WEB NEWS Comments & Business Outlook
Jefferson, TX. , May 24, 2018 (GLOBE NEWSWIRE ) -- Innocap, Inc. (OTCQB: INNO) In November 2017, Innocap entered into an agreement with Solar Resources Inc. (“Solar”), a company in Singapore, to assist Solar to recover large shipments of tin from two sunken ships that are believed to be in the waters between Singapore, Indonesia and Malaysia. Innocap and Solar have completed the planning needed to undertake the recovery efforts. The ship that is being used in these recovery efforts is commencing the first of the two salvage projects is being scheduled for this coming week. The ship is fully equipped with all the tools and equipment necessary for a recovery effort of this type and has an experienced crew.
The first salvage project is believed, based on available information, to contain up to 300 tons of tin with an estimated market value of approximately $6,000,000. Innocap is entitled to 40% of the net proceeds of recovered assets. The recovery effort is expected to take up to three weeks to complete. If the tin is found and recovered, it will be brought back to Singapore and sold.
No assurances can be given that the sunken ship will be found and, if found, will have the amount of recoverable tin that the parties to the contract are seeking.
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three
Months
Ended
April 30, 2016
For the Three
Months
Ended
April 30, 2015
General and administrative expenses
$
43,356
$
41,382
Net loss
$
(43,356)
$
(41,382)
Net loss per common share - basic and diluted
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
119,825,000
118,083,427
See accompanying notes to these unaudited financial statements.
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three Months Ended
October 31,
For the Nine Months Ended
October 31,
2015
2014
2015
2014
General and administrative expenses
$
33,820
$
37,916
$
115,326
$
92,803
Net loss
$
(33,820)
$
(37,916)
$
(115,326)
$
(92,803)
Net loss per common share – basic and diluted
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
119,825,000
112,542,391
119,257,234
110,791,176
Management Discussion and Analysis
Revenue
We have not had any revenues from operations as of October 31, 2015.
Operating expenses and net losses for the three months ended October 31, 2015 and 2014 were $33,820 and $37,916, respectively.
Operating expenses and net losses for the nine months ended October 31, 2015 and 2014 were $115,326 and $92,803, respectively. The increase of $22,523 was primarily due to the compensation of $25,000 per quarter to its President that started in April 2014.
Auditor trail
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On August 2, 2015 sent a letter to INNOCAP, INC. (the “Registrant” or the ‘Company”) RBSM LLP (“RBSM”) notifying the Registrant that the firm resigned as the Registrant’s independent registered public accounting firm. RBSM was engaged by the Company on February 18, 2015 .Except as noted in the paragraph immediately below, the reports of RBSM on the Company’s financial statements at January 31, 2015and for the fiscal year then ended did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.
The report of RBSM on the Company’s financial statements as of and for the fiscal year ended January 31, 2015 contained explanatory paragraphs which noted that there was substantial doubt as to the Company’s ability to continue as a going concern as the Company has negative working capital that raises doubt about its ability to continue as a going concern.
During the fiscal year ended January 31, 2015 and through August 2, 2015, the Company has not had any disagreements with RBSM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to RBSM’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s financial statements for such periods.
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three Months Ended
July 31,
For the Six Months Ended
July 31,
2015
2014
2015
2014
General and administrative expenses
$
40,124
$
48,298
$
81,506
$
54,887
Net loss
$
(40,124)
$
(48,298)
$
(81,506)
$
(54,887)
Net loss per common share – basic and diluted
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
119,825,000
111,700,000
118,968,646
111,700,000
Management Discussion and Analysis
Revenue
We have not had any revenues from operations as of July 31, 2015.
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three
Months
Ended
April 30,
For the Three
Months
Ended
April 30,
2015
2014
General and administrative
$
41,382
$
6,589
Net loss
$
(41,382)
$
(6,589)
Net loss per common share -basic and diluted
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
118,083,427
107,189,888
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
Fiscal Years Ended January 31, 2015 and 2014
2015
2014
Revenue
$
-
$
-
General and administrative
137,021
45,936
Net loss
$
(137,021)
$
(45,936)
Net loss per common share - basic and diluted
$
(.00)
$
(.00)
Weighted average number of common shares outstanding
111,978,356
106,500,000
Auditor trail
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) On February 18, 2015, INNOCAP, INC. (the “Registrant” or the ‘Company”) was notified by L.L. Bradford & Company, LLC (“Bradford”) that the firm resigned as the Registrant’s independent registered public accounting firm. Except as noted in the paragraph immediately below, the reports of Bradford on the Company’s financial statements for the years ended January 31, 2014 and 2013 and for the period February 1, 2012 through January 31, 2014 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.
The reports of Bradford on the Company’s financial statements as of and for the years ended January 31, 2014 and 2013 contained explanatory paragraphs which noted that there was substantial doubt as to the Company’s ability to continue as a going concern as the Company has negative working capital that raises doubt about its ability to continue as a going concern.
