1
As filed with the Securities and Exchange Commission on July 21,
2003.
Registration No. 333-52318
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO FORM S-1 ON FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INNOVO GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2928178
(State of other jurisdiction (IRS Employer Identi-
of incorporation or organization) fication Number)
5900 S. Eastern Avenue, Suite 120
Commerce, California 90040
(323) 725-5516
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Samuel J. Furrow, Jr.
INNOVO GROUP INC.
5900 S. Eastern Avenue, Suite 120
Commerce, California 90040
(323) 725-5516
(Address, including zip code, and telephone number, including area
code, of agent for service)
With copies to:
Gilbert H. Davis, Esq.
Sims Moss Kline & Davis LLP
Suite 1700,Three Ravinia Drive
Atlanta, Georgia 30346
(770) 481-7200
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
INNOVO GROUP INC.
Common Stock
10,031,250 Shares Offered by Selling Stockholders
- The shares of common stock offered by this prospectus are
being sold by the stockholders listed on pages 8 and 9 of
this prospectus. The company will not receive any
proceeds from the sale of these shares.
- Our common stock is traded on the Nasdaq SmallCap Market
under the symbol INNO.
- The shares will be sold by the respective selling
stockholders in one or more sales through the Nasdaq
SmallCap Market, any other market on which our common
stock is traded at the time of the sale, or in
individually negotiated transactions.
- On July 15, 2003, the last sale price of our common stock
on the Nasdaq SmallCap Market was $5.15. You should obtain
a current market price quotation before you buy any of the
offered shares.
Our principal executive offices are located at 5900 S. Eastern
Avenue, Suite 120, Commerce, California 90040. Our telephone number
is (323) 725-5516.
--------------------------------------------------
The securities offered by this prospectus involve a high degree of
risk. You should carefully consider the factors described under the
heading "Risk Factors" beginning on page 2 of this prospectus.
--------------------------------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities
or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
--------------------------------------------------
July 21, 2003
TABLE OF CONTENTS
Page
Risk Factors 2
Forward-Looking Statements 9
Use of Proceeds 9
Dividend Policy 9
Selling Stockholders 13
Plan of Distribution 16
Description of Securities 14
Where You Can Find More Information 16
Experts 17
Cautionary Statements 17
RISK FACTORS
This offering involves a high degree of risk, including those
risks described below. You should carefully consider these risk
factors, together with all of the other information in this
prospectus, before deciding to invest in shares of our common stock.
We may not be able to finance the production of inventory to
satisfy the seasonal demand for our products.
While the Company believes that as a result of its growing
product lines and expanding business model its business should be
less seasonal in future periods, a majority of the Company's
revenues are generated during the Company's third and fourth
quarters. In the second quarter in order to prepare for peak sales
that occur during the third quarter, the Company builds inventory
levels, which results in higher liquidity needs as compared to the
other quarters in the fiscal year.
If we overestimate the seasonal demand for our products, we may
incur substantial expenses that could cause or increase net losses,
while underestimating demand may result in the loss of sales
opportunities. If sales were materially different from seasonal
norms during the third quarter, the Company's annual operating
results could be materially affected. There are no assurances that
the effects of such seasonality will diminish in the future.
The Company could be required to constrict or stop operations
if it is unable to raise or obtain additional working capital.
The Company is anticipating a significant increase in organic
growth during 2003 and believes that it could be necessary to obtain
additional working capital in order to meet the operational needs
associated with such growth. The Company believes that it will
address these needs by increasing the availability of funds
offered to the Company under its financing agreements with CIT
Group, Inc. ("CIT") or other financial institutions. Nonetheless,
the Company may be required to obtain additional capital through
debt or equity financing. However, there can be no assurance that
this or other financing will be available if needed. The inability
of the Company to be able to fulfill any interim working capital
requirements would force the Company to constrict its operations.
The Company's cash requirements to run its business have been
and will continue to be significant.
Although the Company experienced approximately $1,500,000 in
positive cash flow from operating activities in fiscal year ended
December 1, 2002, it had, as of March 1, 2003, an accumulated
deficit of approximately $33.3 million and had experienced negative
operating cash flow and losses from continuing operations from 1997
through fiscal 2001, as follows:
Negative Cash Flow
from Operating Losses from
Activities of Continuing
Fiscal year ended: Continuing Operations Operations
December 1, 2001 $ 632,000 $ 618,000
November 30, 2000 $4,598,000 $6,151,000
November 30, 1999 $2,124,000 $1,340,000
November 30, 1998 $1,238,000 $2,267,000
November 30, 1997 $1,339,000 $1,729,000
Although the Company has undertaken numerous measures to increase
sales and operate more efficiently, the Company may experience
further losses and negative cash flows. We can give you no
assurance that the Company will in fact operate profitably in the
future.
The loss of the services of key personnel could have a material
adverse effect on our business.
Our executive officers have substantial experience and
expertise in our business and have made significant contributions to
our growth and success. The unexpected loss of services of one or
more of these individuals could also adversely affect us. We are
currently not protected by a material amount of key-man or similar
life insurance covering any of our executive officers.
A substantial portion of our net sales and gross profit is
derived from a small number of large customers.
Our ten largest customers accounted for approximately 52% of
our gross sales during fiscal 2002. We do not enter into long-term
agreements with any of our customers. Instead, we enter into a
number of individual purchase order commitments with our customers.
