UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION FILED PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date: DECEMBER 7, 2005
COVENTURE INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-31539 98-0231607
(Commission File No.) (IRS Employer ID)
TANG XING SHU MA BUILDING, SUITE 418
TANG XING ROAD
XIAN HIGH TECH AREA
XIAN, SHAANXI PROVINCE
CHINA
(Address of principal executive offices and zip code)
86-29-88323325
(Registrant's telephone number, including area code)
On December 6, 2005, Coventure International Inc.("Coventure"), entered
into and closed a share purchase agreement with Xian Xilan Natural Gas Co.,
Ltd., a corporation formed under the laws of the People's Republic of China
("Xilan" or the "Company"), and each of Xilan's shareholders (the "Purchase
Agreement"). Pursuant to the Agreement, Coventure acquired all of the issued and
outstanding capital stock of Xilan from the Xilan shareholders in exchange for
4,000,000 shares of Coventure common stock. Concurrently with the closing of the
Purchase Agreement and as a condition thereof, Coventure entered into an
agreement with John Hromyk, its President and Chief Financial Officer, pursuant
to which Mr. Hromyk returned 5,971,178 shares of Coventure common stock to
Coventure for cancellation. Mr. Hromyk was not compensated in any way for the
cancellation of his shares of Coventure Common Stock. Upon completion of the
foregoing transactions, Coventure had an aggregate of 5,051,022 shares of common
stock issued and outstanding. The shares of common stock issued to the
shareholders of Xilan were issued in reliance upon the exemption from
registration provided by Regulation S under the Securities Act of 1933, as
amended.
In connection with the acquisition of Xilan on December 6, 2005, John
Hromyk resigned as the sole officer of Coventure and the following executive
officers of Xilan were appointed as executive officers of Coventure:
Name Title
------------- -----------------------------
Minqing Lu Chief Executive Officer
Xiaogang Zhu Chief Financial Officer
Yuman Chen Vice President - Marketing
Liangzhong Li Vice President - Construction
The following information is being furnished in compliance with section
14(f) of the Securities Exchange Act of 1934 and regulation 14f-1 promulgated
thereunder.
1. There is currently one class of voting securities of Coventure entitled
to be voted at a meeting, or by written consents or authorizations if no meeting
is held. The class of voting securities is common stock. There are currently
5,051,022 shares of common stock outstanding.
2. The following table sets forth certain information, as of December 7,
2005 with respect to the beneficial ownership of the Company's outstanding
common stock following the acquisition of Xilan by (i) any holder of more than
five (5%) percent; (ii) each of the named executive officers, directors and
director nominees; and (iii) our directors, director nominees and named
executive officers as a group. Except as otherwise indicated, each of the
stockholders listed below has sole voting and investment power over the shares
beneficially owned.
Common Stock Percentage of
Name of Beneficial Owner (1) Beneficially Owned Common Stock
---------------------------- ------------------ ------------
Minqing Lu 173,913 3.4%
Qinan Ji 1,482,899(2) 29.3%(2)
Bo Chen 515,942(3) 10.2%(3)
Yangling Bodisen Biotech
Development Co, Ltd. 515,942(3) 10.2%
John Hromyk -- --
Xiang Ji 364,058 7.2%
Shaohu Jia 270,145 5.3%
Xian Sunway Technology
& Industry Co., Ltd 718,841(2) 14.2%
All officers, directors and
director nominees as a group 2,172,754(2)(3) 42.9%
(4 persons)
(1) Except as otherwise indicated, the address of each beneficial owner is c/o
Xian Xilan Natural Gas Co., Ltd., Tang Xing Shu Ma Building, Suite 418, Tang
Xing Road, Xian High Tech Area, Xian, Shaanxi Province, China.
(2) Of which 718,841 shares are owned by Xian Sunway Technology & Industry Co.,
Ltd. ("Sunway"). Qinan Ji owns 42.1% of Xian Sunway and may be deemed to
beneficially own such shares.
(3) Of which 515,942 shares are owned by Yangling Bodisen Biotech Development
Co, Ltd. ("Bodisen"). Mr. Chen is President, a member of the Board of Directors
and a 23% stockholder of Bodisen and may be deemed to beneficially own such
shares.
3. There are no arrangements, known to Coventure, including any pledge by
any person of securities of Coventure, the operation of which may at a
subsequent date result in a change in control of Coventure other than in
connection with the share exchange described above.
