UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KA
(SECOND AMENDMENT)
X .. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2010
. TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 333-150061
INNOCENT, INC.
(Exact name of registrant as specified in its charter)
Nevada |
| 98-0585268 |
(State of incorporation) |
| (I.R.S. Employer ID No.) |
3280 Suntree Blvd, Suite 105, Melbourne, Fl. 32940
(Address of principal executive officers, including Zip Code)
(828) 702-7687
(Issuer's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes . No .
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes . No X .
Indicate by checkmark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KA or any amendment to this Form 10-KA. X .
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | . | Accelerated filer | . |
Non-accelerated filer | . (Do not check if a smaller reporting company) | Smaller reporting company | X . |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes . No X .
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter:
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:
As of August 31, 2011, there were 20,000,000 shares of common stock issued, par value $0.001, outstanding.
The aggregate market value of the voting and non-voting equity held by non-affiliates is 7,000,000 shares at .12 a share as of August 31, 2011 for a total market value of $2,400,000, and a total of 20,000,000 issued and outstanding .
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Transitional Small Business Disclosure Format: Yes . No X .
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EXPLANATORY NOTE – The Registrant is amending this Form 10-K to revise certain disclosure in certain ITEMS indicated below. This Second Amended 10-K includes all parts and the parts which have been revised from the Registrant’s Form 10-K filed with the SEC on May 26, 2011 are highlighted below. There were no changes made to the Financial Statements with the exception of the Statement of Cash Flow. We did not introduce new information in the Notes to the Financial Statements, but minor changes were made for the purpose of clarification. Except as set forth herein, there are no other changes to the disclosures in the Form 10-K for the fiscal year ended August 31, 2010 previously filed with the SEC
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TABLE OF CONTENTS
| Page of |
| Report |
PART I |
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ITEM 1. BUSINESS | 6 |
PART II |
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 15 |
ITEM 8. FINANCIAL STATEMENTS (CASH FLOW) | F-7 |
ITEM 9A CONTROLS AND PROCEDURES | 18 |
PART III |
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ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS | 19 |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 22 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION AND DIRECTOR INDEPENDENCE | 22 |
PART IV |
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 23 |
SIGNATURES | 24 |
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TABLE OF CONTENTS
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| Page No. |
| Part I |
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Item 1. | Business | 6 |
Item 1A. | Risk Factors | 10 |
Item 2. | Properties | 12 |
Item 3. | Legal Proceedings | 12 |
Item 4. | Submission of Matters to a Vote of Securities Holders | 12 |
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| Part II |
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Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 13 |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operation | 15 |
Item 8. | Financial Statements | F-1 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 18 |
Item 9a | Controls and Procedures | 18 |
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| Part III |
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Item 10. | Directors and Executive Officers | 19 |
Item 11. | Executive Compensation | 21 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 22 |
Item 13. | Certain Relationships and Related Transactions and Director Independence | 22 |
Item 14. | Principal Accounting Fees and Services | 23 |
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| Part IV |
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Item 15. | Exhibits | 23 |
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| Signatures | 24 |
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PART I
FORWARD LOOKING STATEMENTS
This annual report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:
- the uncertainty of profitability based upon our history of losses;
- risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern;
- risks related to our international operations;
- risks related to product liability claims;
- other risks and uncertainties related to our business plan and business strategy.
This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.
Forward looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States\Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our", the "Company" and "Innocent" mean Innocent, Inc., unless otherwise indicated.
ITEM 1. BUSINESS
GENERAL INFORMATION ABOUT OUR COMPANY
Innocent, Inc. ("Company") was organized September 27, 2006 under the laws of the State of Nevada for the purpose of selling new food products produced or developed by North American companies to foreign markets. On August 31, 2009, the Company discontinued its involvement in the sales of tea due to a strategic change in business focus by the acquisition of mineral rights as disclosed in the Company's 8-K filed with the SEC on September 2, 2009. The Company currently has limited operations or realized revenues from its planned principle business purpose and, in accordance with Statement of Financial Accounting Standard (SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," is considered a Development Stage Enterprise.
On September 1, 2009 the company acquired mining operations in an active working gold mine. The Board of Directors approved the Purchase Agreement from Global Finishing, Inc. (Frankfurt:G8BA) a Nevada Corporation, to purchase its interest in the Maria Olivia Concessions and Miranda PLSA, located in Ecuador, within the prospective gold and silver bearing vein systems. Global Finishing Inc. acquired the concessions from Companis Minera Monte-Verde S.A. Comimontsa in a 100% share exchange for 6,000,000 Global Finishing Inc., Regulation S common shares which represented 22.8% of its shares.
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On April 7, 2010 the Company decided to direct that the initial funding of $880,000 US held in escrow by Dr. Vicente Sanchez Jaramillo a third party of the initial agreement in Ecuador be returned. The company has received such notification that said funds are being returned to the original accounts as received. Global Finishing, Inc has confirmed in writing that said funds are the property of Innocent Inc. and will be forwarded upon receipt. The company has adjusted the general ledger to reflect said funds as a subscription receivable until received. Innocent Inc. and Global Finishing Inc agree that the existing agreement on Miranda and as a result of the new mining laws that went into effect on January 1, 2010, it is in the best interest of all parties to renegotiate the contract, whereby Innocent Inc. will be the direct designated benefactor of the Miranda Mineral Rights and that upon the transfer of the deposit funds, Innocent Inc. will be the registered holder of a percent to be determined, and said documents filed with the mining commission of Ecuador
On May 30, 2010 Innocent Inc. entered into an agreement with Global Finish Inc, a Nevada Corporation, to acquire 51% of the issued and outstanding shares of Global Finishing Inc in a share exchange whereby Innocent Inc. will issue .9 shares of Innocent Inc. rule 144 restricted common stock for one share of Global Finishing Inc. The agreement has been approved by an excess of 51% of the shareholders of both Global Finishing Inc and Innocent Inc. by majority shareholder consent in lieu of a meeting. The agreement was signed on May 30, 2010 by the Companies with the approval of the Board of Directors. The agreement provides for 10 working days to administer the share exchange which will result in Global Finishing Inc to exchange 13,975,208 shares of Global Finishing Inc 27, 402,369 shares issued and outstanding for 12,557,687 shares of Innocent Inc., representing approximately 25.4% ownership of Innocent committed and issued and outstanding shares of common stock. The agreement further provided for the share exchange of the remaining 49% under the same exchange provisions, and that no additional shares of Global Finish Inc will be issued until such time as the parties execute the 49% exchange or decide that not additional share exchange will take place. The acquisition of the controlling interest in Global Finishing Inc, will allow Innocent Inc. to proceed with its Ecuador mineral interest, although given the time since the initial agreement, the agreement for the Miranda interest must be renegotiated. Global Finishing Inc currently owns the majority interest in an approved Ecuador subsidiary, Globalfinishing Ecuador S A that can legally operate and own mining interest and register new mineral rights and agreements. Innocent will retain the ownership rights in Companis Minera Monte-Verde S.A. Comimontsa and the 10,000,000 shares issued in the September 1, 2009 agreement will be offset against the 12,557,687 shares of common stock due to be issued to Global Finish Inc, for the 51% interest, leaving a balance of 2,557,687 additional shares to be issued in the share exchange described above.
On August 27, 2010 Globalfinishing Ecuador acquired the Murciealagos Vizcaya and Lilly Rai mining concessions, located in Ecuador's El Oro Province. Innocent Inc. funded the initial purchase with the assumption of majority ownership of Globalfinishing Ecuador via its acquisition agreement for 51% of Global Finishing Inc. the parent of Globalfinihing Ecuador. Due to the cancellation of the share exchange agreement on October 20, 2010 the parties must negotiate the ownership of initial purchase and subsequent funds due. Innocent Inc. has recorded the funds advanced to Global Finishing Inc as a note receivable until such time as the matter is resolved. Under the terms of the purchase agreement for the mining properties, Globalfinishing Ecuador owes a total sum of $1,200,000 for the properties, with the initial down payment of $250,000 funded by Innocent Inc. Five additional payments totaling $950,000 are due every sixth month thereafter.
On October 20, 2010 Innocent Inc. has terminated the agreement with Global Finish Inc, a Nevada Corporation, to acquire 51% of the issued and outstanding shares of Global Finishing Inc in a share exchange whereby Innocent Inc. would have issued .9 shares of Innocent Inc. rule 144 restricted common stock for one share of Global Finishing Inc. The agreement was approved by an excess of 51% of the shareholders of both Global Finishing Inc and Innocent Inc. by majority shareholder consent in lieu of a meeting. The agreement was signed on May 30, 2010 by the Companies with the approval of the Board of Directors. The agreement provided for 10 working days to administer the share exchange and this provision was extended until Innocent Inc. issued a demand to conclude the transaction and as of this date decided to cancel the agreement. Innocent Inc. and Global Finishing Inc were unable to reach an acceptable timely conclusion to the share exchange under the terms of the original agreement. Therefore, the Board of Directors of Innocent Inc. cancelled the share exchange agreement effective October 20, 2010. The parties to the original agreement will meet to resolve the funding and purchase of the Murciealagos Vizcaya and Lilly Rai mining concessions in the Zaruma-Portovelo Mining District of Ecuador's El Oro Province. As a result of this decision Innocent Inc. will cancel the original 10,000,000 shares issued under the $880,000.00 subscription agreement due that was subsequently held for the share exchange that the Board of Directors of Innocent Inc. cancelled. The 10,000,000 shares will be returned to treasury and monies advanced for the Murciealagos Vizcaya and Lilly Rai mining concessions will be recorded as a note payable due Innocent Inc. from Global Finishing Inc until such time as the parties can agree on the terms and conditions of joint ownership.
On October 20, 2010 Innocent Inc. received notification from Ecuador concerning the approval to own an Ecuador Registered Company, “JUST RESOURCES MINAS S.A.” file reference number 732697. This company is 100% owned by Innocent Inc. and will provide the company a structure to acquire and operate mineral interest in Ecuador in accordance with the new mining laws that went into effect in January 2010. Innocent Inc. is in negotiations with a local executive to manage this newly created operating company.
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On November 23, 2010 Innocent Inc. acquired from Sedunda Oportunidad, LLC, the 100% working interest in an Oil and Gas Leasehold Estate including the effective net revenues flowing therefrom. The effective net revenue yield is 82% after the landowner Royalty is paid. The property, Thomas Lease, one well located center of south quarter section 7, Township 24 North Range West, Garfield County, Oklahoma, Book 1955 page 534 on 8/13/09. The parties agreed on a purchase price of $150,000 whereby Innocent Inc. will issue a non interest bearing note payable for the purchase price. The note will be a one year demand note payable. The surrounding property of approximately 300 acres contains approximately 45 wells in various states of operation and non-operation that can be acquired. It is anticipated that an additional $150,000 working capital will be required to return the property to the status of a working well, with most of the expense associated to the pipeline of the gas to the refinery, that is already in process. The well was operational and has historical data but management has decided not to release any estimates until the well is back in operational mode. The acquisition of the Thomas Lease from Oportunidad, LLC, included the 100% rights to the property that currently has one gas well that in the past produced both oil and gas. The leasehold assignment also includes a royalty to the land owner and the contract service that maintains and services the well, which totals 18% of the Gross Revenue, leaving a net yield of 84% of the Gross Revenue to Innocent Inc. The well is in the process of refurbishing and at this time we are not ready to make projections of income.