During the years ended January 31, 2014 and 2013 and through February 18, 2015, the Company has not had any disagreements with Bradford on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Bradford’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s financial statements for such periods.
During the years ended January 31, 2014 and 2013 and through February 18, 2015, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company provided Bradford with a copy of this disclosure set forth under this Item 4.01 and was requested to furnish a letter addressed to the Securities & Exchange Commission stating whether or not it agrees with the above statements.
On February 18, 2015 (the “Engagement Date”), the Company engaged RBSM LLP (“RBSM ”) as its independent registered public accounting firm for the Company’s fiscal year ended February 18, 2015. The decision to engage RBSM as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors.
During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with RBSM regarding either:
1.the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided that RBSM concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or
2.any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K).
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three Months Ended October 31, 2014
For the Three Months Ended October 31, 2013
General and administrative
$
37,916
$
6,527
Net loss
$
(37,916)
$
(6,527)
Net loss per common share – basic and diluted
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
112,542,391
106,500,000
Comments & Business Outlook
INNOCAP, INC.
Statements of Operations
(Unaudited)
For the Three Months Ended
July 31,
2014
July 31,
2013
General and administrative
$
48,298
$
6,000
Net loss
$
(48,298)
$
(6,000)
Net loss per common share -basic and diluted
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding – basic and diluted
111,700,000
106,500,000
Management Discussion and Analysis
The Company is currently actively considering several projects that have been extensively researched by its President. Several trips, including to Indonesia, Malaysia and the Philippines, have been taken. Negotiations, including a letter of intent, have been underway with companies based in Florida and Sweden. A contract has been signed with an Indonesian company. That company is now negotiating a contract with the appropriate Indonesian government departments. If fully executed, the Company would need to obtain financing to carry out its obligations. There is no certainty that such financing could be obtained. The negotiations with the companies in Florida and Sweden, if culminated in a contract similar to the letters of intent, will not require the Company to provide any financing. No assurances can be given regarding the likelihood of these negotiations culminating in such executed contracts.
The Company started accruing compensation of $25,000 per quarter for its President during the quarter ended July 31, 2014. All other expenses incurred during the three and six months ended July 31, 2014 consist of costs incurred by Mr. Tidwell to negotiate potential contracts and professional fees.
Comments & Business Outlook
JOE’S JEANS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
Three months ended
Six months ended
May 31, 2014
May 31, 2013
May 31, 2014
May 31, 2013
(unaudited)
(unaudited)
Net sales
$
48,167
$
30,874
$
95,511
$
60,304
Cost of goods sold
25,594
17,369
51,453
32,484
Gross profit
22,573
13,505
44,058
27,820
Operating expenses
Selling, general and administrative
18,125
10,840
37,077
22,327
Depreciation and amortization
1,160
542
2,387
1,034
Contingent consideration buy-out expense
—
—
—
8,732
19,285
11,382
39,464
32,093
Operating income (loss)
3,288
2,123
4,594
(4,273
)
Interest expense
3,355
127
6,676
197
Other income
(4,818
)
—
(2,268
)
—
Income (loss) before provision for taxes
4,751
1,996
186
(4,470
)
Income tax expense
2,412
823
25
745
Net income (loss) and comprehensive income (loss)
$
2,339
$
1,173
$
161
$
(5,215
)
Earnings (loss) per common share - basic
$
0.03
$
0.02
$
0.00
$
(0.08
)
Earnings (loss) per common share - diluted
$
0.01
$
0.02
$
0.00
$
(0.08
)
Weighted average shares outstanding
Basic
68,148
67,047
68,045
66,849
Diluted
87,096
68,411
87,212
66,849
The accompanying notes are an integral part of these financial statements.
Comments & Business Outlook
JOE’S JEANS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
Three months ended
February 28, 2014
February 28, 2013
(unaudited)
Net sales
$
47,344
$
29,430
Cost of goods sold
25,859
15,115
Gross profit
21,485
14,315
Operating expenses
Selling, general and administrative
18,952
11,487
Depreciation and amortization
1,227
492
Contingent consideration buy-out expense
—
8,732
20,179
20,711
Operating income (loss)
1,306
(6,396
)
Interest expense
3,321
70
Other expense
2,550
—
Loss before provision for taxes
(4,565
)
(6,466
)
Income tax benefit
(2,387
)
(78
)
Net loss and comprehensive loss
$
(2,178
)
$
(6,388
)
Loss per common share - basic
$
(0.03
)
$
(0.10
)
Loss per common share - diluted
$
(0.03
)
$
(0.10
)
Weighted average shares outstanding
Basic
67,938
66,646
Diluted
67,938
66,646
Management Discussion and Analysis
Net Sales
Our overall net sales increased to $47,344,000 for the first quarter of fiscal 2014 from $29,430,000 for the first quarter of fiscal 2013, a 61 percent increase.
