As filed with the Securities and Exchange Commission on November __, 2002
Commission File No. 333-91664
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
Amendment No. 2
Registration Statement Under
THE SECURITIES ACT OF 1933
COVENTURE INTERNATIONAL INC.
----------------------------
(Exact name of registrant as specified in charter)
Delaware 7392 98-0231607
(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
Suite 174, 3359-27th Street N.E.
Calgary, Alberta T1Y 5E4
(403) 219-8880
----------- ---------------
(Address and telephone number of principal executive offices)
Suite 174, 3359-27th Street N.E.
Calgary, Alberta T1Y 5E4
(Address of principal place of business or intended principal place of business)
John Hromyk
Suite 174, 3359-27th Street N.E.
Calgary, Alberta T1Y 5E4
(403) 219-8880
------------------------- ---------------
(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent to
the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement
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. [ ]
CALCULATION OF REGISTRATION FEE
==============================================================================
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
---------- ---------- ----------- ------------- -------------
Common stock (2) 1,583,300 $0.25 $395,825 $37
------------------------------------------------------------------------------
Total
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(1) Offering price computed in accordance with Rule 457 (c).
(2) Shares of common stock offered by registrant and selling stockholders.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the exercise of the options or warrants as a result of any adjustment in
the number of securities issuable by reason of the options or warrants.
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 l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
COVENTURE INTERNATIONAL INC.
Common Stock
By means of this prospectus:
Coventure is offering for sale 1,000,000 shares of common stock at a price
of $0.25 per share, and
A number of the shareholders of Coventure International Inc. are offering
to sell up to 583,300 shares of common stock at a price of $0.25 per share.
As of the date of this prospectus there was no public market for
Coventure's common stock.
The shares offered by Coventure will be sold directly by Coventure.
Coventure will not pay any commissions or other form of remuneration in
connection with the sale of these shares.
The following table summarizes the proceeds that Coventure expects to
receive from the offering:
Per Share Total Maximum
Price to public $0.25 $250,000
Fees and commissions -- --
Net proceeds to Coventure before expenses $0.25 $250,000
The offering by Coventure is being conducted on a "best efforts" basis.
There is no minimum number of shares required to be sold by Coventure. All
proceeds from the sale of these shares will be delivered directly to the Company
and will not be deposited in any escrow account. We plan to end the offering on
January 31, 2003. However, we may, at our discretion, end the offering sooner or
extend the offering until February 28, 2003.
Since as of the date of this prospectus no market exists for our common
stock, sales by the selling shareholders, until a public market develops for our
common stock, will be made at prices privately negotiated by the selling
shareholder and a buyer. If and when a public market develops for our common
stock, the shares owned by the selling shareholders may be sold in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated transactions.
Coventure will not receive any proceeds from the sale of the common stock
by the selling stockholders. Coventure will pay for the expenses of this
offering.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
These securities are speculative and involve a high degree of risk. For a
description of certain important factors that should be considered by
prospective investors, see "Risk Factors" beginning on page 3 of this
Prospectus.
The date of this prospectus is November __, 2002
PROSPECTUS SUMMARY
We plan to be a North American provider of management consulting products
and services to a network of regionally licensed operators. We plan to provide
pro-active solutions to increase our client's profitability through strategic
analysis, planning, consulting and ongoing evaluation. Our licensees will
provide our clients with an enhanced understanding of local economic conditions
and domestic factors that impact a business in that area. Our core services may
be described as preventative maintenance programs which pinpoint inefficiencies
and trouble spots in a business before they cause significant erosion or crisis.
We have tested the Coventure Analysis methodologies on a mid-sized firm
located in Calgary, Alberta. The results proved that the methodology for
assessing business dysfunction was sound, however management is refining the
process of presenting the results to the client. Our website, www.coventure.com
, became active in May 2002. However, we will not be able to provide consulting
services until we raise the $50,000 to hire and train analysts and consultants
and $50,000 to market our services. We do not know when we will obtain the
$100,000 in capital.
Our initial focus will be on the development of Canadian and American
markets.
Our offices are located at Suite 174, 3359-27th Street N.E. Calgary,
Alberta T1Y 5E4. Our telephone number is (403) 219-8880 and our fax number is
(403) 219-8881.
The Offering
By means of this prospectus:
o We are offering to sell up to 1,000,000 shares of our common stock at a
price of $0.25 per share, and
o A number of our shareholders are offering to sell up to 583,300 shares of
common stock at a price of $0.25 per share. We refer to the owners of these
shares as the selling shareholders in this prospectus.
We will not receive any proceeds from the sale of the shares by selling
shareholders.
As of October 31, 2002, we had 6,718,200 issued and outstanding shares of
common stock.
The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of revenues and history of loss,
and the need for additional capital. See the "Risk Factors" section of this
prospectus for additional Risk Factors.
Summary Financial Data
The financial data presented below should be read in conjunction with the
more detailed financial statements and related notes which are included
elsewhere in this prospectus along with the section entitled "Management's
Discussion and Analysis and Plan of Operations."
Results of Operations:
Year Ended Year Ended
July 31, 2002 July 31, 2001
Revenue $ 2,678 $ --
Operating Expenses 62,028 (17,333)
---------- --------
Net Loss $(59,350) $(17,333)
========= =========
Balance Sheet Data:
July 31, 2002 July 31, 2001
------------- -------------
Current Assets $ 1,491 $ 301
Total Assets 2,257 1,301
Current Liabilities 26,035 3,229
Total Liabilities 26,035 3,229
Working Capital (Deficit) (24,544) (2,928)
Stockholders' Equity (Deficit) (23,778) (1,928)
RISK FACTORS
The securities being offered hereby are highly speculative and prospective
investors should consider, among others, the following factors related to the
business, operations and financial position of Coventure.