We are in settlement discussions with Global Finishing, Inc. as it relates to the funding provided to Global Finishing Inc., for the operations of Global Finishing Ecuador SA. Although Innocent Inc. cancelled the operational agreements with Global Finishing Inc. and has reserved approx. $88,000.00 of the Note Payable and other payables due Innocent Inc., we have not relinquished any claim we may have relating to the full value of the Note Payable, Miranda PLSA or the Murciealagoes Vizcaya and Lilly Rai mining concessions. Upon the receipt of $389,000.00, the full settlement of the note payable and other expenses, Innocent Inc. has advised Global Finishing Inc. that the Company would release any such claim to the above properties. The Maria Olivia concession, which we understand is still in the Ecuador Government control of mining properties, will become a right of Innocent Inc. to acquire said property in the settlement. Innocent Inc. has local Ecuador advisors and Global Finishing Ecuador SA is assisting with the process to release the Maria Olivia from the Government control. We had been advised by Global Finishing Inc. that they expect to complete a funding within the next 60 days, whereby we would release any and all claims as they relate to the funding, agreements, and any other written or understood agreements between Innocent Inc. and Global Finishing Inc. and Global Finishing Ecuador SA upon satisfaction of the total note payable of $389,000.00. As of August 31, 2011 the parties are in discussion to assign 50% of Global Finishing Inc. interest in the properties to Innocent Inc. to serve as collateral until Global Finishing Inc. secures funding for the repayment.
As our business plan of operation exist today, we plan in Ecuador to acquire existing mineral rights that are being mined or have been mined and are properly registered under the Ecuador Mining Laws and Regulations. We will become an exploration company for the primary mineral of Gold but some silver and copper exist in the areas we are focused on. The new mining laws and registration of the mineral properties have given the government the opportunity to refocus on true ownership, back tax obligation and environment issues and concerns. We expect to operate within these guidelines and believe that the cost associated with mining within the governmental guidelines will not have an adverse cost impact. The steady increase in the value of gold should provide sufficient revenue to cover a responsible mode of operation. Although as of today we do not currently have an operating property in Ecuador we have visited the sites we have disclosed and they appear to operate within a safe and responsible manner. In regard to the Thomas Lease, we plan to extract primarily gas, but historically reports indicate some oil present. We plan to utilize a well-known third party operator to manage the site and insure we are in compliance with state and federal guidelines. The company is in the process of refurbishing the existing well and piping to a gas feed supply line. We have supplied the initial start-up capital and expect to provide a more definitive date the well will be operational.
Innocent Inc. Board of Directors approved a letter of intent ("LOI") which constitutes an expression of the intent of Steele Resources, Inc. ("SRI") to enter into a Joint Venture Agreement with Innocent Inc. ("INI") which will govern the exploration and operations of mineral rights within the A&P Patented Claims and the Pony exploration projects jointly referred to as the Mineral Hill Project ("Mineral Hill Project").
The agreement (non-binding LOI) has been funded with the initial payment, completing the initial obligation of Innocent, Inc. as provided in the LOI attached as an exhibit. Innocent, Inc. expects that the second deposit will be funded no later than the end of February 2011, in accordance with the Letter of Intent executed on January 27, 2011. The parties have verbally agreed to extend the funding dates from the original agreement to allow time for the Funder to forward the funds to Innocent, Inc. if necessary. Although the Funder of the initial payment has committed the balance of the funds and we expect that obligation to be met, no guarantee can be issued until such time as the funds are received by the funding source
Innocent Inc. has entered into a material definitive agreement with Steele Resources, Inc. (SELR: OTCBB) to acquire 50% of the Mineral Hill Gold Exploration Project. The project is located near Pony Hill, Montana in the Mineral Hill Mining District and consists of 17 patented and 67 unpatented lode mining claims (approximately 1,800 acres). The agreement is a 50/50 Joint Venture under which the two companies will work together to explore and operate the claims. The initial participating interests of Innocent, Inc. and Steele Resources, Inc. in the JV will be 50% and 50%. Under the terms of the agreement, Innocent may contribute up to $5,000,000 in operating funds over one year.
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In the event those funds are not provided, Innocent will forfeit 10% per $1,000,000 not provided. Steele Resources, Inc. will act as the operating partner and have a commitment to match up to $5,000,000 in funding within one year of Innocent, Inc. contributing its first $1,000,000. Steel Resources, Inc. will forfeit 10% per $1,000,000 not provided under its obligation. Innocent Inc. has made the initial payment of three hundred thousand dollars ($300,000) under the terms of the LOI dated January 27, 2011. The second payment is expected be completed on or before February 28th, 2011, based upon a third party commitment, although the funds for the second deposit have not been received by Innocent Inc. as of the issuance of this release
On February 20, 2011 Innocent Inc. entered into a material definitive agreement with Steele Resources, Inc. (SELR: OTCBB) to acquire 50% of the Mineral Hill Gold Exploration Project. The project is located near Pony Hill, Montana in the Mineral Hill Mining District and consists of 17 patented and 67 unpatented lode mining claims (approximately 1,800 acres). The agreement is a 50/50 Joint Venture under which the two companies will work together to explore and operate the claims. The initial participating interests of Innocent, Inc. and Steele Resources, Inc. in the JV will be 50% and 50%. Under the terms of the agreement, Innocent may contribute up to $5,000,000 in operating funds over one year. In the event those funds are not provided, Innocent will forfeit 10% per $1,000,000 not provided. Steele Resources, Inc. will act as the operating partner and have a commitment to match up to $5,000,000 in funding within one year of Innocent, Inc. contributing its first $1,000,000. Steel Resources, Inc. will forfeit 10% per $1,000,000 not provided under its obligation. Innocent Inc. made the initial payment of three hundred thousand dollars ($300,000) under the terms of the LOI dated January 27, 2011.
On February 7, 2011, INCT advanced an initial $300,000 which allowed SRI to close on the Pony Project representing 17 patented and 67 unpatented mining claims located in the Pony Mining District of Montana.
The second payment expected be completed on or before February 28th, 2011, was completed on March 18, 2011 in the amount of $250,000.00. These funds were sent directly to Steele Resources, Inc. and Innocent Inc. has received the supporting documentation and issued a Note Payable for these funds on behalf of Innocent Inc.
On March 23, 2011, $200,000 will be used to allow SRI to close on the Atlantic and Pacific mining property mineral lease (the”A&P Project”) representing two patented mining claims located next to the Pony Project and together representing the Mineral Hill Mining Project.
On April 14, 2011, the Company received a notification from its joint venture partner (SRI), that Innocent Inc. was in default on the balance of its funding commitment of the $1,000,000. The Company did not agree with the exact interpretation of the default and Innocent Inc. is seeking the additional capital to fulfill its committed obligation. After further discussion the JV Partners have decided that in consideration of Innocent’s willingness to negotiate, in good faith, a payment plan for the $460,000 currently due from the commitment under the Joint Venture Agreement. Steele Resources is willing to withdraw the default condition established in its letter of notification conditional upon Innocent Inc. entering into a negotiation process with Steele by May 2, 2011. Steele Resources stated that it would not seek any default remediation so long as Innocent negotiates a “good faith” funding solution. The JV Agreement provides ; Under the terms of the JV Agreement INCT and SRC would each own 50% of the Joint Venture however the percentage ownership would be reduced by 10% for each $1,000,000 a party failed to contribute to the Joint Venture . On May 2, 2011 Steele Resources acknowledges that Innocent is providing "good faith" efforts to completing its funding obligations to the Joint Venture Agreement. Innocent acknowledges that a balance of $460,000 remains of the initial $1,000,000 funding obligation. Given Innocent's present funding efforts the parties to the agreement have decided that no default exist and efforts to complete the funding obligation will be supported by both parties.
On August 30, 2011 Innocent Inc. notified Steele Resources the company no longer felt that the capital committed and necessary for the JV Agreement could be secured by Innocent in a timely manner and Innocent Inc. felt it was in the best interest of the shareholders of both companies to terminate the agreement. The parties to the original agreement terminated the agreement on Aug 31, 2011 in accordance with the terms and conditions below:
TERMS AND CONDITIONS OF THE TERMINATION:
The parties to the original material definitive agreement dated February 20, 2011, filed with the SEC in an 8K filing; hereby mutually agree to terminate said agreement under the terms and conditions stated below.
Item 1: The five hundred forty thousand dollars ($540,000), funded to-date by Innocent Inc. to Steele Resources Inc. will be repaid to Innocent Inc. and immediately transferred to the parties that funded said funds;
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Item 2: The collateral for the five hundred forty thousand dollars ($540,000) funded to date will encompass the existing stockpiled ore on site, although the exact net profit is unknown, the parties believed it is sufficient to repay the note holders. This ore referenced on the Steele web site is and will serve as the primary repayment funds to the Innocent Inc. note holders, and the initial net revenue proceeds will be applied to satisfy the referenced note;
Item 3: Steele Resources Inc. will grant to Innocent Inc. an eight percent (8%) of the net revenue proceeds of the stockpile of ore on site;
Item 4: Steele Resources Inc. has the right to repay the funds to satisfy the five hundred forty thousand dollars ($540,000), at its discretion prior to the processing of the stockpile ore currently on site;
Item 5: Steele Resources Inc. has the right to negotiate a separate agreement with the note holders, providing any such agreement transfers the responsibility and obligation of the Innocent Inc. $540,000 note payable to Steele Resources Inc. and upon written acceptance by the current Innocent Inc. note holders.
Item 6: The five hundred forty thousand dollars ($540,000) will continue to be reflected in the financial statements of Steele Resources Inc. as a current note payable due Innocent Inc. and Innocent Inc. will reflect as current term note payable to related parties
Item 7: Upon the completion of the Steele Resource Inc. grant of 8% of the net income value of the stockpiled ore currently on site, Innocent Inc. will have no further rights to any future extracted/or un-extracted minerals contained on the site;
Item 8: Innocent Inc. will forfeit any ownership rights of the property (with the exception of the 8 % of the stockpile ore on site) and in turn Innocent Inc. will not be responsible for any future funding for the development or any current expenses associated with the property. Steele Resources Inc. will become the 100% owner of the site.
On September 6, 2011 Global Finishing Inc. and Innocent Inc. entered into an agreement whereby Global assigned 50% interest of the MURCIELAGOS VIZCAYA and LILLY RAI, Ecuador properties as collateral for the $390,000 outstanding note due Innocent Inc. The parties to the agreement expect the repayment within a 90 day period. The specific terms of the agreement have been filed in an 8K filing on September 7, 2011.
Compliance with Environmental Laws
We are not aware of any environmental laws violations or issues related to the company property in Ecuador.
Employees
We have no full-time employees at the present time.
Reports to Securities Holders
We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10K annually and Form 10Q quarterly. In addition, we will file Form 8K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
ITEM 1A. RISK FACTORS
WE FACE RISKS ASSOCIATED WITH OPERATE IN A FOREIGN COUNTRY
We are subject to the risks generally associated with doing business abroad. These risks include foreign laws and regulations, foreign consumer preferences, political unrest, disruptions or delays in shipments and changes in economic conditions in countries to which we sell products.
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WE MAY BE ADVERSELY AFFECTED BY VALUE OF OUR PRODUCT GIVEN IT IS SET BY WORLD DEMAND AND BEYOND OUR CONTROL
We face risks of losses in inventory value given the nature of the valuation of precious metals. The value of such metals is determined by the demand for them on a global scale and is beyond our control. While we do not anticipate there to be a significant decrease in the value of precious metals, we cannot guarantee any such change in value.
THERE IS SUBSTANTIAL UNCERTAINTY AS TO WHETHER WE WILL CONTINUE OPERATIONS. If we discontinue operations, you could lose your investment. Our auditors have discussed their uncertainty regarding our business operations in their audit report dated November 13, 2010. This means that there is substantial doubt that we can continue as an ongoing business for the next 12 months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such, we may have to cease operations and you could lose your entire investment.