A decision by the controlling owner of a group of stores or any
other significant customer, whether motivated by competitive
conditions, financial difficulties or otherwise, to decrease the
amount of merchandise purchased from us, or to change their manner
of doing business with us, could have a material adverse effect on
our financial condition and results of operations.
The Company's business could be negatively impacted by the
financial instability of our customers.
We sell our product primarily to retail, private label and
distribution companies around the world based on pre-qualified
payment terms. Financial difficulties of a customer could cause us
to curtail business with that customer. We may also assume more
credit risk relating to that customer's receivables. Our inability
to collect on our trade accounts receivable from any one of these
customers could have a material adverse effect on our business or
financial condition.
Our business could suffer as a result of manufacturer's
inability to produce our goods on time and to our specifications.
We do not own or operate any manufacturing facilities and
therefore depend upon independent third parties for the manufacture
of all of our products. Our products are manufactured to our
specifications by both domestic and international manufacturers.
During fiscal 2002, approximately 24%, of our products were
manufactured in the United States and approximately 76% of our
products were manufactured in foreign countries. The inability of a
manufacturer to ship orders of our products in a timely manner or to
meet our quality standards could cause us to miss the delivery date
requirements of our customers for those items, which could result in
cancellation of orders, refusal to accept deliveries or a reduction
in purchase prices, any of which could have a material adverse
effect on our financial condition and results of operations.
The loss of the services of Mr. Joe Dahan could have a
material adverse effect on Joe's business.
Mr. Joe Dahan's leadership in the design, marketing and
operational areas of Joe's has been a critical element of Joe's
success. The loss of his services, or any negative market or
industry perception arising from his loss, could have a material
adverse effect on our business. We are currently not protected by a
material amount of key-man or similar life insurance covering Mr.
Dahan or any of our other executive officers. We have entered into
employment agreements with Mr. Dahan. See "Business-Executive
Officers."
Our business could suffer if we need to replace manufacturers.
We compete with other companies for the production capacity of
our manufacturers and import quota capacity. Some of these
competitors have greater financial and other resources than we have,
and thus may have an advantage in the competition for production and
import quota capacity. If we experience a significant increase in
demand, or if an existing manufacturer of ours must be replaced, we
may have to expand our third-party manufacturing capacity. We
cannot assure you that this additional capacity will be available
when required on terms that are acceptable to us. We enter into a
number of purchase order commitments each season specifying a time
for delivery, method of payment, design and quality specifications
and other standard industry provisions, but do not have long-term
contracts with any manufacturer. None of the manufacturers we use
produces our products exclusively.
If a manufacturer of ours fails to use acceptable labor
practices, our business could suffer.
We require our independent manufacturers to operate in
compliance with applicable laws and regulations. While our internal
and vendor operating guidelines promote ethical business practices
and our staff periodically visits and monitors the operations of our
independent manufacturers, we do not control these manufacturers or
their labor practices. The violation of labor or other laws by an
independent manufacturer of ours, or by one of our licensing
partners, or the divergence of an independent manufacturer's or
licensing partner's labor practices from those generally accepted as
ethical in the United States, could interrupt, or otherwise disrupt
the shipment of finished products to us or damage our reputation.
Any of these, in turn, could have a material adverse effect on our
financial condition and results of operations.
Our trademark and other intellectual property rights may not be
adequately protected outside the United States.
We believe that our trademarks, whether licensed or owned by
us, and other proprietary rights are important to our success and
our competitive position. In the course of our international
expansion, we may, however, experience conflict with various third
parties who acquire or claim ownership rights in certain trademarks.
We cannot assure that the actions we have taken to establish and
protect these trademarks and other proprietary rights will be
adequate to prevent imitation of our products by others or to
prevent others from seeking to block sales of our products as a
violation of the trademarks and proprietary rights of others. Also,
we cannot assure you that others will not assert rights in, or
ownership of, trademarks and other proprietary rights of ours or
that we will be able to successfully resolve these types of
conflicts to our satisfaction. In addition, the laws of certain
foreign countries may not protect proprietary rights to the same
extent as do the laws of the United States. See "Business -
Licensing Agreement and Intellectual Property."
We cannot assure the successful implementation of our growth
strategy.
As part of our growth strategy, we seek to expand our
geographic coverage, strategically acquiring select licensees and
enhancing our operations. We may have difficulty hiring and
retaining qualified key employees or otherwise successfully managing
the required expansion of our infrastructure in Japan and other
international markets the Company may enter into. Furthermore, we
cannot assure you that we will be able to successfully integrate the
business of any licensee that we acquire into our own business or
achieve any expected cost savings or synergies from such
integration.
Our business is exposed to domestic and foreign currency
fluctuations.
We generally purchase our products in U.S. dollars. However, we
source most of our products overseas and, as such, the cost of these
products may be affected by changes in the value of the relevant
currencies. Changes in currency exchange rates may also affect the
relative prices at which we and our foreign competitors sell
products in the same market. We currently do not hedge our exposure
to changes in foreign currency exchange rates. We cannot assure
you that foreign currency fluctuations will not have a material
adverse impact on our financial condition and results of operations.
Our ability to conduct business in international markets may be
affected by legal, regulatory, political and economic risks.
Our ability to capitalize on growth in new international
markets and to maintain the current level of operations in our
existing international markets is subject to risks associated with
international operations. These include:
- the burdens of complying with a variety of foreign laws and
regulations,
- unexpected changes in regulatory requirements, and
- new tariffs or other barriers to some international markets.
