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): April 11, 2008
PPOL, INC.
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(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)
1 City Boulevard West, Suite 820, Orange, California 92868
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (714) 937-3211
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 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
Effective April 11, 2008, AJOL Co., Ltd. ("AJOL"), PPOL, Inc.'s (the "Company")
wholly-owned operating subsidiary located in Japan, assigned certain of its
assets relating to its mail order business ("Mail Order Business") to U-World, a
Japanese corporation, also located in Japan. No consideration was paid by
U-World, except that it purchased AJOL's inventory relating to the Mail Order
Business for approximately $270,000 at AJOL's cost.
Yoshihiro Aota, a director of the Company, also has served, since June 2005, as
the representative director (chief executive officer) of U-World. Mr. Aota also
serves as a director of AJOL. Neither Mr. Aota nor any other officer or director
of the Company or AJOL, owns any ownership interest in U-World. Mr. Aota
receives an annual salary as the representative director of U-World.
Masao Yamamoto, the chief executive officer and a director of the Company, also
serves as a director and the chief executive officer of AJOL. Mr. Yamamoto has
also served as a director of U-World since June 2008.
Mr. Yamamoto asserts that AJOL's Mail Order Business division was unprofitable
due to its relatively high fixed costs in relation to revenue generated by the
division. Mr. Yamamoto also asserts that given the nature and scope of AJOL's
Mail Order Business, there was a lack of interest in Japan with respect to
purchasing such business, as well as a lack of entities in Japan capable and
qualified to operate and accept a transfer of AJOL's Mail Order Business, except
for U-World, which possessed a familiarity with the mail order business
generally, and possessed, as well, an existing infrastructure of computers and
personnel. U-World thus agreed to succeed to the assets of AJOL's Mail Order
Business and inventory, thus reducing AJOL's significant overhead costs
(computer, inventory and personnel expenses) and allowing AJOL to transfer a
non-profitable business, without the negative impact of a suspension of that
business. In this regard, a suspension of the Mail Order Business was considered
by AJOL, but reject ed on the belief that any such suspension would have created
a negative impact on AJOL's on-going interactive, online, database subscription
business. Mr. Yamamoto further asserts that the transfer of the Mail Order
Business to U-World now allows AJOL to concentrate on its member online,
interactive, database subscription business, without the burden, costs and
unprofitability of the Mail Order Business.
The Company has initiated an internal investigation of the transaction described
above with respect to the nature and scope of, as well as the facts and
circumstances relating to and arising out of, the transaction, particularly
given the related party nature of the transaction. Appropriate action, if any
should be required, will be undertaken by the Company following the conclusion
of its investigation in this matter. Effective January 20, 2009, the Company
determined, after discussion between the Company's chief financial officer and
the Company's independent accountants, and subject to further disclosure and the
results of the Company's investigation, to caution shareholders and others, at
this time, not to rely on the consolidated financial statements and accompanying
notes to the consolidated financial statements, including the related
disclosures and discussions under Management's Discussion and Analysis contained
in the Company's Form 10-K for the fiscal year ended March 31, 2007, which was
filed with the Securities and Exchange Commission on October 16, 2008. The
Company's determination was based on management's representation that certain of
AJOL's assets were sold to U-World. All matters disclosed in this filing were
discussed with the Company's independent accountants. Moreover, there will be a
further delay in the filing of the Company's Form 10-K for the fiscal year ended
March 31, 2008, and Forms 10-Q for the three (3) quarters prior thereto and the
three (3) quarters subsequent thereto pending completion of the aforementioned
investigation, and corrective action, if any is required, relating thereto.
While the final appropriate course of action cannot be determined until the
investigation of the transaction described above has been completed, management
of the Company believes the appropriate course of action will include, but not
be limited to, the filing of an amended Form 10-K for the fiscal year ended
March 31, 2007, to restate the related Form 10-K to reflect the transaction
noted above as a previously undisclosed subsequent event, including disclosure
for the transaction in the notes to the consolidated financial statements and
revised discussion and disclosures under Management's Discussion and Analysis,
contained therein. At this time, we are not aware of any material impact this
may have on the classification of certain assets, liabilities, revenues, expense
or net loss, previously reported in our Form 10-K for the fiscal year ended
March 31, 2007. However, there can be no assurance that the results of our
investigation may or may not result in certain restatements to previously
reported assets, liabilities, revenues, expenses or net loss for the year ended
March 31, 20 07. Finally, the Company's annual meeting of shareholders, planned
for February 10, 2009, in Tokyo, Japan, has been postponed pending the
completion of the matters discussed above.
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: February 25, 2009
PPOL, INC.
By: /s/ Richard H. Izumi
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Richard H. Izumi,
Chief Financial Officer and Secretary