WE LACK AN OPERATING HISTORY
There is no assurance that our future operations will result in continued profitable revenues. If we cannot generate sufficient revenues to operate profitably, our business will fail. We have very little operating history upon which an evaluation of our future success. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
BECAUSE OUR MANAGEMENT DOES NOT HAVE PRIOR EXPERIENCE IN MINING, OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Our current directors do not have experience in the mining industry. As a result, we may not be able to recognize and take advantage of opportunities without the aid of qualified marketing and business development consultants. Our directors' decisions and choices may not be well thought out and our operations, earnings and ultimate financial success may suffer irreparable harm as a result.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS AND THE FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker- dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.
In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the National Association of Securities Dealers believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The National Association of Securities Dealers' requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
11
ITEM 2. PROPERTIES
The company is currently relocating to 3280 Suntree Blvd, Suite 105, Melborne, Fl. 32940, where it will rent office space on a month to month basis for $500.00 per month.
On August 27, 2010 Globalfinishing Ecuador acquired the Murciealagos Vizcaya and Lilly Rai mining concessions, located in Ecuador's El Oro Province. Innocent Inc. funded the initial purchase with the assumption of majority ownership of Globalfinishing Ecuador via its acquisition agreement for 51% of Global Finishing Inc. the parent of Globalfinihing Ecuador. Due the cancellation of the share exchange agreement on October 20, 2010 the parties must negotiate the ownership of the initial purchase and subsequent funds due. Innocent Inc. has recorded the funds advanced to Global Finishing Inc as a note receivable until such time as the matter is resolved. Under the terms of the purchase agreement for the mining properties, Globalfinishing Ecuador owes a total sum of $1,200,000 for the properties, with the initial down payment of $250,000 funded by Innocent Inc. Five additional payments totaling $950,000 are due every sixth month thereafter.
On November 23, 2010 Innocent Inc. acquired from Sedunda Oportunidad, LLC, the 100% working interest in an Oil and Gas Leasehold Estate including the effective net revenues flowing therefrom. The effective net revenue yield is 82% after the landowner Royalty is paid. The property, Thomas Lease, one well located center of south quarter section 7, Township 24 North Range West, Garfield County, Oklahoma, Book 1955 page 534 on 8/13/09. It is anticipated that an additional $150,000 working capital will be required to return the property to the status of a working well, with most of the expense associated to the pipeline of the gas to the refinery, that is already in process.
On February 20, 2011 Innocent Inc. entered into a material definitive agreement with Steele Resources, Inc. (SELR: OTCBB) to acquire 50% of the Mineral Hill Gold Exploration Project. The project is located near Pony Hill, Montana in the Mineral Hill Mining District and consists of 17 patented and 67 unpatented lode mining claims (approximately 1,800 acres). The agreement is a 50/50 Joint Venture under which the two companies will work together to explore and operate the claims. The initial participating interests of Innocent, Inc. and Steele Resources, Inc. in the JV will be 50% and 50%. Under the terms of the agreement, Innocent may contribute up to $5,000,000 in operating funds over one year. In the event those funds are not provided, Innocent will forfeit 10% per $1,000,000 not provided. Steele Resources, Inc. will act as the operating partner and have a commitment to match up to $5,000,000 in funding within one year of Innocent, Inc. contributing its first $1,000,000. Steel Resources, Inc. will forfeit 10% per $1,000,000 not provided under its obligation. Innocent Inc. made the initial payment of three hundred thousand dollars ($300,000) under the terms of the LOI dated January 27, 2011. On August 30, 2011 Innocent Inc. notified Steele Resources that the company no longer felt that the capital committed and necessary for the project could be secured by Innocent in a timely manner and Innocent Inc. felt it was in the best interest of the shareholders of both companies to terminate the agreement. The parties to the original agreement terminated the agreement on Aug 31, 2011.
ITEM 3. LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fiscal year ended August 31, 2010.
12
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(a) Market Information
The common shares of Innocent Inc. are quoted on the OTC.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person's account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
On December 31, 2010, the shareholders' list of our common shares showed 10 registered shareholders holding approximately 13,000,000 shares and various broker-dealers holding approximately 7,000,000 shares in an indeterminate number of names.
We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.
| High | Low |
Fiscal 2010 |
|
|
|
|
|
First Quarter | $1.50 | $1.20 |
Second Quarter | $1.20 | $0.51 |
Third Quarter | $0.94 | $0.52 |
Fourth Quarter | $1.04 | $0.75 |
|
|
|
Fiscal 2009 |
|
|
|
|
|
First Quarter | $0.00 | $0.00 |
Second Quarter | $0.00 | $0.00 |
Third Quarter | $0.00 | $0.00 |
Fourth Quarter | $0.00 | $0.00 |
Our shares of common stock commenced quotation on the OTC Bulletin Board under the symbol INCT on June 3, 2008.
(b) Holders of Common Stock
We have approximately 30 shareholders of record, and 20,000,000 shares issued and outstanding with an approximate float of 7,000,000 shares as of August 31, 2011. Because of our small shareholder base, our stock may not experience high volume trading in the near future. We anticipate more shareholders in the future, but cannot guarantee any such happening.
13
(c) Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business; or
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in place.
Recent Sales of Unregistered Securities
On September 19, 2009 convertible notes in the amount of $10,000.00 were converted to 10,000,000 shares of rule- 144 restricted common stock. The value of the shares was determined by the Board of Directors at the time the Company secured ten thousand dollars ($10,000.00) in funding from outside parties to fund the company, that funding was completed at .001 per share. The company issued 3,000,000 shares as approved by the Board of Directors to the President and CEO Wayne A Doss, for services valued at $3,000.00 at the same per share basis as the convertible Notes.
We completed an offering of 4,000,000 shares of our common stock at a price of $0.001 per share to our directors Vera Barinova (3,000,000) and Aleksandr Kryukov (1,000,000), on October 23, 2007. The total amount received from this offering was $4,000. We completed this offering pursuant to Regulation S of the Securities Act. Since the resignation of these Directors and Officers that was announced August 12, 2009, it has been over 90 days, so these shares may be privately sold by the parties or deposited in trading accounts and redeemed as free trading.
We completed an offering of 3,000,000 shares of common stock at a price of $0.010 per share to a total of 30 purchasers on October 27, 2007. The total amount received from this offering was $30,000. We completed this offering pursuant to Regulation S of the Securities Act. These shares have been privately sold by the selling shareholders and as of this report 3,000,000 have been deposited in accounts for active trading. The original founder shares, Vera Barinova (3,000,000) and Aleksandr Kryukov (1,000,000), have been transferred in a private stock sale and can be deposited at any time, which will result in an increase of the current float from 3,000,000 to 7,000,000 at the time they are deposited.
The offer and sale of all Shares of our common stock listed to the previous officers and directors and the selling shareholders identified in the S-1 were affected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Regulation S promulgated under the Securities Act. The Investor acknowledged the following: Subscriber is not a United States Person, nor is the Subscriber acquiring the Shares directly or indirectly for the account or benefit of a United States Person. None of the funds used by the Subscriber to purchase the Units have been obtained from United States Persons. For purposes of this Agreement, "United States Person" within the meaning of U.S. tax laws, means a citizen or resident of the United States, any former U.S. citizen subject to Section 877 of the Internal Revenue Code, any corporation, or partnership organized or existing under the laws of the United States of America or any state, jurisdiction, territory or possession thereof and any estate or trust the income of which is subject to U.S. federal income tax irrespective of its source, and within the meaning of U.S. securities laws, as defined in Rule 902(o) of Regulation S, means:
(i) any natural person resident in the United States; (ii) any partnership or corporation organized or incorporated under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. person; (iv) any trust of which any trustee is a U.S. person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (viii) any partnership or corporation if organized under the laws of any foreign jurisdiction, and formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a)) who are not natural persons, estates or trusts.
14
There have been no issuances of preferred stock.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended August 31, 2010 or 2009.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our Current Business
RESULTS OF OPERATIONS
The following is a discussion and analysis of our results of operation for the years ended August 31, 2010 and 2009, and the period of September 27, 2006 (Inception) to August 31, 2010 and the factors that could affect our future financial condition. This discussion and analysis should be read in conjunction with our audited financial statements and the notes thereto included elsewhere in this annual report. Our financial statements are prepared in accordance with United States generally accepted accounting principles. All references to dollar amounts in this section are in United States dollars unless expressly stated otherwise.
|
| 2010 |
|
| 2009 |
|
| September 27, 2006 (Inception) to August 31, 2010 |
| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Operating Expenses |
|
| (135,439 | ) |
|
| (28,588 | ) |
|
| (288,160 | ) |
Other Expenses |
|
| (4,143 | ) |
|
| (843 | ) |
|
| (5,087 | ) |
Income from Discontinued Operations |
|
|
|
|
|
| 1,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | (139,582 | ) |
| $ | (27,887 | ) |
| $ | (230,395 | ) |
Revenue
Our gross revenue for the years ended August 31, 2010 and 2009 was $0 and $0 since is in the process of acquiring mining operations, but currently do not own or have interest in an operating property.
Operating Costs and Expenses
The major components of our expenses for the years ended August 31, 2010 and 2009, and for the period from September 27, 2006 (Inception) through August 31, 2010, are outlined in the table below:
2010 2009 Inception
Operating expenses |
|
|
|
|
| |
| Professional fees | 19,156 |
| 23,869 |
| 76,025 |
| Travel and promotion | 20,830 |
| 263 |
| 28,795 |
| Bad debt | 88,344 |
| - |
| 88,344 |
| Other general & administrative | 7,109 |
| 4,456 |
| 34,996 |
Total operating expenses | 135,439 |
| 28,588 |
| 288,160 | |
Operating Expenses
The increase in our operating costs for the year ended August 31, 2010, compared to the year ended August 31, 2009, was due to the increase in general and administrative costs and travel expenses. All these increases are associated with the change in activities and related to implementation of our business plan to acquire mining properties in Ecuador. At year end the company established a bad debt reserve of $ 88,344 although the company plans to collect the entire note payable balance.
15
Working Capital
|
|
|
|
|
|
|
|
Current Assets | $ | 252,907 |
|
| $ | 0 |
|
Current Liabilities |
| 436,302 |
|
|
| 56,813 |
|
|
|
|
|
|
|
|
|
Working Capital Deficiency | $ | (183,395 | ) |
| $ | (56,813 | ) |
Cash Flow
|
| 2010 |
|
| 2009 |
|
| September 27, 2006 (Inception) to August 31, 2010 |
| |||
Cash used in Operating Activities |
| $ | (142,906 | ) |
| $ | (5,776 | ) |
| $ | (189,939 | ) |
Cash Used in Investing Activities |
|
| (250,000 | ) |
|
| - |
|
|
| (250,000 | ) |
Cash Provided by Financing Activities |
|
| 395,003 |
|
|
| 5,742 |
|
|
| 442,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash |
| $ | 2,907 |
|
| $ | 34 |
|
| $ | (230,395 |
|
We had cash of $2,907, accounts receivable of $0, notes receivable of $338,344 and net of reserves of 250,000, accounts payable and accrued liabilities of $37,456 and loan payable of $398,846 as of August 31, 2010. Further, we had cash of $0, accounts receivable of $0, accounts payable and accrued liabilities of $42,970 and a loan payable of $13,843 as of August 31, 2009.