We are also subject to general political and economic risks
associated with conducting international business, including:
- political instability,
- changes in diplomatic and trade relationships, and
- general economic fluctuations in specific countries or
markets.
We cannot predict whether quotas, duties, taxes, or other
similar restrictions will be imposed by the United States, the
European Union, China, Japan, or other countries upon the import or
export of our products in the future, or what effect any of these
actions would have on our business, financial condition or results
of operations. Changes in regulatory, geopolitical policies and
other factors may adversely affect our business in the future or may
require us to modify our current business practices.
We face intense competition in the worldwide apparel and
accessory industry.
We face a variety of competitive challenges from other domestic
and foreign fashion-oriented apparel and accessory producers, some
of which may be significantly larger and more diversified and have
greater financial and marketing resources than we have. We compete
with these companies primarily on the basis of:
- anticipating and responding to changing consumer demands in a
timely manner,
- maintaining favorable brand recognition,
- developing innovative, high-quality products in sizes, colors
and styles that appeal to consumers,
- appropriately pricing products,
- providing strong and effective marketing support,
- creating an acceptable value proposition for retail
customers,
- ensuring product availability and optimizing supply chain
efficiencies with manufacturers and retailers, and
- obtaining sufficient retail floor space and effective
presentation of our products at retail.
The success of our business depends on our ability to respond
to constantly changing fashion trends and consumer demands.
Our success depends in large part on our ability to originate
and define fashion product trends, as well as to anticipate, gauge
and react to changing consumer demands in a timely manner. Our
products must appeal to a broad range of consumers whose preferences
cannot be predicted with certainty and are subject to rapid change.
We cannot assure that we will be able to continue to develop
appealing styles or successfully meet constantly changing consumer
demands in the future. In addition, we cannot assure you that any
new products or brands that we introduce will be successfully
received by consumers. Any failure on our part to anticipate,
identify and respond effectively to changing consumer demands and
fashion trends could adversely the acceptance of our products and
leave us with a substantial amount of unsold inventory or missed
opportunities. If that occurs, we may be forced to rely on markdowns
or promotional sales to dispose of excess, slow-moving inventory,
which may harm our business. At the same time, our focus on tight
management of inventory may result, from time to time, in our not
having an adequate supply of products to meet consumer demand and
cause us to lose sales.
A downturn in the economy may affect consumer purchases of
discretionary items, which could adversely affect our sales.
The industries in which we operate are cyclical. Many factors
affect the level of consumer spending in the apparel, accessories
and craft industries, including, among others:
- general business conditions,
- interest rates,
- the availability of consumer credit,
- taxation, and
- consumer confidence in future economic conditions.
Consumer purchases of discretionary items, including accessory
and apparel products, including our products, may decline during
recessionary periods and also may decline at other times when
disposable income is lower. A downturn in the economies in which we
sell our products, whether in the United States or abroad, may
adversely affect our sales.
Our business could suffer as a result of consolidation,
restructurings and other ownership changes in the retail industry.
In recent years, the retail industry has experienced
consolidation and other ownership changes. Some of our customers
have operated under the protection of the federal bankruptcy laws.
While to date these changes in the retail industry have not had a
material adverse effect on our business or financial condition, our
business could be materially affected by these changes in the
future.
If We Cannot Meet the Nasdaq SmallCap Market Maintenance
Requirements and Nasdaq Rules, Nasdaq May Delist the Common Stock
Which Could Negatively Affect the Price of the Common Stock and Your
Ability to Sell the Common Stock
In the future, we may not be able to meet the listing
maintenance requirements of the Nasdaq SmallCap Market and Nasdaq
rules, which require, among other things, minimum net tangible
assets of $2 million, a minimum bid price for our common stock of
$1.00, and stockholder approval prior to the issuance of securities
in connection with a transaction involving the sale or issuance of
common stock equal to 20 percent or more of a company's outstanding
common stock before the issuance for less than the greater of book
or market value of the stock. If we are unable to satisfy the
Nasdaq criteria for maintaining listing, the common stock would be
subject to delisting. Trading, if any, of the common stock would
thereafter be conducted in the over-the-counter market, in the so-
called "pink sheets" or on the National Association of Securities
Dealers, Inc. "electronic bulletin board." As a consequence of any
such delisting, a stockholder would likely find it more difficult to
dispose of, or to obtain accurate quotations as to the prices, of
the common stock.
If Nasdaq Delists Our Common Stock You Would Need to Comply
with the Penny Stock Regulations Which Could Make it More Difficult
to Sell Your Common Stock
In the event that our securities are not listed on the
SmallCap, trading of the common stock would be conducted in the
"pink sheets" or through the NASD's Electronic Bulletin Board and
covered by Rule 15g-9 under the Securities Exchange Act of 1934.
Under such rule, broker/dealers who recommend these securities to
persons other than established customers and accredited investors
must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a
transaction prior to sale. Securities are exempt from this rule if
the market price is at least $5.00 per share.
The Securities and Exchange Commission adopted regulations that
generally define a penny stock as any equity security that has a
market price of less than $5.00 per share, with certain exceptions.
Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks
associated with it. If our common stock were considered a penny
stock, the ability of broker/dealers to sell the common stock and
the ability of purchasers in this offering to sell their securities
in the secondary market would be limited. As a result, the market
liquidity for the common stock would be severely and adversely
affected. We cannot assure you that trading in our securities will
not be subject to these or other regulations in the future which
would negatively affect the market for such securities.
