UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 2005
PPOL,INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 000-50065 95-4436774
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification Number)
organization)
11661 San Vicente Blvd, Suite 901 90049
Los Angeles, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 979-8513
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective March 31, 2005 (the "Effective Date"), Registrant entered into a
Purchase Agreement (the "Purchase Agreement") with Forval Corporation
("Forval"), which at the time of the Effective Date owned approximately
10,547,594 shares of common stock of Registrant, representing approximately
58.62% of Registrant's issued and outstanding common stock. Forval's Chief
Executive Officer ("CEO"), Hideo Ohkubo, also served as the CEO and Chairman of
the Board of Registrant at the time of the Effective Date of the Purchase
Agreement.
The Purchase Agreement recited that Registrant was the owner of 30,000 shares
(the "Gatefor Shares") of the common stock of Gatefor, Inc., a Japan joint stock
company ("Gatefor"), representing 100% of the issued and outstanding common
stock of Gatefor. The Purchase Agreement also recited that Registrant was the
owner of 1,500 shares (the "OI Shares") of common stock of Object Innovation,
Inc., a Florida corporation ("OI").
Additionally, the Purchase Agreement recited that Registrant and OI were parties
to a certain Exclusive Distribution Agreement, dated May 26, 2004 (the
"Exclusive Distribution Agreement), which agreement Registrant assigned (the
"Assignment") to Gatefor pursuant to that certain Exclusive Distribution Right
License Agreement (the "Distribution Right License Agreement"), dated October 1,
2004, between Registrant and Gatefor. In connection with the Assignment, OI and
Gatefor entered into a revised letter of understanding, dated August 11, 2004
(the "Revised Letter of Understanding"), providing for, among other things, OI's
right to purchase 5% of the equity of Gatefor and certain payments to be made by
Gatefor to OI.
In furtherance of the Purchase Agreement, Registrant sold to Forval the Gatefor
Shares and the OI Shares, and assigned to Forval Registrant's receivable from
Gatefor (the "Gatefor Receivable") in the principal amount of JPY176,662,500,
plus accrued interest. The Purchase Agreement valued the Gatefor Shares at
JPY150,000,000, and the OI Shares at JPY30,000,000.
In connection with Forval's acquisition of the Gatefor Shares, OI Shares and
Gatefor Receivable, Forval cancelled Registrant's debt to Forval in the
principal amount of JPY340,000,000 plus accrued interest, and further paid
Registrant JPY15,331,762. As further consideration in the transaction,
Registrant assigned to Forval all of Registrant's right, title and interest in
and to, and Forval assumed all obligations under, the Exclusive Distribution
Agreement and the Distribution Right License Agreement, except that the payment
of JPY100,000,000 previously made by Gatefor to Registrant pursuant to the
Distribution Right License Agreement was deemed non-refundable, thus allowing
Registrant to retain such payment upon expiration of the Distribution Right
License Agreement on September 30, 2007.
A Special Committee (the "Committee") of independent directors of Registrant's
Board of Directors was formed to review the terms and conditions of the Purchase
Agreement. The Committee approved Registrant's execution, delivery and
performance of the Purchase Agreement.
Copies of the Purchase Agreement, Exclusive Distribution Agreement, Distribution
Right License Agreement and Revised Letter of Understanding are attached hereto
as Exhibits 10.11, 10.12, 10.13 and 10.14, respectively.
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
On April 4, 2005, PPOL, Inc. ("PPOL" or "Registrant") announced the completion
of a definitive agreement under which Foster Strategic Investment Partnership
acquired 10,547,594 shares of PPOL from Forval Corporation, representing 58.6%
of PPOL's outstanding shares for $8,370,000 (900,000,000 Japanese Yen). A
translation of the Stock Purchase Agreement, originally executed in Japanese,
dated March 31, 2005 is attached hereto as Exhibit 99.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
Effective March 31, 2005, Hideo Ohkubo, Robert Brasch, Lowell Hattori, Naota
Hamaguchi and Yoshikazu Ohashi resigned as members of the Board of Directors and
committees of the Registrant. The resignations were tendered in connection with
the sale of all the shares of common stock of Registrant owned by Forval
Corporation to Foster Strategic Investment Partnership, as more fully disclosed
elsewhere in this Form 8-K. Additionally, effective March 31, 2005, Ohkubo and
Toshiaki Shimojo resigned as CEO and CFO, respectively, of Registrant. In
connection with the resignations of Messrs. Brasch and Hattori, each was paid
$15,000 and retained their options to purchase 40,000 shares to purchase common
stock of Registrant at $4.00 per share, expiring in 2014. Messrs. Ohkubo,
Hamaguchi and Ohashi waived their rights to any cash compensation and stock
options.
New PPOL Directors were named, and include Hisao Inoue (54) as Chairman, and
Masao Yamamoto (55) and Richard H. Izumi (51). In addition, PPOL has named Mr.
Inoue as Chief Executive Officer, Mr. Yamamoto as Chief Operating Officer and
Mr. Izumi as Chief Financial Officer and Secretary.
Mr. Hisao Inoue is currently President of HI Consultant, Inc., a financial,
sales and marketing, and retailing consulting firm, and is President of
Seventy-nine Partners, Inc., a consultancy that includes market research and
analysis, U.S.-Japan financing, government relations and human resources.
Previously Mr. Inoue held various financial, IT and customer relations positions
at American Express International. Mr. Inoue received a BS in Management from
Aoyama Gakuin University.
Mr. Masao Yamamoto is currently Chief Executive Officer of AJOL Co. Ltd., PPOL's
wholly owned subsidiary, where he previously served as General Manager of
Finance and Director. Prior to joining AJOL he was General Manager of accounting
with Chiiki Shinko Kyouiku Jigyo Foundation. Mr. Yamamoto graduated from the
Koganei Industrial School, with a major in Electronics.
Mr. Richard Izumi is currently Senior Managing Director of JGS Co. Ltd, a
Japanese company primarily involved in the licensing of energy and high-tech
related intellectual property. Previously he was an independent consultant to
public companies, including the registrant, on financial matters and
international transactions, primarily between U.S. and Japan. Earlier he served
as Partner at accounting firms Ernst & Young and Price Waterhouse(now known as
PricewaterhouseCoopers). Mr. Izumi holds a B.S. in Business Administration from
the University of Southern California.
* * *
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 4, 2005
PPOL, Inc.
By: /s/ Richard Izumi
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Richard Izumi
Chief Financial Officer and Secretary