Cash Used In Operating Activities
We used cash in operating activities in the amount of $142,096 and $5,776 during the years ended August 31, 2010 and 2009 and $189,939 during the period of inception to August 31, 2010. Cash used in operating activities was funded by cash from financing activities.
Cash From Investing Activities
As of August 31, 2010, $338,344 cash was used or provided in investing activities and net of reserves $250,000 during the years ended August 31, 2010. This cash was issued to Global Finishing Inc for joint ownership of mining properties in Ecuador. The investing funds are recorded as a Note Receivable due from Global Finishing Inc. until collected or the parties can work out an equity sharing agreement on the property the funds were applied to.
Cash from Financing Activities
As of August 31, 2010, the Company has mostly funded its initial operations through the issuance of $341,450 in shareholder notes payable and $57,396 in other notes payable. To date, $338,344 of the notes payable is offset in Notes Receivable from Global Finishing Inc. for Innocent Inc. contribution to acquire mining interest in Ecuador.
Due to the "start up" nature of our business, we expect to incur losses as it expands. To date, our cash flow requirements have been primarily met by equity financings. Management expects to keep operating costs to a minimum until cash is available through financing or operating activities. Management plans to continue to seek other sources of financing on favorable terms; however, there are no assurances that any such financing can be obtained on favorable terms, if at all. In the event Innocent Inc. is unable to generate sufficient profits or unable to obtain additional funds for our working capital needs, we may be forced to cease or curtail operations. Furthermore, there is no assurance the net proceeds from any successful financing arrangement will be sufficient to cover cash requirements during the initial stages of the Company's operations. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
16
Going Concern
The audited financial statements for the years ended August 31, 2010 and 2009 with cumulative totals from inception, included in this annual report, have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has generated $0 in revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate substantial earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As at August 31, 2010, our company has accumulated losses of $230,395 since inception. As we do not have sufficient funds for our planned operations, we will be required to raise additional funds for operations.
Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended August 31, 2010, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
The company plans to raise additional capital by the use of Notes Payable, Convertible Notes Payable, Private Placements, partnerships, and revenue sharing in future opportunities. This method of funding may lead to stock dilution and changes in control. The company’s operating budget to maintain the public entity reporting requirements is approximately $50,000. The balance of funding necessary to complete the initial Mineral Hill Exploration obligation is approximately $460,000. Innocent Inc. is in receipt of a non-binding commitment letter to fund the $460,000 from Quote Brand Limited to provide funding within the next 60 to 90 days. QuoteBrand is currently a significant note holder and its principals and associates are shareholders of the company. Given the investment to date we expect that they will complete the necessary funding of the Mineral Hill Exploration project. We are still in discussion with Global Finishing Inc. concerning Ecuador, and upon completion of a funding Global Finishing Inc. expects to receive Global has indicated they intend to repay the notes receivable in the amount of $389,000.00. We continue to present to various funding groups the current opportunities in attempts to secure additional capital.
As of August 30, 2011 the QuoteBrand non-binding commitment letter to fund, which was extended to the month of august, has not been successful. We have concluded that the Funding is not currently available and will not be available in a timely manner. Therefore, Innocent Inc., notified Steele Resources and the parties to the initial joint venture agreement decided to mutually terminated the JV Agreement on August 31, 2011 to fund the $460,000 past due funding and the additional $4,000,000 for the Mineral Hill project.
Future Financings
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to secure sufficient funding from the sale of our common stock to fund our marketing plan and operations. At this time, we cannot provide investors with any assurance that we will be able to secure sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
17
ITEM 8. FINANCIAL STATEMENTS
INNOCENT, INC.
(A DEVELOPMENT STAGE COMPANY)
Financial Statements
August 31, 2010 and 2009
F-1
INNOCENT, INC.
(A DEVELOPMENT STAGE COMPANY)
Financial Statements
August 31, 2010 and 2009
TABLE OF CONTENTS
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| Page(s) |
Report of Independent Registered Accounting Firm | F-3 | |
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| |
Balance Sheets as of August 31, 2010 and 2009 | F-4 | |
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Statements of Operations for years ended August 31, 2010 and 2009 and the period of September 27, 2006 (Inception) to August 31, 2010 | F-5 | |
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Statement of Changes in Stockholders’ Equity (Deficit) Cumulative from September 27, 2006 (Inception) to August 31, 2010 | F-6 | |
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Statements of Cash Flows for the years ended August 31, 2010 and 2009 and the period of September 27, 2006 (Inception) to August 31, 2010 | F-7 | |
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Notes to the Financial Statements | F-8 | |
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Innocent, Inc.
We have audited the accompanying balance sheets of Innocent, Inc. (a development stage company) (the Company) as of August 31, 2010 and 2009, and the related statements of operations, changes in stockholders' equity, and cash flows for the years then ended, and the period September 27, 2006 (inception) through August 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Innocent, Inc. as of August 31, 2010 and 2009, and the results of its operations and cash flows for the years then ended, and the period from September 27, 2006 (inception) through August 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in financial statement Note 2, the Company has incurred losses since inception, and has not engaged in any operations. This raises substantial doubt about the Company's ability to meet its obligations and to continue as a going concern. Management's plans in regard to this matter are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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| /s/ Eddy Chin, Chartered Accountant |
| Eddy Chin, Chartered Accountant |
F-3
F-4
F-5
F-6
F-7
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 1 – Nature of Business
Innocent, Inc. (“Company”) was organized September 27, 2006 under the laws of the State of Nevada for the purpose of selling new food products produced or developed by North American companies to foreign markets. On August 31, 2009, the Company discontinued its involvement in the sales of tea due to a strategic change in business focus by the acquisition of mineral rights as disclosed in the Company’s 8-K filed with the SEC on September 2, 2009. The Company has elected a fiscal year end of August 31.
The Company currently has limited operations and, in accordance with ASC 915 “Development Stage Entities,” is considered a Development Stage Company. The Company has been in the development stage since its formation and has realized minimal revenues from its operations.
Note 2 – Significant Accounting Policies
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of August 31, 2010 or 2009.
Income taxes
The Company accounts for income taxes under FASB ASC 740 "Income Taxes." Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Share Based Expenses
ASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. , may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: ( a ) the option to settle by issuing equity instruments lacks commercial substance or ( b ) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity - Based Payments to Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: ( a ) the goods or services received; or ( b ) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.
F-8
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 2 – Significant Accounting Policies (continued)
Going Concern
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) as a last resort, seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Fair Value of Financial Instruments
The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, trade accounts receivable, and accounts payable and accrued expenses. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at August 31, 2010.
FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
The Company does not have any assets or liabilities measured at fair value on a recurring basis at August 31, 2010 or 2009. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the years ended August 31, 2010 or 2009.
Earnings Per Share Information
FASB ASC 260, “ Earnings Per Share” provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Basic and diluted loss per share were the same, at the reporting dates, as there were no common stock equivalents outstanding.
F-9
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 2 – Significant Accounting Policies (continued)
Revenue Recognition
The Company's financial statements are prepared under the accrual method of accounting. Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured and goods have been delivered or services performed.
Recently Implemented Standards
ASC 105, Generally Accepted Accounting Principles ("ASC 105") (formerly Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162) reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board ("FASB") into a single source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. All guidance contained in the Accounting Standards Codification ("ASC") carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed "non-authoritative". ASC 105 is effective on a prospective basis for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the guidance included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Company's references to GAAP authoritative guidance but did not impact the Company's financial position or results of operations.
ASC 855, Subsequent Events ("ASC 855") (formerly Statement of Financial Accounting Standards No. 165, Subsequent Events ) includes guidance that was issued by the FASB in May 2009, and is consistent with current auditing standards in defining a subsequent event. Additionally, the guidance provides for disclosure regarding the existence and timing of a company's evaluation of its subsequent events. ASC 855 defines two types of subsequent events, "recognized" and "non-recognized". Recognized subsequent events provide additional evidence about conditions that existed at the date of the balance sheet and are required to be reflected in the financial statements. Non-recognized subsequent events provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date and, therefore; are not required to be reflected in the financial statements. However, certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. This guidance was effective prospectively for interim or annual financial periods ending after June 15, 2009. The Company implemented the guidance included in ASC 855 as of April 1, 2009. The effect of implementing this guidance was not material to the Company's financial position or results of operations.
In August 2009, the FASB issued Accounting Standards Update No. 2009-05, “Measuring Liabilities at Fair Value,” (“ASU 2009-05”). ASU 2009-05 provides guidance on measuring the fair value of liabilities and is effective for the first interim or annual reporting period beginning after its issuance. The Company’s adoption of ASU 2009-05 did not have an effect on its disclosure of the fair value of its liabilities.
In September 2009, the FASB issued ASC Update No. 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) ("ASC Update No. 2009-12"). This update sets forth guidance on using the net asset value per share provided by an investee to estimate the fair value of an alternative investment. Specifically, the update permits a reporting entity to measure the fair value of this type of investment on the basis of the net asset value per share of the investment (or its equivalent) if all or substantially all of the underlying investments used in the calculation of the net asset value is consistent with ASC 820. The update also requires additional disclosures by each major category of investment, including, but not limited to, fair value of underlying investments in the major category, significant investment strategies, redemption restrictions, and unfunded commitments related to investments in the major category.
F-10
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 2 – Significant Accounting Policies (continued)
Recently Implemented Standards (continued)
The amendments in this update are effective for interim and annual periods ending after December 15, 2009 with early application permitted. The Company does not expect that the implementation of ASC Update No. 2009-12 will have a material effect on its financial position or results of operations.
In June 2009, FASB issued Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R) ("Statement No. 167"). Statement No. 167 amends FASB Interpretation No. 46R, Consolidation of Variable Interest Entities an interpretation of ARB No. 51 ("FIN 46R") to require an analysis to determine whether a company has a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the Company that has a) the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. The statement requires an ongoing assessment of whether a company is the primary beneficiary of a variable interest entity when the holders of the entity, as a group, lose power, through voting or similar rights, to direct the actions that most significantly affect the entity's economic performance. This statement also enhances disclosures about a company's involvement in variable interest entities. Statement No. 167 is effective as of the beginning of the first annual reporting period that begins after November 15, 2009. Although Statement No. 167 has not been incorporated into the Codification, in accordance with ASC 105, the standard shall remain authoritative until it is integrated. The Company does not expect the adoption of Statement No. 167 to have a material impact on its financial position or results of operations
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140 ("Statement No. 166"). Statement No. 166 revises FASB Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Extinguishment of Liabilities a replacement of FASB Statement 125 ("Statement No. 140") and requires additional disclosures about transfers of financial assets, including securitization transactions, and any continuing exposure to the risks related to transferred financial assets. It also eliminates the concept of a "qualifying special-purpose entity", changes the requirements for derecognizing financial assets, and enhances disclosure requirements. Statement No. 166 is effective prospectively, for annual periods beginning after November 15, 2009, and interim and annual periods thereafter. Although Statement No. 166 has not been incorporated into the Codification, in accordance with ASC 105, the standard shall remain authoritative until it is integrated. The Company does not expect the adoption of Statement No. 166 will have a material impact on its financial position or results of operations.
Note 3 – Stockholders’ Equity
Common stock
The authorized common stock of the Company consists of 75,000,000 shares with par value of $0.001.
During the period from September 27, 2006 (inception) to November 30, 2008, the Company issued 4,000,000 shares of its $.001 par common stock to its directors for total cash proceeds of $4,000. Additionally, the Company issues 3,000,000 shares of its common stock for a total cash consideration of $30,000.