Terrorist attacks and the possibility of wider armed conflict
may have an adverse effect on our business and operating results.
Terrorist attacks and other acts of violence or war,
such as those that took place on September 11, 2001, could have a
material adverse effect on our business and operating results. There
can be no assurance that there will not be further terrorist
attacks against the United States or its businesses or interests.
The adverse effects that such violent acts and threats of future
attacks could have on the U.S. economy could similarly have a
material adverse effect on our business and results of operations.
Finally, further terrorist acts could cause the United States to
enter into a wider armed conflict which could further impact our
business and operating results.
Impact of potential future acquisitions.
From time to time, the Company has pursued, and may
continue to pursue, acquisitions. If one or more acquisitions
results in the Company becoming substantially more leveraged on a
consolidated basis, the Company's flexibility in responding to
adverse changes in economic, business or market conditions may be
adversely affected.
We are subject to risks inherent in ownership of real estate.
Real estate cash flows and values are affected by a number of
factors, including changes in the general economic climate, local,
regional or national conditions (such as an oversupply of
communities or a reduction in rental demand in a specific area), the
quality and philosophy of management, competition from other
available properties and the ability to provide adequate property
maintenance and insurance and to control operating costs. Real
estate cash flows and values are also affected by such factors as
government regulations, including zoning, usage and tax laws,
interest rate levels, the availability of financing, property tax
rates, utility expenses, potential liability under environmental and
other laws and changes in environmental and other laws. Although we
seek to minimize these risks through our market research and
property management capabilities, they cannot be totally eliminated.
Real estate investments are relatively illiquid and we may not
be able to sell properties when appropriate.
Equity real estate investments are relatively illiquid, which
may tend to limit our ability to react promptly to changes in
economic or other market conditions. Our ability to dispose of
assets in the future will depend on prevailing economic and market
conditions.
Changes in laws may result in increased cost.
We may not be able to pass on increased costs resulting from
increases in real estate taxes, income taxes or other governmental
requirements directly to our residents. Substantial increases in
rents, as a result of those increased costs, may affect the ability
of a resident to pay rent, causing increased vacancy. Changes in
laws increasing potential liability for environmental conditions or
increasing the restrictions on discharges or other environmental
conditions may result in significant unanticipated expenditures.
Compliance with environmental regulations may be costly.
We must comply with certain environmental and health and safety
laws and regulations related to the ownership, operation,
development and acquisition of apartments. Under those laws and
regulations, we may be liable for, among other things, the costs of
removal or remediation of certain hazardous substances, including
asbestos-related liability. Those laws and regulations often impose
liability without regard to fault.
Compliance or failure to comply with laws requiring access to
the Company's properties or investments by disabled persons could
result in substantial cost.
The Americans with Disabilities Act, the Fair Housing
Act of 1988 and other federal, state and local laws generally
require that public accommodations be made accessible to disabled
persons. Noncompliance could result in the imposition of fines by
the government or the award of damages to private litigants. These
laws may require the Company to modify its existing properties.
These laws may also restrict renovations by requiring improved
access to such buildings by disabled persons or may require the
Company to add other structural features that increase construction
costs. Legislation or regulations adopted in the future may impose
further burdens or restrictions on the Company with respect to
improved access by disabled persons. The Company cannot ascertain
the costs of compliance with these laws, which may be substantial.
Unfavorable changes in apartment markets and economic
conditions could adversely affect occupancy levels and rental rates.
Market and economic conditions in the various
metropolitan areas of the United States where the Company's has made
real estate investments or has real estate operations may
significantly affect occupancy levels and rental rates and therefore
profitability. Factors that may adversely affect these conditions
include the following:
- the economic climate, which may be adversely impacted by a
reduction in jobs, industry slowdowns and other factors;
- local conditions, such as oversupply of, or reduced demand
for, apartment homes;
- a future economic downturn that simultaneously affects one
or more of the Company's geographic markets or declines in
household formation;
- rent control or stabilization laws, or other laws regulating
rental housing, which could prevent the Company from raising
rents to offset increases in operating costs; and
- competition from other available apartments and other
housing alternatives and changes in market rental rates.
Any of these factors could adversely affect the Company's
ability to achieve desired operating results from its communities.
Possible difficulty of selling apartment communities could
limit the company's operational and financial results.
Market conditions could change and purchasers may not
be willing to pay acceptable prices for the apartment complexes the
Company has invested in if the properties were to be put up for
sale. This could negatively effect the Company's anticipated
results from its real estate investment and operations.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference
into this prospectus contain some forward-looking statements which
involve substantial risks and uncertainties. These forward-looking
statements can generally be identified by the use of forward-looking
words like "may," "will," "except," "anticipate," "intend,"
"estimate," "continue," "believe" or other similar words. Similarly,
statements that describe our future expectations, objectives and
goals or contain projections of our future results of operations or
financial condition are also forward-looking statements. Our future
results, performance or achievements could differ materially from
those expressed or implied in these forward-looking statements as a
result of certain factors, including those listed under the heading
"Risk Factors" and in other cautionary statements in this
prospectus.
USE OF PROCEEDS
Each selling stockholder will receive all of the proceeds from
the sale of its common stock offered by this prospectus. The
company will not receive any of the proceeds from the sale of the
shares of common stock offered by the selling stockholders.
