UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14f-1
INFORMATION SATEMENT
PURSUANT TO SECTION 14(f) OF
THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 PROMULGATED THEREUNDER
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PPOL, INC.
(Exact name of Registrant as specified in its charter)
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CALIFORNIA 95-44336774
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
000-50065
(Commission File Number)
11661 SAN VICENTE BLVD., SUITE 901
LOS ANGELES, CALIFORNIA
90049
(Address, including zip code, of principal
executive office)
(310) 979-8513
(Registrant's telephone number, including area code)
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PPOL, INC.
INFORMATION STATEMENT
PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
This Information Statement is being furnished to holders of the outstanding
shares of common stock, $0.001 par value, of PPOL, Inc., a California
corporation ("PPOL" or the "Company"), in connection with the previously
announced agreement, effective March 31, 2005, under which Foster Strategic
Investment Partnership acquired 10,547,594 shares of common stock of PPOL from
Forval Corporation, which represented all of Forval's holdings of PPOL and 58.6%
of PPOL's outstanding shares. The transaction resulted in a change in the entire
Board of Directors and executive officers of PPOL.
This Information Statement is being furnished pursuant to Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder. IT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY, AND NO
VOTE OR OTHER ACTION BY OUR SHAREHOLDERS IS REQUIRED TO BE TAKEN IN CONNECTION
WITH THIS INFORMATION STATEMENT.
INFORMATION REGARDING THE CHANGE OF CONTROL TRANSACTION
As previously announced, on March 31, 2005, Foster Strategic Investment
Partnership acquired 10,547,594 shares of PPOL's common stock from Forval
Corporation, which represented all of Forval's holdings in PPOL and 58.6% of
PPOL's outstanding shares for $8,370,000 (900,000,000 Japanese Yen). A
translation of the Stock Purchase Agreement between Foster Strategic Investment
Partnership and Forval Corporation, originally executed in Japanese, dated March
31, 2005, is attached as Exhibit 99 to PPOL's Form 8-K filed on April 4, 2005
("Stock Purchase Agreement"). At the time of the effective date of the Stock
Purchase Agreement, Forval's Chief Executive Officer ("CEO"), Hideo Ohkubo, also
served as the CEO and Chairman of the Board of PPOL.
Pursuant to the terms of the Stock Purchase Agreement, PPOL's directors as of
March 31, 2005, Hideo Ohkubo, Robert Brasch, Lowell Hattori, Naota Hamaguchi and
Yoshikazu Ohashi, resigned as members of the Board of Directors, and they were
replaced by the following three (3) new directors: Hisao Inoue as Chairman,
Masao Yamamoto and Richard H. Izumi.
Also effective March 31, 2005, PPOL entered into a Purchase Agreement (the
"Purchase Agreement") with Forval Corporation, which recited that PPOL 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 PPOL 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 PPOL and OI were parties to a
certain Exclusive Distribution Agreement, dated May 26, 2004 (the "Exclusive
Distribution Agreement), which agreement PPOL assigned (the "Assignment") to
Gatefor pursuant to that certain Exclusive Distribution Right License Agreement
(the "Distribution Right License Agreement"), dated October 1, 2004, between
PPOL 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, PPOL sold to Forval the Gatefor Shares
and the OI Shares, and assigned to Forval PPOL'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 PPOL's debt to Forval in the principal
amount of JPY340,000,000 plus accrued interest, and further paid PPOL
JPY15,331,762. As further consideration in the transaction, PPOL assigned to
Forval all of PPOL'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 PPOL pursuant to the Distribution Right License Agreement was
deemed non-refundable, thus allowing PPOL to retain such payment upon expiration
of the Distribution Right License Agreement on September 30, 2007.
A Special Committee of independent directors of PPOL's Board of Directors was
formed to review the terms and conditions of the Purchase Agreement. The Special
Committee approved PPOL'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 as
Exhibits 10.11, 10.12, 10.13 and 10.14, respectively, to PPOL's Form 8-K filed
on April 4, 2005
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND NEW MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our Common Stock, at April 1, 2005, for: (i) each person
who we know beneficially owns more than 5% of our Common Stock; (ii) each of our
directors; (iii) each of our named executive officers; and (iv) all of our
directors and executive officers as a group. On April 1, 2005, there were
17,993,752 shares of common stock issued and outstanding.