Common stock (continued)
During the year ended August 31, 2010, the Company issued 3,000,000 shares for services performed; 10,000,000 shares for the conversion of a note payable; and 10,000,000 shares held in escrow. The value of the shares was determined by the Board of Directors at the time the Company secured ten thousand dollars ($10,000.00) in funding from outside parties to fund the company, that funding was completed at .001 per share and the same per share value applied.
There were 30,000,000, with 20,000,000 of these shares issued and outstanding and 10,000,000 held in escrow toward the share exchange with Global Finishing Inc. which was cancelled on October 20, 2010 and 7,000,000 shares issued and outstanding at August 31, 2010 and 2009.
F-11
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 3 – Stockholders’ Equity (continued)
Net loss per common share
Net loss per share is calculated in accordance with FASB ASC 260, “ Earnings Per Share. ” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during 2010 or 2009 and since inception. As of August 31, 2010 and 2009 and since inception, the Company had no dilutive potential common shares.
Note 4 – Income Taxes
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended August 31, 2010 or 2009, or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the consolidated balance sheet. All tax returns for the Company remain open.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:
|
|
Income tax provision at the federal statutory rate | 35% |
Effect on operating losses | (35%) |
| - |
Changes in the net deferred tax assets consist of the following:
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
| 2009 |
| ||
Net operating loss carry forward |
| $ | 139,582 |
|
| $ | 27,886 |
|
Valuation allowance |
|
| (139,582 | ) |
|
| (27,886 | ) |
Net deferred tax asset |
| $ | - |
|
| $ | - |
|
A reconciliation of income taxes computed at the statutory rate is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
| 2009 |
|
| Since Inception |
| |||
Tax at statutory rate (35%) |
| $ | 48,854 |
|
| $ | 9,760 |
|
| $ | 80,638 |
|
Increase in valuation allowance |
|
| (48,854 | ) |
|
| (9,760 | ) |
|
| (80,638 | ) |
Net deferred tax asset |
| $ | - |
|
| $ | - |
|
| $ | - |
|
The net federal operating loss carry forward will expire in 2026. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
F-12
INNOCENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
Note 5 – Related Party Transactions
The President of the Company provides management services to the Company. During the years ended August 31, 2010 and 2009 management services of $3,000 were charged to operations. A director of the Company provides consulting services to the Company. During the year ended August 31, 2009 consulting services of $2,000 were charged to operations. The President does not have a contract.
During the period from inception to August 31, 2010, shareholders of the Company provided $339,450 of loans to the Company in regular installments. The loans bear interest at 6.75% per annum, are payable on demand and as such are included in current liabilities. The principal balance of the loans were $339,450 and $13,000 with $4,214 and $843 of accrued interest payable as of August 31, 2010 and 2009 .
Note 6 – Subsequent Events
On October 20, 2010, the Company terminated the agreement with Global Finishing Inc. to acquire 51% of the issued and outstanding shares of Global Finishing Inc. in a share exchange. The Company had previously issued 10,000,000 shares which were held in escrow. These shares will be cancelled and returned to treasury and reflected in the 1 st quarter filing.
F-13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
a) Evaluation of Disclosure Controls and Procedures
The Company's Chief Executive Officer, who is its principal executive and chief financial officer, completed an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period (August 31, 2010) covered by this Form 10-K. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company's Chief Executive Officer & CFO, has concluded the Company's disclosure controls and procedures, as of the end of the fiscal year covered by this Form 10-KA - were ineffective because of comments from the SEC that required additional disclosure and restatement of other disclosed information.
Conclusions
Based upon the evaluation of our controls, the chief executive officer/CFO has concluded that, the disclosure controls and procedures are ineffective providing reasonable assurance that material information relating to the company activity is communicated in sufficient detail. Although, changes have been made to provide the level of detail that is required in the company filings based upon the SEC comments, the company is not prepared at this time to remove the ineffective status of the disclosure controls and procedures. The company will continue to work in these deficiencies.
(b) Management's Annual Report on Internal Control over Financial Reporting
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act and for assessing the effectiveness of internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer/ Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management evaluates the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – “Integrated Framework.” Management, under the supervision and with the participation of the Company’s Chief Executive Officer/ Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of August 31, 2010 and concluded that it is ineffective in assuring that the financial reports of the Company are free from material errors or misstatements.
Management has identified material weaknesses and is taking action to remedy and remove the weakness in its internal controls over financial reporting:
·
Lack of an independent board of directors with financial experience for Audit Committee and Financial Disclosure. The current Board of Directors is evaluating expanding the board of directors to include additional independent directors with financial Experience. The company, as financial resources are available plans to utilize outside CPA or other professional services to review the company financial reporting.
·
Lack of Segregation of Duties, as the same Officer/Director is responsible for initiating and recording transactions, thereby creating segregation of duties weakness. The company is working on funding and/or joint ventures and acquisitions which will lend support to the current sole officer of the corporation.
18
·
Comment letters from the SEC to expand/clarify information submitted in the prior filings. The company has addressed the initial comment letters from the SEC and is in the process of amending the related filings. The company will continue to review/research the SEC guidelines in insure future filings contain the necessary information and proper classification.
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
This Annual Report on Form 10-KA does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management's report in this Annual Report on Form 10-K.
Conclusions
Based upon the evaluation of our controls, the chief executive officer/CFO has concluded that, the internal control over financial reporting are ineffective providing reasonable assurance that material information relating to the company activity is communicated in sufficient detail. Although, changes have been made to provide the level of detail that is required in the company filings based upon the SEC comments, the company is not prepared at this time to remove the ineffective status of the internal control over financial reporting The Company will continue to work in these deficiencies.
(c) Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial reporting that occurred during the period ended August 31, 2010 that have materially affected, or that are reasonably likely to materially affect, the Company's internal control over financial reporting
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
All directors of our company hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. The officers of our company are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.
Our directors, executive officers and other significant employees, their ages, positions held and duration each person has held that position, are as follows:
| Position Held with the |
| Date First Elected |
Name | Corporation | Age | /Appointed |
Wayne Doss | CEO/CFO Director | 57 | August 10, 2009 |
Marcus Mueller | Director | 43 | April 12, 2010 |
19
Business Experience
The following is a brief account of the education and business experience of each director, executive officer and key employee, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.
Wayne Doss, age 56, is appointed the President, CEO, Secretary, and Director of the Company. Mr. Doss has served as CFO and CEO for over 25 years in both Public and Private Companies. Mr. Doss served as CEO of Keller Industries for 9 years, a $250,000,000 Building Products Company with 4,000 employees. Over the past 5 years Mr. Doss has consulted and served various capacities assisting small public companies with start-ups, interim officer positions, accounting issues and regulatory filings. Mr. Doss is a graduate from the University of Maryland with Degrees in accounting and business management.
Marcus Mueller, 43 began international trading of various steel, building and other products into Germany from Korea, France and China. In 1998 he joined Klockner & Co. Group, recognized as the largest independent steel and metal distributor by turnover worldwide. As VP Trade and Finance in Canada, he was responsible for international sales & purchases (various products) and all associated contractual, financial, logistics and taxation requirements. In 2005 he established Trading House Worldwide Corp., which provides consulting services to the steel & iron ore industry as well as international trading in steel from Asia, Egypt and Europe into NAFTA, as well as raw material and metal scrap trading in international markets. Consulting services include negotiating off-take agreements for iron ore, carbonites such as coking coal, thermal coal and graphite, limestone and a variety of other products.
Our directors, executive officers and control persons have not been involved in any of the following events during the past ten years:
1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Innocent Inc. does not have any committees of the board of directors at this time. The board of directors does not have a nominations committee because there is one director and shareholder suggestions would be known to the entire board. As such, the board of directors believes there will be sufficient communication by shareholders with the board about matters and nominees to be brought to its attention.
Innocent Inc. directors functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of the Company's independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; and (3) engaging outside advisors. Innocent Inc., board of directors has determined that its directors are not an "audit committee financial expert" within the meaning of the rules and regulations of the SEC. Innocent Inc., board of directors has determined, however, that its directors are able to read and understand fundamental financial statements and has business experience that results in that member's financial sophistication. Accordingly, the board of directors have directed that, in light of the material weaknesses identified in our disclosure controls and procedures and internal control over financial reporting, that the CEO become more familiar with the SEC Filing requirements and the company will seek additional outside assistance as funding becomes available to provide such a service.
The directors will serve as directors until our next annual shareholder meeting or until a successor is elected who accepts the position. Directors are elected for one-year terms. Officers hold their positions at the will of the Board of Directors, absent any employment agreement. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of Innocent's affairs.
20
Code of Ethics
The Board of Directors adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers and employees, including our CEO and senior officers. A copy of our Code of Ethics is attached hereto as an Exhibit 14. Shareholders may also request a copy of the Code of Ethics from: Innocent Inc., Investor Relations, 3280 Suntree Blvd, Suite 105, and Melbourne, FL 32940
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of our common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of our common stock. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth information concerning all compensation paid or accrued by us to our President and Chief Executive Officer and Chief Financial Officer and Director during the fiscal period ended August 31, 2010.
On September 1, 2009 Wayne A. Doss CEO/CFO, was issued 3,000,000 shares of rule-144 restricted common stock for services.
Option Grants in 2010
No options were granted during 2009 or 2010.
Aggregated Option Exercises in 2010 and 2009 Year-End Option Values
No options were exercised by our Officers or Directors during 2010 or 2009.
Stock Incentive Plan - Awards in 2010
During 2010 or 2009, no shares, options or other rights were granted to any of our employees or Officers.
Director Compensation
No options were granted or payments made in compensation for services rendered to any Innocent directors.
21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our shares of common stock at December November 13, 2010, by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each of our directors, (iii) our executive officers, and (iv) by all of our directors and executive officers as a group. Each person named in the table, has sole voting and investment power with respect to all shares shown as beneficially owned by such person and can be contacted at our executive office address.
Title of Class | Name of Owner | Amount and Nature of Beneficial Ownership | Percent of Class (%) |
Common | Wayne A. Doss CEO/CFO | 3,000,000 | 15% |
Common | Alliance Strategic | 5,000,000 | 25% |
Common | Bay Street Capital | 5,000,000 | 25% |
Common | Marcus Mueller, DIR | 110,000 | .5% |
*Based upon the issued and outstanding of 20,000,000
The percent of class is based on 20,000,000 shares of common stock issued and outstanding as of the date of this annual report.
The Company has no securities authorized for issuance under equity compensation plans.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the fiscal year ended August 31, 2010:
The President of the Company provides management services to the Company. During the year ended August 31, 2010 management services of $11,700 including shares issued above, (August 31, 2009 - 00) were charged to operations.
Otherwise, no director and officer, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all of our outstanding shares, nor any promoter, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us.
RELATED PARTY NOTE HOLDERS:
|
| 5% HOLDER |
|
NAME | LOAN AMOUNT | OFFICER/ DIRECTOR | SHAREHOLDER |
|
|
|
|
Quote Brand Limited | 50,000 |
| YES |
|
|
|
|
Bay Street Capital | 1,490 | YES |
|
|
|
|
|
Aleksandr Kryukov | 13,000 | YES |
|
|
|
|
|
One Financial Corp | 14,970 |
| YES |
|
|
|
|
La Prima Investments Ltd | 250,000 |
| YES |
(aka) Dr. Sam Pillersdorf |
|
|
|
22
Our management is involved in other business activities and may, in the future become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
|
| Year Ended August 31, |
|
| Period Ended |
| ||||||
|
| 2010 |
|
| 2009 |
|
|
| ||||
Audit fees |
| $ | 9,385 |
|
| $ | 6,000 |
|
| $ | 3,500 |
|
Audit-related fees |
|
| - |
|
|
| - |
|
|
| - |
|
Tax fees |
|
| - |
|
|
| - |
|
|
| - |
|
All other fees |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fee |
| $ | 9,385 |
|
| $ | 6,000 |
|
| $ | 3,500 |
|
Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements. All other fees relate to professional services rendered in connection with the review of the quarterly financial statements.
