Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-42766
INNOVACOM INC.
Prospectus Supplement No. 7
(To Prospectus Dated August 30, 2000)
This supplement number 7 supercedes and replaces supplements numbers 1
through 6. You should read this prospectus supplement number 7 and the related
prospectus dated August 30, 2000, carefully before you invest. These documents
contain information you should consider when making your investment decision.
On December 21, 2000, we requested our fourth draw down to Jashell
Investments Limited in connection with the common stock purchase agreement dated
June 19, 2000, as amended on July 26, 2000, evidencing an equity draw down
facility between us and Jashell Investments Limited. The draw down began on
December 21, 2000, ended on January 10, 2001, and settled on January 12, 2001.
During this period, Jashell Investments Limited purchased a total of 4,482,909
shares of our common stock at an average purchase price of $0.0692 per share
which represents 79% of the Volume Weighted Average Daily Price of our common
stock as quoted on the OTC Bulletin Board during that period of $0.0876 per
share. These purchases resulted in aggregate proceeds of $250,000 being paid to
us by Jashell Investments Limited. In addition, we paid Jashell Investments
Limited an additional $33,333, as part of the draw down pursuant to the common
stock purchase agreement. In connection with our December 21, 2000, draw down
notice, we indicated no threshold price.
Prior to our fourth draw down, we had three prior draw downs with Jashell
Investments Limited which can be summarized as follows:
Draw Down Gross Proceeds Shares Issued Average Purchase Price
--------- -------------- ------------- ----------------------
1A $375,000 1,185,471 $0.3163
1B $188,418 760,000 $0.2479
2A $109,091 498,227 $0.2190
2B $200,000 1,225,698 $0.1632
3A $251,461 2,330,710 $0.1079
3B $300,000 3,783,394 $0.0793
2
Each draw down was divided into two tranches. Pursuant to the common stock
purchase agreement, for the first six draw downs, we will pay or have paid
Jashell Investments Limited a fee of $33,333 from the proceeds of the first
tranche of each draw down. Further during the first draw down, and the first
tranche of the second drawn, we indicated a threshold price of $0.25 per share.
Since the second tranche of the second drawn down, we have indicated no
threshold price.
The shares issued in connection with the three prior draw downs include
shares that were acquired upon the exercise of warrants. Under the terms of the
common stock purchase agreement with Jashell Investments Limited, in connection
with each drawn down, Jashaell Investments Limited has the right to request a
warrant to purchase up to one-half of the number of shares of common stock
issued in such draw down at an exercise price equal to the average purchase
price of the common stock issued in the draw down. The term of the warrant is
for a 22 business day period. As of the date of this supplement, all outstanding
warrants issued in connection with the prior draw downs have been either
exercised in whole or in part or expired. No warrants were issued in connection
with the fourth draw down.
The attached prospectus relates to the resale of shares acquired by Jashell
Investments Limited pursuant to the stock purchase agreement and pursuant to the
exercise of warrants held by Jashell Investments Limited. Because Jashell
Investments Limited may sell some or all of these shares, and because there are
currently no agreements, arrangements or understandings with respect to the sale
of any of these shares, we cannot estimate the actual amount of shares that they
will hold, if any, after the completion of the offering.
The proceeds from the sale of common stock issued to the Jashell
Investments Limited will be used for working capital. Although we have received
cash from the sale of our products and from the settlement of litigation, our
operations have been primarily financed from the sale of our common stock
pursuant to the common stock purchase agreement. As disclosed in the prospectus,
the sale of the common stock has had a substantial dilutive effect on our
existing shareholders. Until we achieve sufficient sales of our products to
finance our operations, which we do not anticipate in the near future, we will
need additional financing for our operations. In the past, we have relied on
borrowings, and more recently the sale of our common stock pursuant to the
common stock purchase agreement, to finance our operations. We are continuing to
review all strategic alternatives available to us.
In September 2000, Mr. Robert Sibthorpe and, in a letter dated December 8,
2000, Mr. John Champlin, resigned from the board. Our board of directors
currently consists of Messrs. Alioto, Casey, Low and Koz. At this time, we are
focusing our efforts on business and do not intend to seek replacement directors
in the near future.
The date of this prospectus supplement is January 12, 2001.