3
4. The transaction referred to herein occurred since the beginning of its
last fiscal year. The names of the persons who will acquire control are:
Common Stock Percentage of
Name of Beneficial Owner Beneficially Owned Common Stock
------------------------ ------------------ ------------
Minqing Lu 173,913 3.4%
Qinan Ji 1,482,899(1) 29.3%(1)
Bo Chen 515,942(2) 10.2%(2)
Yangling Bodisen Biotech
Development Co, Ltd. 515,942(2) 10.2%
Xian Sunway Technology
& Industry Co., Ltd 718,841(1) 14.2%
(1) Of which 718,841 shares are owned by Xian Sunway Technology & Industry Co.,
Ltd. ("Sunway"). Qinan Ji owns 42.1% of Xian Sunway and may be deemed to
beneficially own such shares.
(2) Of which 515,942 shares are owned by Yangling Bodisen Biotech Development
Co, Ltd. ("Bodisen"). Mr. Chen is President, a member of the Board of Directors
and a 23% stockholder of Bodisen and may be deemed to beneficially own such
shares.
5. No officer, director or affiliate of Coventure, or any owner of 5% or
more of the common stock of Coventure, or any associate of any such officer,
director, affiliate or Coventure or security holder is a party adverse to
Coventure or has a material interest adverse to Coventure.
6. The following is the business experience during the past five years of
each director and executive officer and each director nominee.
CURRENT OFFICER AND DIRECTOR
JOHN HROMYK, DIRECTOR
John Hromyk has been Coventure's sole director since August 30, 2001 and
was President and Chief Financial Officer of Coventure from August 30, 2001
through December 6, 2005. From May 1999 to June 2001, he was the sole proprietor
of Banded Peak Venture Services, a business development and
management-consulting firm located in Calgary, Alberta. Banded Peak Venture
Service is presently inactive. For three years prior, he was the founder and
president of Hillside Estate Winery Ltd. located in Penticton, British Columbia.
Hillside Estate Winery, Ltd. is an established winery which produces a small
number of high quality varietal wines which are sold through its wine shop and
to specialty stores and restaurants. From June 1985 to April 1996, Mr. Hromyk
was a contract magazine publisher for numerous Canadian regional and national
periodicals. Educated in Vancouver, British Columbia Mr. Hromyk studied
biological sciences from 1980 to 1984 at Vancouver Community College (Langara)
and at the University of British Columbia. He also completed a Diploma Program
in Business Administration and Marketing from Capilano College in North
Vancouver in 1986.
DIRECTOR NOMINEES
QINAN JI, CHAIRMAN OF THE BOARD OF DIRECTORS
Mr. Ji joined Xilan as the Chairman of the Board of Directors in 2005. In
1996, he founded the Anxian Hotel in Weinan City in Shaanxi Province. In 2001,
he formed the Xian Sunway Technology and Industry Co., Ltd. He has more than 20
years experience in the energy and petroleum industries in operational,
administrative, management and government relations roles. He received a
Bachelor of Economy Management from North West University (Shaanxi).
4
BO CHEN, VICE CHAIRMAN OF THE BOARD OF DIRECTORS
Mr. Chen was named Vice Chairman of the Board of Directors of Xilan in
October 2005. He is currently the President of Bodisen Biotech, Inc., a publicly
listed company on the AMEX (symbol: BBC), and is one of its original founders
and stockholders having joined that company in 2000. From August 1997 to August
2001, Mr. Chen was Chief Operations Officer and Chief Technology Officer of
Shaanxi Bodisen Chemical Co., Ltd. From July 1994 to December 1997, he was the
Chief Executive Officer and President of Yang Ling Shikanglu Chemical Technology
Development Co., Ltd. He received his Bachelor of Science degree from Shaanxi
Normal College in July 1984.
MINQING LU, CHIEF EXECUTIVE OFFICER, MEMBER OF THE BOARD OF DIRECTORS
Mr. Lu joined Xilan in February 2005. He is Chief Executive Officer and
serves on the Board of Directors. From February 1999 to May 2002, he was the
executive director of Beijing Peixinkenu Investment Consultancy Company. From
May 2002 to July 2004, he was President of Fenghua Aidi Air Service Company in
Beijing. He received a Certificate of Management in July 1994 from Central Party
College.