Our policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services. Under our audit committee's policy, pre-approval is generally provided for particular services or categories of services, including planned services, project based services and routine consultations. In addition, the audit committee may also pre-approve particular services on a case-by-case basis. Our audit committee approved all services that our independent accountants provided to us in the past two fiscal years.
PART IV
ITEM 15. EXHIBITS
(a) The following exhibits are included as part of this report:
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Innocent Inc.
/s/ Wayne A Doss
Wayne A Doss
CEO/CFO, and Director
Dated: September 7, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Innocent Inc.
/s/ Wayne A Doss
Wayne A Doss
CEO/CFO and Director
Dated: September 7, 2011
/s/ Marcus Mueller
Marcus Mueller
Director
Dated: September 7, 2011
24
EXHIBIT 10.1
Lease Assignment/Contract Rework Services
Thomas Well Project
THIS PARTICIPATION AGREEMENT (“the Agreement”) is made and entered into effective the 1st day of December, 2010, by and between Innocent Inc. (INCT) , 2000 NE 22 nd St. Wilton Manors, FL., 33305 (“Buyer”), and Sedunda Oportunidad, LLC Ronald Davis (“in trust”) ., (Seller) whose address is 4412 8th Street SW, Vero Beach, FL 32968, 772.584.3308, (“Purchaser”) and Seller and Purchaser are sometimes collectively referred to herein as “ the Parties ”.
W I T N E S S E T H
WHEREAS , Purchaser desires to acquire operating Oil and Gas assets, and
WHEREAS , Seller is an individual that recently purchased Oil and Gas Lease rights from a Portfolio Management Company (Original Agreement is attached) and represents that he owns, controls, and have under agreement to acquire or option to acquire or have working interests in certain Oil and Gas Leases, hereinafter sometimes referred to as “Oil and Gas Leases” or contractually and more specifically for this agreement the “Thomas Lease ” located within the field description as follows:
The Seller represents it owns, controls, or has commitments to certain oil and Gas leases, hereinafter sometimes referred to as “Leases: or contractually as the 1 Thomas Well # 1” located within the field description as follows;
Thomas Lease:
WHEREAS, the Seller represents that the Oil and Gas Leases – One well located: Center of South Quarter Section 7, Township 24 North, Range 5 West, Garfield County, Oklahoma
WHEREAS , Purchaser desires to acquire a 100% working interest in the “ Thomas Well # 1” that is currently needs reworking as per the AFE as indicated in “Exhibit B”.
WHEREAS, Purchaser has agreed that all rights, titles, interests and privileges granted herein unto Purchaser and all rights and obligations attributable thereto after the date hereof shall be owned and borne by Purchaser in the percentage set forth in this agreement.
NOW, THEREFORE , in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
1. Purchaser Oil and Gas Lease Working Interest
a) Following the receipt from Purchaser of a timely and duly executed original of this Agreement, the tendering of payment specified in Article I.B. Herein below, Seller will acknowledge the Purchaser has purchased Working Interest in the oil and gas lease it acquires and made a part hereof, of the undivided One Hundred Percent (100%) working interest and to the Oil and Gas Leases acquired by Seller subject to the following terms, conditions, reservations and limitations:
b) The above-mentioned Working Interest shall be made without warranty of any kind, expressed or implied, except by, through and under Seller.
2. Said Working Interest shall be made subject to the terms, covenants and conditions of the following:
a) The terms and provisions in the Oil and Gas Leases subject to this agreement;
b) The terms and provisions of this agreement;
c) In the event any oil and gas lease acquired within the lease Area and subject to this Agreement, covers less than the full undivided fee estate in the oil, gas and associated hydrocarbons in the lands covered thereby, or in the event the leasehold interest acquired covers less than 100.00% of the leasehold estate in said lease, then as to such oil and gas lease the interest assigned and the overriding royalty interests reserved herein shall be proportionately reduced as to the interest acquired; and
d) Seller shall deliver to Purchaser as described in this document with 100% working Interest from a net revenue interest of 82%. The difference goes to the Landowner as Royalty.
3. The interest to be assigned to Purchaser and the interest reserved herein below unto Seller shall be subject to their proportionate share of all royalties, taxes and operating costs.
a) Consideration;
Purchaser |
| Working Interest % |
| Amount |
Innocent Inc. |
| 100% |
| $150,000.00 |
Payment for the Assignment Agreement/Working Interest is to be paid as follows;
b) The purchase price is $150,000.00 for 100% of the Lease Rights and the Company will issue a 10% interest bearing Note Payable for the property and take control on a as is and the well must be reworked to become fully operational.
c) Innocent Inc. must forward $75,000 to the Operator of the Thomas Lease for the completion of piping to the main gas line and reworking the well.
d) Additional cost will be worked out with the Operator to bring to full production capability by Innocent Inc.
e) When the initial payment of $75,000 has been paid to the Operator the Lease will be assigned to the Purchaser. In the event, that within 90 days the funding for the operational and well connection and reworking is not progressed to the satisfaction of the seller, the note will be cancelled and the lease rights returned to the seller and any rework/installation funding will be forfeited.
f) In-or-Out on Prospect Well Completions
All participating parties in the Initial Wells of a given Project elect to complete said well and Purchaser cannot elect to non-consent the completion, the rights of Purchaser for said Project shall, ipso facto, terminate and there shall be an automatic reversion to Seller of all rights, titles and interests assigned to Purchaser pursuant to the terms and provisions of this Agreement. Such interest shall be free and clear of all leasehold burdens, liens and encumbrances not specifically authorized in this agreement.
ARTICLE II
Operating Agreement
It is agreed that the execution of this agreement by the parties hereto shall also constitute acceptance of the terms of a industry standard Operating Agreement, and said Operating Agreement shall become effective as of the date hereof as to all operations and other activities conducted on the Contract Area described therein. In the event of conflict or inconsistency between the terms and provisions of this agreement and those of the Operating Agreement, it is stipulated that the terms and provisions of this agreement shall prevail.
ARTICLE III
Area of Mutual Interest
The “ Thomas Well #1” leases and any new lease to be acquired under this agreement, identified within the legal descriptions above, shall be designated as an Area of Mutual Interest (“AMI”) which shall expire on the termination of this Agreement. If any party hereunder acquires any interest within the AMI, the acquiring party will notify the non-acquiring party in writing of the terms of the acquisition and any costs and/or obligations incurred pursuant thereto within fifteen (15) days following the acquisition. The non-acquiring party will elect in writing within thirty (30) days from its receipt of such notice, as to its election to participate or not participate with its proportionate share of the acquisition. Each non-acquiring party’s election to participate will be accompanied by payment of its share of costs associated with the acquisition. If the non-acquiring party elects not to participate with its proportionate share of the acquisition, the acquiring party may retain the interest for its own benefit.
The non-acquiring party’s failure to respond and make payment within the designated time frame shall be deemed an election not to participate in the acquisition. If the interest acquired covers lands lying partially inside and partially outside the boundaries of the AMI, the acquiring party shall offer the entirety of such interest to the non-acquiring party. If a non-acquiring party acquires its proportionate share of such interest, the lands lying outside the AMI and covered by the interest acquired, shall become a part of the “ Thomas Well # 1” Lease and any new lease to be acquired subject to this Agreement and the AMI shall be enlarged to include said lands. Each lease, right, title or interest acquired under the terms of this AMI shall be subject solely to the burdens specified in this agreement and shall include specifically the carried working Interest specified in herein above.
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The prospect needs to be evaluated by Purchaser’s verification efforts with the understanding that a certain amount of risk is involved in the search and joint venture of oil production in this field despite third party geological reports and efforts by Seller to determine that there are economic quantities of oil to be produced from the “Thomas Lease” lease or any new lease to be acquired under this agreement.
Seller does not normally deal with individuals or companies who are not other oil companies or experienced service contractors or sophisticated investors, and it is understood all parties have experience in the oil and gas industry or understand the risks associated with doing business within that industry.
Seller acquired the property but has no first-hand experience and was relying on the Operator to finalize the start-up and maintain the property, sell was acquired for investment property.
ARTICLE IV
Miscellaneous
A. Paragraph Headings
The paragraph headings inserted in this agreement are utilized solely for reference purposes and do not constitute substantive matter to be considered in construing the terms of this agreement.
B. Time is of the Essence
It is specifically understood and agreed that time is of the essence hereof.
C. Liability
All liability hereunder shall be several and not joint or collective. It is not the purpose of this agreement to create a Partnership for a specific purpose, joint venture , or any other relationship, which would render the parties liable as Parties, associates, or joint ventures.
D. Reassignment
If any party hereto desires to release, surrender, abandon or let expire any of the Oil and Gas Leases, it shall first give the other parties sixty (60) days advance written notice thereof and the other parties shall have the right at their option to receive an assignment of said lease(s) at no cost to the parties receiving the assignment
E. Entire Agreement
This agreement contains the entire agreement between the parties hereto relative to the “ Thomas Well # 1” lease and a ny new lease to be acquired outlined as described in legal descriptions above. Any prior agreements, promises, negotiations or representations not expressly set forth in this agreement are of no force and effect. No variations, modifications, or changes herein or hereof shall be effective unless evidenced by a written document executed by the parties hereto.
F. Counterparts
This agreement may be executed in any number of counterparts and each counterpart so executed shall have the same force and effect as an original instrument and as if all of the parties to the aggregate counterparts had signed the same instrument, provided that this agreement shall not be effective, as to any party until executed by the party hereto.
G. Binding Agreement
The terms, covenants and conditions of this agreement shall be binding upon and shall inure to the benefit of the parties hereto and to their respective heirs, devises, legal representatives, successors and assigns, and such terms, covenants and conditions shall be deemed covenants running with the land; however, it is stipulated that no assignment or transfer by Purchaser however accomplished, of any right, title or interest acquired hereunder shall relieve Purchaser of any liability or obligation previously incurred unless otherwise agreed to in writing by the parties subject hereto.
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H. News Releases
Any party hereto desiring to issue a news release concerning operations conducted on the Contract Area shall provide the other parties hereto with copies of the proposed release and no such news release shall be issued without first obtaining the written consent of all parties hereto which consent shall not be unreasonable withheld. The foregoing notwithstanding, unless the other parties object in writing to a proposed news release or the contents thereof within 24 hours after receipt of same, any party failing to object within the time provided will be conclusively presumed to have approved the proposed news release. The leases shall be referred to as the GP Project for identification purposes.
I. Notices/Information
All notices or information authorized or required between the parties and required by the provisions of this agreement or the operating Agreement, unless otherwise specifically provided, shall be given in writing by email or mail, postage or charges prepaid, or by telex or facsimile and addressed to the party to whom the notice is given at the address listed in the Preamble of this agreement. The originating notice given under any provision hereof or in the Operating Agreement shall be deemed given only when received by the party to whom such notice is directed, and the time for such party to give any notice in response thereto shall run from the date and time the originating notice is received.
K. Termination
This agreement terminates if the parties mutually agree or automatically by the seller if the purchase price is not fully settled as outlined under the payment terms in paragraph 3B above or unless other payment terms are agreed to by the Purchaser.