However, the company will receive the exercise price with respect to
warrants when exercised by the holders thereof unless the holder
thereof elects to effect a "cashless" exercise. If all the warrants
are exercised, the company estimates its net proceeds would be
$13,480,000 (less the potential proceeds from any warrants
exercised on a "cashless" basis). There can be no assurance that the
company will receive any payments even if all of the warrants are
exercised. Any proceeds received will be used for working capital,
inventory purchases and other general corporate purposes.
DIVIDEND POLICY
The company has never declared or paid a dividend on its common
stock. We intend to retain earnings to finance the growth and
development of our business and do not expect to declare or pay any
cash dividends on our common stock in the foreseeable future. The
declaration of dividends is within the discretion of our board of
directors, which will review this dividend policy from time to time.
See "Risk Factors - We Do Not Anticipate Paying Any Dividends on the
Common Stock."
SELLING STOCKHOLDERS
The following table sets forth (i) the amount and percentage of
shares of common stock beneficially owned by each selling
stockholder prior to this offering, (ii) the number of such shares
being offered by each selling stockholder to the public from time to
time pursuant hereto, and (iii) the amount and percentage of shares
of common stock owned beneficially by each of the selling
stockholders upon completion of this offering (assuming the sale by
the selling stockholders of all the shares of common stock offered
by means of this prospectus).
Number of Shares Beneficially Owned
Shares Beneficially Shares Offered After the Offering
Owned Prior to the Offering For Resale Number %
Samuel J. (Sam) Furrow(1) 3,338,293 (2) 750,000(2) 2,588,293 16.27%
Samuel J. Furrow, Jr.(3) 1,713,158(4) 750,000(4) 963,158 6.35%
Commerce Investment Group, LLC(5) 3,163,637(6) 2,800,000(6) 363,637 2.40%
Integrated Apparel, LLC(5) 1,000,000(7) 1,000,000(7) 0 0%
MidAtlantic Agency, Inc. LLC(8) 100,000(9) 100,000(9) 0 0%
Innavation, LLC 3,212,500(10) 3,212,500(10) 0 0%
C J Rahm, LP(11) 225,000(9) 225,000(9) 0 0%
FVB Family Limited Partnership LP(11) 50,000 50,000 0 0%
Cecilia I. Rossi and 25,000 25,000 0 0%
Anthony C. Rossi(11)
SHD Investments, LLC(13) 750,000(12) 500,000(12) 250,000 *%
Griffin James Aron Guez 500,000(15) 250,000 250,000 1.65%
Irrevocable Trust dated
Sept. 13, 1996(14)
Stephan Avner Felix Guez 250,000(16) 250,000 0 0%
Irrevocable Trust dated
Sept. 13, 1996(14)
Nir Levitan 12,500 12,500 0 0%
Joseph Yariv 6,250 6,250 0 0%
Alec Land(11) 67,188(17) 4,688 62,500 0%
Eyal Ben-Yosef(11) 3,125(18) 3,125 0 0%
Lon Morton(11) 9,375(19) 9,375 0 0%
Gerald Pinsky(11) 3,125(20) 3,125 0 0%
Seymour Holtzman(11) 9,375(21) 9,375 0 0%
Milton Koffman(11) 37,500(22) 6,250 31,250 0%
Mark Friedman(11) 3,125(23) 3,125 0 0%
Max Candiotty(11) 7,812(24) 7,812 0 0%
Martin Kaufman(11) 15,625(25) 15,625 0 0%
Fredrick Benetti(11) 3,125(26) 3,125 0 0%
Jerry Wilson(11) 3,125(27) 3,125 0 0%
Brentwood Holding(11) 12,500(28) 12,500 0 0%
HK Partnership 12,500(29) 12,500 0 0%
Ann Seccombe & Roger R. Williams 6,250(30) 6,250 0 0%
TOTALS 14,540,088 10,031,250 4,508,838 24.58%
* Less than 1% of outstanding shares.
(1) Sam Furrow has been a director and Chairman since April 1998
and served as Chief Executive Officer from October 1998 through
December 2000.
(2) Includes 10,000 shares subject to currently exercisable options
with an exercise price of $1.00 per share expiring in April 2022 and
750,000 shares subject to exercisable warrants with a 3-year term
expiring October 2003 and an exercise price of $2.10 per share and
25,641 shares subject to exercisable 20-year term options with an
exercise price of $0.39 per share granted under the Company's 2000
Director Stock Incentive Plan in lieu of cash directors' fees.
(3) Mr. Jay Furrow, Sam Furrow's son, became the company's Vice
President for Corporate Development and In-House Counsel in August
1998 and a Director in January 1999. Mr. Furrow served as President
from December 2000 until July 2002, when he became Chief Executive
Officer. He has also served as the company's Chief Operating
Officer since April 1999 and its Acting Chief Financial Officer
since August 2000.
(4) Includes 100,000 shares subject to currently exercisable
options with an exercise price of $2.40 per share and a 5-year term
expiring in December 2007; 150,000 shares subject to exercisable
options pursuant to a 200,000 option grant of nonqualified options
made in June 2001 with an exercise price of $1.25 per share and
expiring June 5, 2005; 100,000 shares subject to currently
exercisable options with an exercise price of $4.75 expiring in
February 2004; 25,000 shares subject to currently exercisable
options with an exercise price of $3.31 per share expiring in July
2003, and includes 750,000 shares subject to currently exercisable
warrants with an exercise price of $2.10 per share and expiring in
October 2003.