Unless otherwise noted below, the address of each beneficial owner listed in the
table is c/o PPOL, Inc., 11661 San Vicente Blvd.,
Suite 901, Los Angeles, California 90049
We have determined beneficial ownership in accordance with the rules of the SEC.
Except as indicated by the footnotes below, we believe, based on the information
furnished to us, that the persons and entities named in the table below have
sole voting and investment power with respect to all shares of common stock that
they beneficially own, subject to applicable community property laws. Beneficial
ownership representing less than 1% is denoted with an "*."
NAME AND ADDRESS OF TITLE OF NUMBER OF SHARES(1) PERCENT OF CLASS
BENEFICIAL OWNER CLASS STOCK
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5% SHAREHOLDERS
Foster Strategic Investment
Partnership(2) Common Stock 10,547,594 58.6%
[c/o ING Asia Private Bank Limited 9
Raffles Place #09-01, Republic Plaza
Singapore 048619]
Leo Global Fund(3) Common Stock 6,436,080 35.8%
Mori Bldg, 3F Toranomon 11
6-4 Toranomon, 2-Chome
Minato-Ku, Tokyo, Japan 105-0001
DIRECTORS AND EXECUTIVE OFFICERS
Hisao Inoue Common Stock 0 ---
Masao Yamamoto Common Stock 0 ---
Richard H. Izumi(4) Common Stock 24,489 *
Directors and Executive Officers as a Common Stock 24,489 *
group ([3] persons)
* Represents beneficial ownership of 17,993,752 100%
less than 1% of the outstanding
shares of common stock.
(1) Includes shares of common stock issuable upon the exercise of options,
which, as of March 31, 2005 were unexercised but were exercisable within a
period of 60 days from that date. These amounts include the following number of
shares of common stock for the following individuals:
(2) Mr. Shigeru Uemura, the chief executive officer of Foster Strategic
Investment Partnership, has the power to vote Foster Strategic Investment
Partnership 's ownership of shares in the Company. The majority owner Foster
Strategic Investment Partnership is Green Capital Co., Ltd..
(3) Mr. Nobuo Takada, the chief executive officer of Leo Global Fund, has the
power to vote Leo Global Fund's ownership of shares in the Company. The majority
owner of Leo Global Fund is AJOO, a leading distributor of AJOL.
(4) Includes 24,489 shares of Common Stock held by NApollo, Inc.
FORMER DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE FORMER POSITION
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Hideo Ohkubo 49 Chief Executive Officer and Chairman of
the Board
Toshiaki Shimojo 57 Chief Financial Officer
Robert Brasch 66 Director
Naota Hamaguchi 44 Director
Lowell Hattori 66 Director
Yoshikazu Ohashi 63 Director
NEW DIRECTORS AND EXECUTIVE OFFICERS
As of March 31, 2005, our executive officers, significant employees and
directors, and their ages and positions, are as follows:
NAME AGE POSITION
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Hisao Inoue 54 Chief Executive Officer and Chairman of the
Board
Richard H. Izumi 51 Chief Financial Officer and Director
Masao Yamamoto 55 Chief Operating Officer and Director
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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.
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 PPOL, 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.
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.
BOARD OF DIRECTORS AND COMMITTEES
The new Board of Directors has not appointed a standing audit, nominating or
compensation committee, but it intends to create each of these committees of the
new Board and to adopt charters for each. Until the Board of Directors creates
these committees, the entire Board will perform the functions of each of these
committees.
