stuart Turk, as the principal owner of The Cellular Connection, Ltd., has
voting and dispositive control over these shares.
We issued 1,000,000 shares of common stock to
Bradley Southam on May 14, 2010 in exchange for graphic arts
development services related to interactive displays valued at $10,000.
We issued 1,000,000 shares of common stock to
Evan Schwartzberg on May 14, 2010 in exchange for accounting and
bookkeeping services valued at $10,000.
We issued 1,000,000 shares of common stock that we issued to
Brett W. Gold on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
We issued 1,000,000 shares of common stock to
Al Kau on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
We issued 1,000,000 shares of common stock to
Larry Burke on May 14, 2010 in exchange for design and technical services
related to potential customer usage valued at $10,000.
We issued 1,000,000 shares of common stock to
Aaron Shrira on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
We 1,000,000 shares of common stock to
Danielle Goose on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
We issued 1,000,000 shares of common stock to
William Reil on May 14, 2010 in exchange for introducing us to potential
customers valued at $10,000.
We issued 1,000,000 shares of common stock to
Metro One Development, Inc. in trust on May 14, 2010 in exchange for
technical knowledge on its interactive displays valued at $10,000.
The securities issued in the foregoing transactions were undertaken under
Rule 506 of Regulation D under the Securities Act of 1933, as amended, by
the fact that:
- the sale was made to a sophisticated or accredited investor, as
defined in Rule 502;
- we gave the purchaser the opportunity to ask questions and receive
answers concerning the terms and conditions of the offering and to
obtain any additional information which we possessed or could acquire
without unreasonable effort or expense that is necessary to verify the
accuracy of information furnished;
- at a reasonable time prior to the sale of securities, we advised the
purchaser of the limitations on resale in the manner contained in
Rule 502(d)2;
30
- neither we nor any person acting on our behalf sold the securities by
any form of general solicitation or general advertising; and
- we exercised reasonable care to assure that the purchaser of the
securities is not an underwriter within the meaning of Section 2(11)
of the Securities Act of 1933 in compliance with Rule 502(d).
Exhibit
Number Description
3.1 Certificate of Incorporation, dated April 3, 2009 (included as
Exhibit 3.1 to the Form S-1 filed June 22, 2010, and incorporated
herein by reference).
3.2 Bylaws, dated April 3, 2009 (included as Exhibit 3.2 to the Form S-1
filed June 22, 2010, and incorporated herein by reference).
4.1 Specimen Stock Certificate (included as Exhibit 4.1 to the Form S-1
filed June 22, 2010, and incorporated herein by reference).
5.1 Legal opinion of Gersten Savage LLP (filed herewith)
10.1 Innovative Product Opportunities Inc. Trust Agreement (included as
Exhibit 10.1 to the Form S-1 filed June 22, 2010, and incorporated
herein by reference).
23.1 Consent of De Joya Griffith & Company, LLC, independent registered
public accounting firm (filed herewith).
23.2 Consent of Gersten Savage LLP(incorporated in Exhibit 5.1).
____________
Financial Statement Schedules
Schedules have been omitted because the information required to be set forth
therein is not applicable or is shown in the financial statements or notes
thereto.
UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
(Section 230.424(b) of this chapter) if, in the aggregate, the
changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement.
31
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purposes of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) That, for the purposes of determining liability under the Securities Act
of 1933 to any purchaser:
(i)(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
(Section 230.424(b)(3) of this chapter) shall be deemed to be
part of the registration as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) (Section230.424(b)(2), (b)(5), or (b)(7) of
this chapter) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii), or (x) (Section230.415(a) (1)(i),
(vii), or (x) of this chapter) for the purpose of providing
the information required by section 10(a) of the Securities Act
of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness or the date of
the first contract of sale of securities in the offering
described in this prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that
date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the
securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that that is part
of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration
statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such
effective date.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
32
(5) If the Company is subject to Rule 430C: Each prospectus filed pursuant
to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness; provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that was
made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Mississauga, Province of
Ontario, Canada, on September 22, 2010.
Innovative Product Opportunities Inc.
By: /s/ Doug Clark
---------------------
Doug Clark
Principal Executive Officer,
President and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this registration
statement was signed by the following persons in the capacities and on the
dates stated.
Signature Title Date
/s/ Doug Clark 9/22/10
---------------------- ---------------
Doug Clark Principal Executive Officer,
President and Chairman of the Board
/s/ Robert McLean 9/22/10
---------------------- ---------------
Robert McLean Chief Financial Officer, Principal
Accounting Officer
/s/ Grant Stummer 9/22/10
---------------------- ---------------
Grant Stummer Director
33