7. Coventure has not been a party to any transaction since the beginning of
Coventure's fiscal year nor is Coventure a party to a currently proposed
transaction with any director or executive officer, nominee for election as a
director, security owner who owns of record or beneficially more than five
percent of Coventure's common stock and any member of the immediate family of
any of the foregoing other than as described above.
8. None of the following have been or are currently indebted to Coventure
since the beginning of Coventure's last fiscal year: any director of executive
officer of Coventure; any nominee for election as a director; any member of the
immediate family of any of the foregoing; any corporation or organization of
which any of the foregoing persons is directly or indirectly, the beneficial on
where of ten percent or more of any class of equity securities; or, any trust or
other estate in which any of the foregoing have a substantial beneficial
interest or as to which such person serves as a trustee or in a similar
capacity.
9. Compliance with Section 16(a) of the Securities Exchange Act of 1934 -
Section 16(a) of the Securities and Exchange Act of 1934 requires certain
defined person to file reports of and changes in beneficial ownership of a
registered security with the Securities and Exchange Commission. Under the
regulatory procedure, officers, directors and persons who own more than ten
percent of a registered class of a company's equity securities are also required
to furnish Coventure with copies of all Securities 16(a) forms they filed. Based
on a review, John Hromyk, the sole person that constituted Coventure's officers,
directors and owners of 10% or more of the outstanding shares of common stock,
filed his Forms 3, 4 or 5 with the Securities and Exchange Commission as
required. Messrs. Ji, Chen and Lu have not filed their Form 3, but will do so
prior to the filing deadline.
10. None of the officers, directors or director nominees, or owners of 10%
or more of the common stock of Coventure have had any of the relationships
described in Item 404(b) of Reg. S-K.
11. Coventure does not have any Board committees. There were no meetings of
the board of directors during the last twelve months other than the action to
approve the Purchase Agreement.
12. The following table sets forth the compensation paid to Coventure's
officers during fiscal 2005, 2004 and 2003. This information includes the dollar
value of base salaries, bonus awards and number of stock options granted, and
certain other compensation, if any.
5
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL
COMPENSATION LONG TERM COMPENSATION
AWARDS PAYOUTS
ALL
NAME AND PRINCIPAL YEAR SALARY BONUS OTHER RESTRICTED SECURITIES OTHER
POSITION ANNUAL STOCK UNDERLYING LTIP COMPEN-
($) ($) COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS SATION ($)
($) ($) (#) ($)
------------------------------------------------------------------------------------------------------------------------------
John Hromyk, President, 2005 Nil Nil $ 4,535 Nil Nil Nil Nil
Chief Financial Officer, 2004 Nil Nil $27,821 Nil Nil Nil Nil
Secretary and Director 2003 Nil Nil $ 2,205 Nil Nil Nil $712
Our President (Chief Executive Officer), Chief Financial Officer, Secretary
and director John Hromyk is not paid a monthly salary but is compensated for
management fees as cash flow permits.
OPTION GRANTS IN LAST FISCAL YEAR
Coventure does not have an option plan and we did not grant any options to
purchase our common stock during the year ended July 31, 2005.
LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Coventure does not have any long term incentive plans.
BENEFIT PLANS
Coventure does not have a long-term incentive plan nor do we have a defined
benefit, pension plan, profit sharing or other retirement plan.
INDEMNIFICATION
Pursuant to the Articles of Incorporation and Bylaws of the corporation,
Coventure may indemnify an officer or director who is made a party to any
proceeding, including a law suit, because of his position, if he acted in good
faith and in a manner he reasonably believed to be in Coventure's best interest.
In certain cases, Coventure may advance expenses incurred in defending any such
proceeding. To the extent that the officer or director is successful on the
merits in any such proceeding as to which such person is to be indemnified,
Coventure must indemnify him against all expenses incurred, including attorney's
fees. With respect to a derivative action, indemnity may be made only for
expenses actually and reasonably incurred in defending the proceeding, and if
the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Delaware.
Regarding indemnification for liabilities arising under the Securities Act
of 1933, as amended, which may be permitted to directors or officers pursuant to
the foregoing provisions, Coventure is informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy, as expressed in the Act and is, therefore, unenforceable.
6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Coventure International Inc. has duly caused report to be signed on its behalf
by the undersigned hereunto duly authorized.
DATED: December 7, 2005
COVENTURE INTERNATIONAL INC.
By: /s/ MINQING LU
--------------
Minqing Lu,
Chief Executive Officer
7