The Board of Directors anticipates that the responsibilities of its audit
committee will include: (i) selecting and evaluating the performance of our
independent auditors, (ii) reviewing the scope of the audit to be conducted by
the independent auditors, as well as the results of their audit, and approving
audit and non-audit services to be provided to PPOL by them, (iii) reviewing the
organization and scope of PPOL's internal system of financial reporting
controls, (iv) reviewing and assessing PPOL's reporting activities, including
PPOL's annual report, and the accounting standards and principles followed, (v)
approving related-party transactions, and (vi) overseeing PPOL's code of ethics
and whistleblower protections.
The Board anticipates that the responsibilities of its compensation committee
will include: (i) reviewing and approving corporate performance goals and
objectives relevant to the compensation of PPOL's executive officers, (ii)
evaluating and recommending to the Board of Directors compensation plans and
programs for PPOL, as well as modifying or terminating existing plans and
programs, (iii) reviewing and approving compensation and benefits for directors
and the executive officers, and making recommendations to the Board of Directors
regarding these matters, and (iv) authorizing and approving equity grants under
PPOL's equity compensation plans.
The Board anticipates that it will create a corporate governance and nominating
committee, the responsibilities of which committee will include: (i)
recommending guidelines to the Board of Directors for the governance of PPOL,
including the structure and function of the Board of Directors and its
committees and management, (ii) identifying, evaluating, reviewing and
recommending to the Board of Directors qualified candidates to serve on the
Board of Directors, (iii) making recommendations to the Board of Directors
regarding the election of officers, and (iv) reviewing and assessing the
performance of the Board of Directors and each of its committees.
Until the Board of Directors creates a corporate governance and nominating
committee, the Board will consider director candidates recommended by our
stockholders. A stockholder who wishes to recommend a candidate for the Board's
consideration should forward the candidate's name and information about the
candidate's qualifications to Corporate Secretary, PPOL, Inc., 11661 San Vicente
Blvd., Suite 901, Los Angeles, California 90049. Submissions must include a
representation that the nominating stockholder is a beneficial owner or record
owner of PPOL common stock. Any such submission must be accompanied by the
written consent of the proposed nominee to be named as a nominee and to serve as
a director if elected.
PPOL has a process by which stockholders may communicate with the Board of
Directors or any of our directors or officers. Stockholders who wish to
communicate with the Board of Directors or any of our directors or officers may
do so by sending written communications addressed to such person or persons in
care of Corporate Secretary, PPOL, Inc., 11661 San Vicente Blvd., Suite 901, Los
Angeles, California 90049. All such communications will be compiled by our
Corporate Secretary and submitted to the addressees on a periodic basis.
EMPLOYMENT AGREEMENTS AND EXECUTIVE COMPENSATION OF NEW EXECUTIVE OFFICERS
PPOL does not yet have employment agreements with its newly appointed officers.
DIRECTOR COMPENSATION
PPOL does not yet have compensation arrangements with our directors. We
anticipate that we will compensate our non-employee director with a fee for each
Board meeting and each committee meeting attended. We also intend to reimburse
certain expenses incurred by the directors. We also anticipate that non-employee
directors may be granted options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND STOCKHOLDERS HOLDING MORE THAN 5% OF OUR
OUTSTANDING COMMON STOCK
Richard Izumi is the founder and principal owner of ECO2, LLC, a consulting firm
that was engaged by PPOL until December 24, 2004 to consult PPOL on U.S.
corporate and financial matters, including assisting PPOL in preparing reports
filed with the U.S. Securities and Exchange Commission. During fiscal years 2004
and 2003, PPOL paid ECO2, LLC $224,000 and $345,000, respectively.
INDEMNIFICATION AGREEMENTS
PPOL intends to enter into indemnification agreements with each of its directors
and executive officers. These agreements will require PPOL to indemnify these
individuals to the fullest extent permitted under California law against
liabilities that may arise by reason of their service to the Company, and to
advance expenses incurred as a result of any proceeding against them as to which
they could be indemnified. PPOL also intends to enter into indemnification
agreements with its future directors and executive officers.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the PPOL has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
PPOL, INC.
By: /s/ RICHARD H. IZUMI
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RICHARD H. IZUMI
CHIEF FINANCIAL OFFICER AND SECRETARY
Dated: April 18, 2004