Shares of Innocap Inc (OTCMKTS: INNO) Soar On Reverse Merger News With Unique Logistics Holdings – Tim Bellamy (10/14/2020)

Today is a mixed day for the markets as the US stock market when it comes to the Nasdaq is down, but a lot of sectors and other markets are up. On the US OTC exchanges shares of Innocap Inc. (OTCMKTS: INNO) are soaring after the company made a filing with the Securities and Exchange Commission detailing a reverse merger. Check out the chart.

The stock has a market cap less than $2 million and has been trading as essentially a shell company for well over a year. It was once a sea exploration company, but that operation became dormant and so did the stock. But another company intending to go public is executing a reverse merger as a means to become a publicly traded company. According to an 8-K filing with the SEC filed yesterday:

“On October 8, 2020 Innocap, Inc. a Nevada corporation (“Innocap” or the “Company”), Inno Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Innocap (“Merger Sub”), Unique Logistics Holdings, Inc., a privately-held Delaware corporation headquartered in New York (“Unique”), entered into an Acquisition Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into Unique, with Unique surviving as a wholly-owned subsidiary of Innocap (the “Merger”). The transaction (the “Closing”) took place on October 8,2020 (the “Closing Date”). The Company acquired, through a reverse triangular merger, all of the outstanding capital stock of Unique in exchange for issuing Unique’s shareholders (the “Unique Shareholders”), pro-rata, an aggregate of 1,000,000 million shares of preferred stock, with certain of unique shareholders receiving   130,000 shares of the Company’s Series A Preferred Stock par value $0.001 per share, and certain of the Unique shareholders receiving of 870,000 shares of the Company’s Series B Preferred Stock, par value $0.001 per share.. Immediately after the Merger was consummated, and further to the Agreement, certain affiliates of the Company cancelled a total of 45,606,489 shares of the Company’s common stock, and 1,000,000 shares of Preferred Stock held by them (the “Cancellation”). In consideration of the Cancellation of such shares of the Company’s common stock and preferred stock, Unique agreed to assume certain liabilities of the Company. As a result of the Merger and the Cancellation, the Unique Shareholders became the majority shareholders of the Company.”

“The directors of Innocap have approved the Agreement and the transactions contemplated under the Agreement. The directors and shareholders of Unique have approved the Agreement and the transactions contemplated thereunder and as of the Closing Date own 1,000,000 shares of Preferred Stock in the aggregate. Such Preferred Stock is convertible into an aggregate of 6,546,470,000 shares of the Company’s common stock, subject to beneficial ownership limitations and authorized capital stock of the Company. On October 9, 2020, the Company’s current Chief Executive Officer, Sunandan Ray, converted 30,000 shares of Series B Preferred Stock into an aggregate of 196,394,100 shares of the Company’s common stock.”

“Simultaneously with the Closing, on October 8, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) pursuant to which the Company sold to such Investor (i) a 10% secured subordinated convertible promissory note in the principal aggregate amount of $1,111,000 (the “The Note”) realizing gross proceeds of $1,000,000 and (ii) a warrant to purchase up to 570,478,452 shares of the Company’s common stock at an exercise price of $0.001946, subject to adjustment as provided therein (the “ Warrant”).”

“The Note matures on December 6, 2021 (the “Maturity Date”) and is convertible at any time. The conversion price shall be equal to the average of the closing prices on the principal market for the ten (10) trading days immediately preceding the date written notice of conversion is provided to the Company, subject to adjustment (the “Conversion Price”); provided, however, that in no instance shall the Holder be entitled to convert at a price lower than $0.00119759 (the “Floor Price”) and in no instance shall the Investor be entitled to convert into such an amount of common stock that, together with all shares of common stock which have been previously converted, would equal greater than 13.8875% of the total issued and outstanding shares of common stock of the Company, subject to adjustment as provided herein, including, but not limited to, adjustments for any stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock during such measuring period. The Conversion Price shall be rounded down to the nearest $0.0001 and in no event lower than $0.00119759.”

This news has helped generate a lot of interest among small cap traders, evident on Twitter posts today:

I do not have a position and am not trading this stock. Neither is Mike Swanson who is the head editor of this website, although he has a big focus on small cap stocks. You can get his top stock pick for this month and his trading updates every morning for free by getting on his email list. Just click here to subscribe.

-Tim



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