L. Governing Law
This Working Interest Purchase and Sale Agreement shall be governed by and construed in accordance with the State Laws of OK in the United States of America. The Purchaser hereby irrevocably attorneys to the jurisdiction of the courts in the State of OK, USA with respect to any matters arising out of this Participation Agreement and Working Interest
IN WITNESS WHEREOF, this instrument is executed in duplicate by each of the parties hereto as of the date hereinabove first written.
Purchaser: Innocent Inc.
By: /s/Wayne A Doss
Dated: December 1, 2010
Wayne A Doss (CEO/CFO)
Seller: Ronald Davis
By: /s/Ronald Davis
Dated: December 1, 2010
Ronald Davis (Seller)
Sedunda Oportunidad, LLC
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Exhibit 10.2
COLLATERAL AGREEMENT
This Agreement (this "Agreement") is entered into by and between GLOBAL FINISHING INC., a Nevada corporation ("the asssignor") its wholly owned subsidiary, an approved Ecuador Company (Globalfinishing Ecuador S A) and INNOCENT INC., a Nevada Corporation ("the assignee").
RECITALS
WHEREAS, Innocent Inc. has outstanding note receivable in the amount of three hundred eighty nine thousand dollars ($389,000) due from Global Finishing Inc.;
WHEREAS, Global Finishing Inc. thru its 100% owned subsidiary Global Finishing Ecuador owns MURCIELAGOS VIZCAYA and LILLY RAI (the collateral property); and
WHEREAS, Innocent Inc. desires collateral for the Note Receivable due and Global Finishing Inc., has agreed to assign fifty percent (50%) interest in the collateral property pending payment in full (expected in ninety days (90)) of the outstanding note due Innocent Inc.
WHEREAS, Innocent Inc. will release any claim on the collateral property upon payment in full of the note receivable, due from Global Finishing Inc.
NOW, THEREFORE, for and in consideration of the mutual covenants and representations and warranties of each other contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Global Finishing Inc., and Innocent Inc. agreed as follows:
Collateral Property: The property is defined in the below description
Table 2: MURCIELAGOS VIZCAYA AREA
ADDITIONAL DATA OF MINING AREA: "439" | ||||
PROCEDURE DATA |
| DETAILS OF THE PETITIONER / OWNER MINER: | ||
Regional Area: | EL ORO. |
| Petitioner: | NATMINCO |
Phase: | MINING CONCESSION |
| Address: | () |
Status: | SUBSCRIBED |
| Phone: |
|
Application Date: | 2001-06-12 12:35:00 |
| ||
Term (months): | 360 |
| CADASTRAL REPORT: | |
Grant Date: | 2001-07-09 |
| Cadastral Report: | FREE |
Registration Date: | 2001-07-19 |
| Cadastral Report Date: | 2010-05-03 |
Extension: | 0 |
| ||
| DATA FILE (if applicable) | |||
GRAPHICATION DATA |
| File Type: |
| |
Geographic Area: | 17 |
| File Date: |
|
Area (ha): | 51.1600 |
| Availability Date: |
|
Geographic Location: | MALVAS, ZARUMA, EL ORO |
| ||
Sector: | MURCIELAGOS-VISCAYA |
| ||
Table 3: LILLY RAI AREA
ADDITIONAL DATA OF MINING AREA: "473" Back | ||||
DATOS DEL TRAMITE |
| DETAILS OF THE PETITIONER / OWNER MINER: | ||
Regional Area: | EL ORO. |
| Petitioner: | CIA. ELIPE S. A. |
Phase: | MINING CONCESSION |
| Address: | Juan de Dios Martínez Mera Nº 34-219 y Federico Páez. Quito |
Status: | SUBSCRIBED |
| Phone: | 2446-661 |
Application Date: | 2001-06-15 10:21:00 |
| ||
Term (months): | 360 |
| CADASTRAL REPORT: | |
Grant Date: | 2001-10-17 |
| Cadastral Report: | FREE |
Registration Date: | 2001-10-24 |
| Cadastral Report Date: | 2010-04-27 |
Extension: | 0 |
| ||
| DATA FILE (if applicable) | |||
GRAPHICATION DATA |
| File Type: |
| |
Geographic Area: | 17 |
| File Date: |
|
Area (ha): | 7.7600 |
| Availability Date: |
|
Geographic Location: | ZARUMA. CABECERA CANTONAL, ZARUMA, EL ORO |
| ||
Sector: | EL AGUACATE |
| ||
2. Closing: The closing of this Agreement (the “Closing") shall be deemed to take place upon execution of this Agreement by Global Finishing Inc. and Innocent Inc.
3. Representations of Innocent Inc: Innocent Inc. hereby represents and warrants that effective this date, the representations and warranties listed below are true and correct:
3.1 Organization: Innocent Inc., is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada with full power and authority to own and use its properties and conduct its business as presently conducted by it.
3.2 Authority: Innocent Inc. has the requisite corporate authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof. The execution and delivery of this Agreement by Innocent Inc. and the consummation of the transactions contemplated hereby will not violate or conflict with any provisions of the Articles of Incorporation, as amended, or Bylaws of Innocent Inc. or contravene any law, rule, regulation, court or administrative order binding on it, or result in the breach of or constitute a default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, lease, judgment, decree, order, award, note, loan or credit agreement or any other material agreement or instrument to which Innocent Inc. is a party or by which it is bound, the default or breach of which would have a material adverse effect on the property and assets of Innocent Inc., considered as a whole. Innocent Inc. has taken all requisite corporate action to authorize and approve the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. Upon due execution and delivery of this Agreement, this Agreement will constitute a valid, legal and binding obligation of Innocent Inc. and Innocent Inc. enforceable against them in accordance with its terms.
3.3 Due Diligence: Innocent Inc. has been furnished from Global Finishing Inc. the legal description of the property identified in the agreement as the collateral property.
3.4 Approvals and Consent: No approval, authorization or other action by, or filing with, any third-party, including a governmental authority is required in connection with the execution, delivery and performance by Innocent Inc. of its obligations under this Agreement and its respective performance of the transactions contemplated hereby.
4. Representations of Global Finishing Inc: Global Finishing Inc. hereby represents and warrants that effective this date, the representations and warranties listed below are true and correct:
4.1 Organization: Global Finishing Inc. is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada with full power and authority to own and use its properties and conduct its business as presently conducted by it.
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4.2 Authority: Global Finishing Inc. has the requisite corporate authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof.
Upon due execution and delivery of this Agreement, this Agreement will constitute a valid, legal and binding obligation of Global Finishing Inc. enforceable against it in accordance with its terms.
4.3 Due Diligence: Global Finishing Inc. has furnished the legal description of the property identified in the agreement as the collateral property.
4.4 Approvals and Consent: No approval, authorization or other action by, or filing with, any third-party, including a governmental authority is required in connection with the execution, delivery and performance by Global Finishing Inc. of its obligations under this Agreement and its performance of the transactions contemplated hereby.
4.5 Litigation: Global Finishing Inc. is not involved in any pending material litigation as it relates to the collateral property
4.6 Applicable Laws: Global Finishing Inc. has complied with all state, federal and local laws in connection with its formation, issuance of securities, organization, capitalization and operations, and no contingent liabilities have been threatened or claims made, and no basis for the same exists with respect to said operations, formation or capitalization, including claims for violation of any state or federal securities laws. Globalfinishing Ecuador S A has been registered and operates in accordance with the new January 1, 2010 Ecuador Mining Laws.
4.7 Disclosure: At the date of this Agreement, Global Finishing Inc. has disclosed all events, conditions and facts materially affecting the collateral property
4.8 Undisclosed Liabilities: Global Finishing Inc. has no material liabilities or obligations whatsoever, either accrued, absolute, contingent or otherwise that would have negative impact to the collateral property with the exception of progress payments due, as disclosed when the property was purchased.
5. Mutual Covenants of the Parties: Global Finishing Inc. and Innocent Inc. each agree to execute any further documents or agreements and to take any further acts that may be reasonably necessary to effect the transactions contemplated hereunder, including, but not limited to, obtaining any consents or approvals of any third-party required to be obtained to consummate the transactions contemplated by this Agreement.
6. Nature and Survival of Representations: All representations, warranties and covenants made by any party in this Agreement shall survive the Closing hereunder and the consummation of the transactions contemplated hereby for 90 days from the date hereof. All of the parties hereto are executing and carrying out the provisions of this Agreement in reliance solely on the representations, warranties and covenants and agreements contained in this Agreement or at the Closing of the transactions herein provided for and not upon any investigation upon which it might have made or any representations, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.
7. Miscellaneous.
7.1 Undertakings and Further Assurances: At any time, and from time to time, hereafter, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to carry out the intent and purposes of this Agreement.
7.2 Waiver: Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party to whom such compliance is owed.
7.3 Notices: All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first class registered or certified mail, return receipt requested, or by Federal Express or other means of overnight delivery to the addresses below:
Global Finishing Inc.:
Richard Diolotte
Global Finishing Inc. Corporation
240-455, du Marais
Quebec, Qc
G1M 3A2
3
Innocent Inc.:
Wayne A Doss
3290 Suntree Blvd
Suite 105
Melbourne, Florida 32940
(828) 702-7687
7.4 Headings: The paragraph and subparagraph headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
7.5 Governing Law and Arbitration Provision: This Agreement shall be governed by the laws of the State of Nevada
7.6 Binding Effect: This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, his respective heirs, administrators, executors, successors and assigns. This Agreement shall not be assigned by any party hereto, except upon the consent, in writing, of the other parties hereto.
7.7 Entire Agreement: This Agreement, including the Exhibits hereto and other documents delivered pursuant to the terms hereof, is the entire agreement of the parties covering everything agreed upon or understood with respect to the transactions contemplated hereby and supersedes all prior agreements, covenants, representations or warranties, whether written or oral, by any party hereto. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof.
7.8 Time: Time is of the essence. The parties each agree to proceed promptly and in good faith to consummate the transactions contemplated herein.
7.9 Severability: If any part of this Agreement is deemed to be unenforceable the balance of the Agreement shall remain in full force and effect.
7.10 Counterparts and Facsimile Signatures: This Agreement and any Exhibits, attachments, or documents ancillary hereto, may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.
GLOBAL FINISHING INC
Date: September 6, 2011
By: /s/ Richard Diotte
Richard Diotte
INNOCENT INC
Date: September 6, 2011
By: /s/ Wayne A Doss
Wayne A Doss
President and CEO
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Exhibit 14
INNOCENT INC.
FINANCIAL CODE OF ETHICS
As a public company, it is of critical importance that INNOCENT INC. NATURAL RESOURCES CORPORATION'S (INNOCENT INC.) filings with the Securities and Exchange Commission be accurate and timely.
The Chief Executive Officer (CEO) has a special role both to adhere to the principles of integrity and also to ensure that a culture exists throughout INNOCENT INC. as a whole that ensures the fair and timely reporting of INNOCENT INC.'s financial results and conditions. Because of this special role, the CEO and all members of INNOCENT INC.'s team are bound by INNOCENT INC.'s Financial Code of Ethics, and by accepting the Financial Code of Ethics, each agrees that they will:
- Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.
- Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate, timely, and understandable disclosure in the reports and documents that INNOCENT INC. files with, or submits to, government agencies and in other public communications.
- Comply with the rules and regulations of federal, state and local governments, and other appropriate private and public regulatory agencies.
- Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be subordinated.
- Respect the confidentiality of information acquired in the course of one's work, except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one's work will not be used for personal advantage.
- Share job knowledge and maintain skills important and relevant to stakeholders needs.
- Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment and in the community.
- Achieve responsible use of, and control over, all INNOCENT INC. assets and resources employed by, or entrusted to yourself, and your department.