More specifically, our wholesale net sales increased to $39,615,000 for the first quarter of fiscal 2014 from $23,087,000 for the first quarter of fiscal 2013, a 72 percent increase. This increase in our wholesale sales is primarily attributed to the addition of $17,285,000 in wholesale sales from Hudson®, a $621,000, or a four percent, increase in Joe’s® women’s wholesale sales, a $244,000, or a four percent, increase in Joe’s® men’s wholesale sales, and a $281,000 increase in Joe’s® international sales. The increases were partially offset by a $1,903,000, or a 98 percent, decline in sales from our else™ brand. We are currently evaluating our distribution channels for our else™ brand as we move beyond our distribution arrangement with Macy’s for this brand. As a result, sales from our else™ brand were negatively impacted by not having an exclusive distribution partner in the first quarter of fiscal 2014 as compared to the first quarter of fiscal 2013.
Our retail net sales increased to $7,729,000 for the first quarter of fiscal 2014 from $6,343,000 for the first quarter of fiscal 2013, a 22 percent increase. The primary reason for this increase was the addition of $1,060,000 in retail sales from Hudson’s® e-shop, as well as the opening of four additional retail stores since the end of the first quarter of fiscal 2013 that contributed to the overall sales increase for this segment. Same store sales, which includes Joe’s® stores opened at least 12 months and our Joe’s® e-shop, decreased by four percent. Same store sales for our brick and mortar Joe’s® stores decreased by 10 percent. Same store sales for our Joe’s® e-shop increased by 50 percent.
Net (Loss) Income and Comprehensive (Loss) Income
We generated a net loss of $2,178,000 for the first quarter of fiscal 2014 compared to a net loss of $6,388,000 for the first quarter of fiscal 2013. Our net loss in the first quarter of fiscal 2014 was primarily due to the amortization of the fair value step up of Hudson’s inventory, additional SG&A expenses and interest costs associated with the debt incurred in connection with the purchase of Hudson and the loss related to the change in value of the embedded conversion derivative from November 30, 2013 to February 28, 2014.
Comments & Business Outlook
JOE'S JEANS INC. AND SUBSIDIARIES
Year ended
November 30, November 30, November 30,
Net sales
$ 140,183 $ 118,642 $ 95,420
Cost of goods sold
77,844 62,472 52,056
Gross profit
62,339 56,170 43,364
Operating expenses
Selling, general and administrative
54,126 43,997 41,617
Depreciation and amortization
2,541 1,456 1,168
Contingent consideration buy-out expense
8,732 — —
Retail stores impairment
— — 1,144
65,399 45,453 43,929
Operating (loss) income
(3,060 ) 10,717 (565 )
Interest expense, net
2,562 376 484
Other expense
209 — —
(Loss) income before taxes
(5,831 ) 10,341 (1,049 )
Income tax provision
1,483 4,776 316
Net (loss) income and comprehensive (loss) income
$ (7,314 ) $ 5,565 $ (1,365 )
(Loss) earnings per common share—basic
$ (0.11 ) $ 0.08 $ (0.02 )
(Loss) earnings per common share—diluted
$ (0.11 ) $ 0.08 $ (0.02 )
Weighted average shares outstanding
Basic
67,163 65,496 64,001
Diluted
67,163 66,849 64,001
Management Discussion and Analysis
During fiscal 2013, we recognized growth through increases in our retail sales, our Joe's® men's domestic sales and the addition of sales from our acquisition of Hudson. We acquired Hudson on September 30, 2013 and our results of operations reflect the consolidation of Hudson as one of our wholly owned subsidiaries from that date through the end of our fiscal year of November 30, 2013, which was approximately two months of operations, and its financial results are included in each of the two reportable segments in a manner consistent with our reporting structure. Therefore, our results of operations for the fiscal year 2013 are not necessarily indicative of future results.
For 2014, we believe that our growth drivers will be dependent upon the integration and addition of sales from our acquisition of Hudson, cost savings resulting from operational benefits or synergies of the two brands, the performance of our retail stores, continued increases from our international and men's sales, performance of our licensee's under their respective agreements for children's products and shoes and enhancement of products available to our customers. Since our retail expansion commenced in 2008, we currently operate 34 retail stores, 14 of which are full price retail stores and 20 of which are outlet stores. During fiscal 2013, we opened an additional six stores, five full price retail stores and one outlet store. We continue to look for additional leases for further expansion, but have no signed leases for store openings in 2014 or beyond.
Our business is seasonal. The majority of the marketing and sales orders take place from late fall to late spring. The greatest volume of shipments and actual sales are generally made from summer through early fall, which coincides with our third and fourth fiscal quarters, and accordingly, our cash flow is strongest in those quarters. Due to the seasonality of our business, as well as the evolution and changes in our business and product mix, including our acquisition of Hudson, our quarterly or yearly results are not necessarily indicative of the results for the next quarter or year. Furthermore, because of the growing number of full-price retail and outlet stores opened at different points during the past few fiscal years, we continue to assess the seasonality of our business on our retail segment and its potential impact on our financial results.