(5) Commerce Investment Group, LLC and Integrated Apparel, LLC are
controlled by Mr. Hubert Guez. Pursuant to agreements entered into
with the company by Commerce and affiliates when Commerce invested
in the company, Mr. Guez may become a member of the Board of
Directors and designate two additional Board members immediately.
(6) Includes currently exercisable warrants aggregating 1,000,000
shares which have an exercise price of $2.10 per share and an
expiration date of October 2003 and currently exercisable warrants
aggregating 300,000 shares which have an exercise price of $2.10 per
share and an expiration date of October 2005.
(7) Includes currently exercisable warrants aggregating 1,000,000
shares which have an exercise price of $2.10 per share and an
expiration date of October 2003
(8) MidAtlantic Agency, Inc. received warrants from its wholly-
subsidiary, Third Millennium Properties, Inc. Under the terms of the
agreement pursuant to which Third Millennium Properties, Inc, JAML,
LLC and Innavation, LLC purchased shares and warrants from the
company, Mr. Joseph Mizrachi may become a member of the Board of
Directors and designate an additional Board member. MidAtlantic
Agency, Inc. and Third Millennium Properties, Inc. are controlled by
Mr. Simon Mizrachi.
(9) Includes 100,000 shares subject to immediately exercisable
options with a purchase price of $2.00 per share expiring in October
2003. C.J. Rahm, L.P. is controlled by Simon Mizrachi.
(10) Includes 1,400,000 shares subject to immediately exercisable
options with a purchase price of $2.00 per share expiring in October
2003.
(11) The subject securities have been distributed to the respective
selling stockholder as an owner of Third Millennium Properties, Inc.
or JAML, LLC.
(12) Includes 500,000 shares subject to immediately exercisable
warrants with a purchase price of $2.10 per share expiring in
October 2003.
(13) SHD Investments, LLC is controlled by Mr. Guez's brother, Paul
Guez.
(14) Griffin and Stephan Guez are the sons of Hubert Guez. Mr.
Guez's mother serves as trustee of the trusts.
(15) Includes 250,000 shares subject to immediately exercisable
warrants with a purchase price of $2.10 per share expiring in
October 2003.
(16) Includes 250,000 shares subject to immediately exercisable
warrants with a purchase price of $2.10 per share expiring in
October 2003.
(17) Includes 4,688 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(18) Includes 3,125 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(19) Includes 9,375 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(20) Includes 3,125 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(21) Includes 9,375 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(22) Includes 6,250 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(23) Includes 3,125 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(24) Includes 7,812 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(25) Includes 15,625 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(26) Includes 3,125 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(27) Includes 3,125 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(28) Includes 12,500 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(29) Includes 12,500 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
(30) Includes 6,250 shares subject to immediately exercisable
warrants with a purchase price of $2.00 per share expiring in
October 2003.
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares of common stock
at various times in one or more of the following transactions:
- on any U.S. securities exchange on which our common stock may
be listed at the time of
such sale;
- in the over-the-counter market;
- in transactions other than on such exchanges or in the over-the-
counter market;
- in connection with short sales; or
- in a combination of any of the above transactions.
The selling stockholders may offer their shares of common stock
at prevailing market prices, at prices related to the prevailing
market prices, at negotiated prices or at fixed prices. The selling
stockholders may transfer shares to discharge indebtedness, as
payment for goods or services, or for other non-cash consideration.
The selling stockholders may use broker-dealers to sell their
shares of common stock. If this occurs, broker-dealers will either
receive discounts or commission from the selling stockholder, or
they will receive commissions from the purchasers of shares of
common stock for whom they acted as agents. These brokers may act as
dealers by purchasing any and all of the shares covered by this
prospectus either as agents for others or as principals for their
own accounts and reselling these securities under the prospectus.
The selling stockholders and any broker-dealers or other
persons acting on the behalf of parties that participate in the
distribution of the shares may be considered underwriters under the
Securities Act. As such, any commissions or profits they receive on
the resale of the shares may be considered underwriting discounts
and commissions under the Securities Act.
As of the date of this prospectus, we are not aware of any
agreement, arrangement or understanding between any broker or dealer
and any of the selling stockholders with respect to the offer or
sale of the shares under this prospectus. If we become aware of any
agreement, arrangement or understanding, to the extent required
under the Securities Act, we will file a supplemental prospectus to
disclose:
- the name of any of the broker-dealers;
- the number of shares involved;
- the price at which the shares are to be sold;
- the commissions paid or discounts or concessions allowed to
broker-dealers, where
applicable;
- that the broker-dealers did not conduct any investigation to
verify the information set
out in this prospectus, as supplemented; and
- other facts material to the transaction.
Certain of the agreements with the selling stockholders contain
reciprocal indemnification provisions between us and the selling
stockholder to indemnify each other against certain liabilities,
including liabilities under the Securities Act, which may be based
upon, among other things, any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of
a material fact.
DESCRIPTION OF SECURITIES
Common Stock
Pursuant to the company's Amended and Restated Certificate of
Incorporation, the company is authorized to issue 40 million shares
of common stock, $.10 par value per share. As of July 15, 2003, the
company had outstanding 18,056,562 validly issued, fully paid and
nonassessable shares of common stock.
Holders of the common stock are entitled to one vote for each
share held of record in each matter properly submitted to such
holders for a vote. Subject to the rights of the holders of any
other outstanding series of stock the board of directors of the
company may designate from time to time, holders of common stock are
entitled to receive their pro rata share of (i) any dividends that
may be declared by the board of directors out of assets legally
available therefore, and (ii) any excess assets available upon the
liquidation, dissolution, or winding up of the company.