- Receive the full and active support and cooperation of INNOCENT INC.'s Officers, Senior Staff, and all employees in the adherence to this Financial Code of Ethics.
Exhibit 31.1
CERTIFICATION OF CEO AND CFO PURSUANT TO
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Wayne A. Doss, certify that:
1. I have reviewed this annual report on Form 10-KA of Innocent Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting
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| Date: September 7, 2011 |
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/s/ Wayne A Doss |
| Wayne A Doss C.E.O. & CFO, DIR |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Wayne A. Doss, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-KA of Innocent Inc., for the fiscal years ended August 31, 2010 and 2009, fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934 and that the information contained in the Annual Report on Form 10-KA fairly presents in all material respects the financial condition and results of operations of Innocent Inc.
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Date: September 7, 2011 |
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/s/ Wayne A Doss |
| Wayne A Doss C.E.O. & CFO |
Exhibit 99.1
QUOTEBRAND LIMITED
Innocent Inc
Mr. Wayne Doss
Innocent Inc.
3280 Suntree Blvd
Ste. 150
Melbourne, FL 32940
June 13, 2011
Dear Mr Doss.
As reference to my letter on the 25th May, we have been delayed due to various colleagues travel plans and summer holidays, and as such, we are delayed sitting down with my colleagues, and completing a final deal.
It is our expectation, to during the month of August to close some portion of the monies that are prepared to enter into a Private Placement Agreement with Innocent Inc as previously mention in our letter in May, and to complete the balance early September.
Regards,
/s/ Ian Nuttall
Ian Nuttall
M.D Director.
21 Bedford Square, London, United Kingdom, WCIB 3HH
Exhibit 99.2
TERMINATION OF DEFINITIVE AGREEMENT
BETWEEN
effective this date: August 31, 2011
STEELE RESOURCES INC. (SELR:OTCBB), 3081 Alhambra Drive, Suite 208 Cameron Park, California
AND
INNOCENT INC. (INCT.PK), 2000 NE 22nd St. Wilton Manors, FL 33305
BACKGROUND:
On February 20, 2011 Innocent Inc. entered into a material definitive agreement with Steele Resources, Inc. (SELR: OTCBB) to acquire 50% of the Mineral Hill Gold Exploration Project. The project is located near Pony Hill, Montana in the Mineral Hill Mining District and consists of 17 patented and 67 unpatented lode mining claims (approximately 1,800 acres). The agreement is a 50/50 Joint Venture under which the two companies will work together to explore and operate the claims. The initial participating interests of Innocent, Inc. and Steele Resources, Inc. in the JV will be 50% and 50%. Under the terms of the agreement, Innocent may contribute up to $5,000,000 in operating funds over one year. In the event those funds were not provided, Innocent would forfeit 10% per $1,000,000 not provided. Steele Resources, Inc. will act as the operating partner and have a commitment to match up to $5,000,000 in funding within one year of Innocent, Inc. contributing its first $1,000,000. Steel Resources, Inc. will forfeit 10% per $1,000,000 not provided under its obligation. Innocent Inc. has made payments of five hundred forty thousand dollars ($540,000) under the terms of the agreement.
On February 7, 2011, INCT advanced an initial $290,000 which allowed SRI to close on the Pony Project representing 17 patented and 67 unpatented mining claims located in the Pony Mining District of Montana.
A second payment expected be completed on or before February 28th, 2011, was completed on March 18, 2011 in the amount of $250,000. These funds were sent directly to Steele Resources, Inc. and Innocent Inc. has received the supporting documentation and issued a Note Payable for these funds on behalf of Innocent Inc. These funds allowed SRI to close on the Atlantic and Pacific mining property mineral lease (the”A&P Project”) representing two patented mining claims located next to the Pony Project and together representing the Mineral Hill Mining Project.
On April 14, 2011, the Company received a notification from its joint venture partner (SRI), that Innocent Inc. was in default on the balance of its funding commitment of the $1,000,000. The Company did not agree with the exact interpretation of the default and Innocent Inc. is seeking the additional capital to fulfill its committed obligation. After further discussion the JV Partners have decided that in consideration of Innocent’s willingness to negotiate, in good faith, a payment plan for the $460,000 currently due from the commitment under the Joint Venture Agreement. Steele Resources was willing to not pursue the default condition established in its letter of notification conditional upon Innocent Inc. entering into a negotiation process with Steele by May 2, 2011. Steele Resources stated that it would not seek any default remediation so long as Innocent negotiates a “good faith” funding solution. The JV Agreement provides ; Under the terms of the JV Agreement INCT and SRC would each own 50% of the Joint Venture however the percentage ownership would be reduced by 10% for each $1,000,000 a party failed to contribute to the Joint Venture . On May 2, 2011 Steele Resources acknowledges that Innocent is providing "good faith" efforts to completing its funding obligations to the Joint Venture Agreement. Innocent acknowledges that a balance of $460,000 remains of the initial $1,000,000 funding obligation. Given Innocent's present funding efforts the parties to the agreement have decided that no default exist and efforts to complete the funding obligation will be supported by both parties. On July 22, 2011, the Company received notification from its joint venture partner (SRI), that Innocent, Inc. had not delivered on its commitment to fund the balance of $460,000 or to provide a viable funding solution, and was terminating the joint venture agreement pending resolution of the refund of the $540,000 previously funded to SRI.
On August 30, 2011 Innocent Inc. notified Steele Resources that the company no longer felt that the capital committed and necessary for the project could be secured by Innocent in a timely manner and the Innocent Inc. felt it was in the best interest of the shareholders of both companies to terminate the agreement.
TERMS AND CONDITIONS OF THE TERMINATION:
The parties to the original material definitive agreement dated February 20, 2011, attached as Exhibit 1; hereby mutually agree to terminate said agreement under the terms and conditions stated below.
Item 1: The five hundred forty thousand dollars ($540,000), funded to-date by Innocent Inc. to Steele Resources Inc. will be repaid to Innocent Inc. and immediately transferred to the parties that funded said funds;
Item 2: The collateral for the five hundred forty thousand dollars $540,000 funded to date will encompass the existing stockpiled ore on site, although the exact net profit is unknown, the parties believed it is sufficient to repay the note holders. This ore referenced on the Steele web site is and will serve as the primary repayment funds to the Innocent Inc. note holders, and the initial net revenue proceeds will be applied to satisfy the referenced note;
Item 3: Steele Resources Inc. will grant to Innocent Inc. an eight percent (8%) of the net revenue proceeds of the stockpile of ore on site;
Item 4: Steele Resources Inc. has the right to repay the funds to satisfy the five hundred forty thousand dollars ($540,000), at its discretion prior to the processing of the stockpile ore currently on site;
Item 5: Steele Resources Inc. has the right to negotiate a separate agreement with the note holders, providing any such agreement transfers the responsibility and obligation of the Innocent Inc. $540,000 note payable to Steele Resources Inc. and upon written acceptance by the current Innocent Inc. note holders.
Item 6: The five hundred forty thousand dollars ($540,000) will continue to be reflected in the financial statements of Steele Resources Inc. as a current note payable due Innocent Inc. and Innocent Inc. will reflect as current term note payable to related parties
Item 7: Upon the completion of the Steele Resource Inc. grant of 8% of the net income value of the stockpiled ore currently on site, Innocent Inc. will have no further rights to any future extracted/or un-extracted minerals contained on the site;
Item 8: Innocent Inc. will forfeit any ownership rights of the property (with the exception of the 8 % of the stockpile ore on site) and in turn Innocent Inc. will not be responsible for any future funding for the development or any current expenses associated with the property. Steele Resources Inc. will become the 100% owner of the site.
Closing: The closing of this agreement (the “Closing") shall be deemed to take place upon execution of this Agreement by Steele Resources Inc. and Innocent Inc.
Authority: Steele Resources Inc. and Innocent Inc. have the requisite corporate authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof. The execution and delivery of this Agreement by Steele Resources Inc. and Innocent Inc. and the consummation of the transactions contemplated hereby will not violate or conflict with any provisions of the Articles of Incorporation, as amended, or Bylaws of Innocent Inc. or contravene any law, rule, regulation, court or administrative order binding on it, or result in the breach of or constitute a default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, lease, judgment, decree, order, award, note, loan or credit agreement or any other material agreement or instrument to which Innocent Inc. is a party or by which it is bound, the default or breach of which would have a material adverse effect on the property and assets of Innocent Inc., considered as a whole. Steele Resources Inc. and Innocent Inc. have taken all requisite corporate action to authorize and approve the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. Upon due execution and delivery of this Agreement, this Agreement will constitute a valid, legal and binding obligation of Steele Resources Inc. and Innocent Inc. enforceable against them in accordance with its terms.
Mutual Covenants of the Parties: Steele Resources Inc. and Innocent Inc. each agree to execute any further documents or agreements and to take any further acts that may be reasonably necessary to effect the transactions contemplated hereunder, including, but not limited to, obtaining any consents or approvals of any third-party required to be obtained to consummate the transactions contemplated by this Agreement.
Nature and Survival of Representations: All representations, warranties and covenants made by any party in this Agreement shall survive the Closing hereunder and the consummation of the transactions contemplated hereby for two (2) years from the date hereof. All of the parties hereto are executing and carrying out the provisions of this Agreement in reliance solely on the representations, warranties and covenants and agreements contained in this Agreement or at the Closing of the transactions herein provided for and not upon any investigation upon which it might have made or any representations, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.
Undertakings and Further Assurances: At any time, and from time to time, hereafter, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to carry out the intent and purposes of this Agreement.
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Waiver: Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party to whom such compliance is owed.
Notices: All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first class registered or certified mail, return receipt requested, or by Federal Express or other means of overnight delivery to the addresses below:
Steele Resources Inc.
3081 Alhambra Drive,
Suite 208
Cameron Park, California 95682
(530) 672-6225
Innocent Inc.
Wayne A Doss
3290 Suntree Blvd
Suite 105
Melbourne, Florida 32940
(828) 702-7687
Headings: The paragraph and subparagraph headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
Governing Law and Arbitration Provision: This Agreement shall be governed by the laws of the State of Nevada. Any dispute arising directly or indirectly from this Agreement shall be settled by arbitration within the State of Nevada. Any arbitration will be conducted by the American Arbitration Association in accordance with its Rules of Commercial Arbitration, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The parties hereto agree that service by certified mail to their business addresses shall constitute sufficient service of process of any proposed arbitration.
Binding Effect: This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, his respective heirs, administrators, executors, successors and assigns. This Agreement shall not be assigned by any party hereto, except upon the consent, in writing, of the other parties hereto.
Entire Agreement: This Agreement, including the Exhibits hereto and other documents delivered pursuant to the terms hereof, is the entire agreement of the parties covering everything agreed upon or understood with respect to the transactions contemplated hereby and supersedes all prior agreements, covenants, representations or warranties, whether written or oral, by any party hereto. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof.
Time: Time is of the essence. The parties each agree to proceed promptly and in good faith to consummate the transactions contemplated herein.
Expenses: Each of the parties hereto shall pay its own expenses incurred in connection with the authorization, preparation, execution and performance of this Agreement and obtaining any necessary regulatory approvals, including, without limitation, all fees and expenses of his respective counsel.
Severability: If any part of this Agreement is deemed to be unenforceable the balance of the Agreement shall remain in full force and effect.
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Counterparts and Facsimile Signatures: This Agreement and any Exhibits, attachments, or documents ancillary hereto, may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.
/s/ Scott Dockter
Scott Dockter
President/CEO
Steele Resources, Inc.
August 31, 2011
/s/ Wayne A Doss
Wayne Doss
President/CEO
Innocent, Inc.
August 31, 2011
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