The board of directors may issue the additional shares of
common stock, up to the authorization of 40 million shares, without
soliciting additional stockholder approval. The existence of
authorized but unissued shares of the common stock could tend to
discourage or render more difficult the completion of a hostile
merger, tender offer or proxy contest. For example, if in the due
exercise of its fiduciary obligations, the board of directors were
to determine that a takeover proposal was not in the best interest
of the company and its stockholders, the ability to issue additional
shares of stock without further stockholder approval could have the
effect of rendering more difficult or costly the completion of the
takeover transaction, by diluting the voting or other rights of the
proposed acquiror or insurgent stockholder group, by creating a
substantial voting block in hands that might support the position of
the board of directors, by effecting an acquisition that might
complicate or preclude the takeover, or otherwise.
Preferred Stock
The company's Amended and Restated Certificate of Incorporation
authorizes the issuance of up to 5 million shares of preferred stock
with designations, rights and preferences determined from time to
time by the Board of Directors. Accordingly, the Board of Directors
is empowered, without stockholder approval, to issue preferred stock
with dividends, liquidation, conversion, voting and other rights
that could adversely affect the voting power or other rights of the
holders of common stock. In the event of issuance, the preferred
stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the
company.
Certain Provisions Relating to Share Acquisitions
Section 203 of the Delaware General Corporation Law generally
prevents a corporation from entering into certain business
combinations with an interested stockholder (defined as any person
or entity that is the beneficial owner of at least 15% of a
corporation's voting stock) or its affiliates for a period of three
years after the date of the transaction in which the person became
an interested stockholder, unless (i) the transaction is approved by
the board of directors of the corporation prior to such business
combination, (ii) the interested stockholder acquires 85% of the
corporation's voting stock in the same transaction in which it
exceeds 15%, or (iii) the business combination is approved by the
board of directors and by a vote of two-thirds of the outstanding
voting stock not owned by the interested stockholder. The Delaware
General Corporation Law provides that a corporation may elect not to
be governed by Section 203. The company has made no such election
and is therefore governed by Section 203. Such anti-takeover
provision may have an adverse effect on the market for the company's
securities.
Indemnification and Limitation of Liability
The company's Amended and Restated Certificate of Incorporation
provides that the company shall indemnify its officers and directors
to the fullest extent permitted by Delaware law, including some
instances in which indemnification is otherwise discretionary under
Delaware law. The Amended and Restated Certificate of Incorporation
also provides that, pursuant to Delaware law, the company's
directors shall not be liable for monetary damages for breach of the
director's fiduciary duty of care to the company and its
stockholders. This provision does not eliminate the duty of care,
and, in appropriate circumstances, equitable remedies such as an
injunction or other forms of non-monetary relief would remain
available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's
duty of loyalty to the company, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of
law, for actions leading to improper personal benefit to the
director and for payment of dividends or approval of stock
repurchases or redemptions that are unlawful under Delaware law.
The provision also does not affect a director's responsibilities for
environmental laws.
At present, there is no pending litigation or proceeding
involving a director or officer of the company as to which
indemnification is being sought, nor is the company aware of any
threatened litigation that may result in claims for indemnification
by any officer or director.
Transfer and Warrant Agent
The transfer agent for the company's common stock is
ComputerShare Investor Services, Lakewood, Colorado.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission.
You may read and copy any document we file at the Securities and
Exchange Commission's public reference rooms at 450 Fifth Street,
N.W., Washington, DC 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public
reference rooms. Our Securities and Exchange Commission filings are
also available to the public from the Securities and Exchange
Commission's website at "http://www.sec.gov."
We have filed a registration statement on Form S-1 as amended
by a post-effective amendment number one on Form S-3 with the
Securities and Exchange Commission to register the offering of the
shares of common stock offered pursuant to this prospectus. This
prospectus is part of that registration statement and, as permitted
by the Securities and Exchange Commission's rules, does not contain
all of the information included in the registration statement. For
further information about us, this offering and our common stock,
you may refer to the registration statement and its exhibits and
schedules as well as the documents described below. You can review
and copy these documents at the public reference facilities
maintained by the Securities and Exchange Commission or on the
Securities and Exchange Commission's website as described above.
This prospectus may contain summaries of contracts or other
documents. Because they are summaries, they will not contain all of
the information that may be important to you. If you would like
complete information about a contract or other document, you should
read the copy filed as an exhibit to the registration statement or
incorporated in the registration statement by reference.
The Securities and Exchange Commission allows us to
"incorporate by reference" the information we file with them, which
means that we can disclose important information to you by referring
you to those documents. The information we incorporate by reference
is considered to be an important part of this prospectus, and
information that we file with the Securities and Exchange Commission
at a later date will automatically update or supersede this
information. We incorporate by reference the following documents as
well as any future filing we will make with the Securities and
Exchange Commission (File No. 0-18926) under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934:
1. Our annual report on Form 10-K for the fiscal year ended
November 30, 2002, as amended by a Form 10-K/A filing filed on March
27, 2003;
2. Our Quarterly Report on Form 10-Q for the three months ended
March 1, 2003;
3. Our Current Report on Form 8-K dated March 17, 2003;
4. Our Current Report on Form 8-K dated April 15, 2003;
5. Our Current Report on Form 8-K dated June 17, 2003;
6. Our Quarterly Report on Form 10-Q for the six months ended May
31, 2003; and
7. Our Current Report on Form 8-K dated July 15, 2003.
You may request a copy of these filings, at no cost, by writing
to or calling Donna Drewrey, Innovo Group Inc., 2633 Kingston Pike,
Suite 100, Knoxville, Tennessee 37919, telephone 865-546-1110.
EXPERTS
The consolidated financial statements of the Innovo Group Inc.
appearing in Innovo Group Inc.'s Annual Report (Form 10-K) for the
year ended November 30, 2002 and the year ended December 1, 2001
have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon and incorporated herein by reference
by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.
CAUTIONARY STATEMENTS
No person has been authorized to give any information or to
make any representation not contained in this prospectus in
connection with this offering of common stock and, if given or made,
no one may rely on such unauthorized information or representations.
This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the common
stock to which it relates, or an offer to sell or the solicitation
of an offer to buy such securities in any jurisdiction in which such
offer or solicitation may not be legally made. Neither the delivery
of this prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained
herein is correct as of any date subsequent to the date hereof.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee $ 2,047
Nasdaq fee --
Accounting fees and expenses 15,000
Legal fees and expenses 25,000
Printing and engraving expenses 500
Blue Sky fees and expenses --
Transfer Agent and Registrar fee --
Miscellaneous expenses 500
------
$43,047
Item 15. Indemnification of Directors and Officers
Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify any of its directors and officers against
expenses (including attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding (i) if any such
person acted in good faith and in a manner reasonably believed to be
in or not opposed to be the best interests of the corporation, and
(ii) in connection with any criminal action or proceeding if such
person had no reasonable cause to believe such conduct was unlawful.
In actions brought by or in the right of the corporation, however,
Section 145 provides that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the
performance of such person's duty to the corporation unless, and
only to the extent that, the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in review of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem
proper. Article Nine of the company's Amended and Restated
Certificate of Incorporation requires that the company indemnify its
directors and officers for certain liabilities incurred in the
performance of their duties on behalf of the company to the fullest
extent allowed by Delaware law.
The company's Amended and Restated Certificate of Incorporation
relieves its directors from personal liability to the company or to
stockholders for breach of any such director's fiduciary duty as a
director to the fullest extent permitted by the Delaware General
Corporation Law. Under Section 102(b)(7) of the Delaware General
Corporation Law, a corporation may relieve its directors from
personal liability to such corporation or its stockholders for
monetary damages fore any breach of their fiduciary duty as
directors except (i) for a breach of the duty of loyalty, (ii) for
failure to act in good faith, (iii) for intentional misconduct or
knowing violation of law, (iv) for willful or negligent violations
of certain provisions of the Delaware General Corporation Law
imposing certain requirements with respect to stock repurchases,
redemptions and dividends, or (v) for any transaction from which the
director derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or
controlling persons of the company pursuant to the foregoing
provisions, the company has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is
therefore unenforceable.
Item 16. Exhibits
The following exhibits are filed as part of the Registration
Statement:
Exhibit Index
Exhibit
Number Description Reference
No.
5.1 Opinion of Sims Moss Kline & Davis, LLP. *
23.1 Consent of Ernst & Young, LLP Filed Herewith
24 Power of Attorney **
__________________________
* Filed as Exhibit 5.1 to original registration statement on
Form S-1 (File No. 333-52318) on December 20, 2000.
** Filed as Exhibit 24 to original registration statement on
Form S-1.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information in the registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
provisions described under Item 14 above, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer of controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
assured by such director, officer or controlling person in
connection with the securities being registered hereunder, the
Registrant will, unless in the opinion of its counsel the
question has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement
as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(d) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Commerce, California, on
July 18, 2003.
INNOVO GROUP INC.
By: /s/ Samuel J. Furrow, Jr.
-------------------------
Samuel J. Furrow, Jr.
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Samuel J. Furrow,
Jr. and Samuel J. Furrow, Sr., and each of them, his true and lawful
attorney-in-fact, as agent with full power of substitute and
resubstitution for him and in his name, place and stead, in any and
all capacity, to sign any or all amendments to this Registration
Statement and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorney-in-fact and agent full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully and to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/S/ Samuel J. Furrow Chairman of the Board, July 18, 2003
-------------------- Director
Samuel J. Furrow
/s/ Patricia Anderson President and Director July 18, 2003
---------------------
Patricia Anderson
/s/ Samuel J. Furrow,Jr. CEO, Director and July 18, 2003
------------------------ Principal Executive
Samuel J. Furrow, Jr. Officer
/s/ Dan Page Director July 18, 2003
------------
Dan Page
/s/ Marc B. Crossman Chief Financial Officer, July 18, 2003
------------------- Director, and Principal
Marc B. Crossman Financial and Accounting
Officer
/s/ John G. Looney Director July 18, 2003
------------------
John G. Looney
/s/ Suhail Rizvi Director July 18, 2003
----------------
Suhail Rizvi
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-3, No. 333-52318) and related
Prospectus of Innovo Group Inc. for the registration of 10,031,250
shares of its common stock and to the incorporation by reference
therein of our report dated February 4, 2003, with respect to the
consolidated financial statements and schedule of Innovo Group Inc.
included in its Annual Report (Form 10-K) for the year ended
November 30, 2002, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Los Angeles, California
July 17, 2003