Since we have limited operations, a history of losses and may never be
profitable, the shares offered by this prospectus may never have any value. We
are in the development stage and have only generated $2,678 in revenue from
operations. We have never earned a profit. As a result of our losses from
operations and lack of cash our auditor has expressed doubt as to our ability to
continue operations. We will face considerable risks in each step of our
business plan, such as anticipated difficulty in raising capital and in
providing substantiated market performance to those wishing to license a
regional territory. Other anticipated challenges include finding and training
analysts and consultants and current negative economic conditions. As of July
31, 2002 our accumulated deficit was $87,760. We expect to incur additional
losses during the foreseeable future and we may never earn a profit, in which
case the shares of our common stock may have little or no value.
If we do not raise additional capital we may be unable to begin operations. We
do not have enough money to pay our liabilities or our operating expenses. We
need approximately $50,000 to begin our marketing program. We do not anticipate
generating positive cash flow during the first year of operations and,
therefore, anticipate obtaining the capital which we will require through a
combination of debt and equity financing. There is no assurance that we will be
able to obtain capital we will need or that our estimates of our capital
requirements will prove to be accurate. As of the date of this prospectus we did
not have any commitments from any source to provide additional capital.
If little or no funding is received during the next twelve months, we will be
forced to rely on funds loaned by management. Although John Hromyk, our only
officer and director, loaned us $10,000, Mr. Hromyk has no formal commitments or
arrangements to advance or loan us additional funds. In such a restricted cash
flow scenario, we would be unable to complete our business plan, and would,
instead, delay all cash intensive activities. Without necessary cash flow, we
may be dormant during the next twelve months, or until such time as necessary
funds can be raised.
Our offering of 1,000,000 shares at a price of $0.25 per share is being
conducted on a "best efforts" basis. There is no minimum number of shares
required to be sold in this offering. If only a small number of shares are sold
(and absent funding from any other source), the amount received from investors
may not provide any significant benefit to us. Even if all shares offered are
sold, we may need to obtain additional capital in order to finance our
operations.
Since our only officer plans to devote only a minimum amount of his time to our
business our chances of being successful will be less than if we had full time
management.
We may not be able to compete with other companies providing similar services,
in which case we will be out of business and our common stock will be worthless.
Many of our competitors have greater name recognition and greater financial,
management and marketing resources than we have. In addition, other potential
competitors could begin offering services similar to those which we plan to
provide in a relatively short period of time. If we cannot compete in our
industry segment we will go out of business and our common stock will not have
any value.
Forward Looking Statements
This prospectus contains various forward-looking statements that are based
on our beliefs as well as assumptions made by and information currently
available to us. When used in this prospectus, the words "believe", "expect",
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. Such statements may include statements regarding
seeking business opportunities, payment of operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause
actual results to differ materially from our projections or estimates. Factors
which could cause actual results to differ materially are discussed at length
under the heading "Risk Factors". Should one or more of the enumerated risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
USE OF PROCEEDS
The following table shows the intended use of the proceeds of this offering,
depending upon the number of shares sold:
Gross Offering Proceeds
-----------------------------------------
$100,000 $150,000 $200,000 $250,000
-------- -------- -------- --------
Regional Sales Staff Hiring and
Training $ 15,000 $ 20,000 $ 25,000 $ 25,000
Completion of Sales Plan and Training
Materials 5,000 7,500 10,000 10,000
Marketing Materials 10,000 15,000 25,000 30,000
Web Site Development 5,000 7,500 10,000 10,000
Development of Software to be used
for Diagnostic Assessments 15,000 20,000 25,000 25,000
General Overhead and Contingency 50,000 80,000 105,000 150,000
---------- ---------- --------- ---------
$100,000 $150,000 $200,000 $250,000
======== ======== ======== ========
If at least $100,000 is raised in this Offering, the Company expects that
it will be able to commence operations. See "Risk Factors".
The projected expenditures shown above are only estimates or
approximations and do not represent a firm commitment by us. To the extent that
the proposed expenditures are insufficient for the purposes indicated,
supplemental amounts required may be drawn from other categories of estimated
expenditures, if available. Conversely, any amounts not expended as proposed
will be used for general working capital.
Market for Common STOCK.
Our common stock is not quoted on any exchange and there is no public
trading market.
As of October 31, 2002, we had 6,718,200 issued and outstanding shares of
common stock and approximately 39 shareholders of record. We do not have any
outstanding options, warrants or other arrangements providing for the issuance
of additional shares of our capital stock.
Holders of our common stock are entitled to receive such dividends as may
be declared by our Board of Directors. The Board of Directors is not obligated
to declare a dividend. No dividends have ever been declared and we do not
anticipate or intend upon paying dividends for the foreseeable future.
Our Articles of Incorporation authorize our Board of Directors to issue up
to 5,000,000 shares of Preferred Stock. The provisions in the Articles of
Incorporation relating to the Preferred Stock allow our directors to issue
Preferred Stock with multiple votes per share and dividend rights which would
have priority over any dividends paid with respect to the holders of our common
stock. The issuance of Preferred Stock with these rights may make the removal of
management difficult even if the removal would be considered beneficial to
shareholders generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers if these
transactions are not favored by our management.
As of the date of this prospectus there was no public market for our
common stock. Trades of our common stock, should a market ever develop, will be
subject to Rule 15g-9 of the Securities and Exchange Commission, which rule
imposes certain requirements on broker/dealers who sell securities subject to
the rule to persons other than established customers and accredited investors.
For transactions covered by the rule, brokers/dealers must make a special
suitability determination for purchasers of the securities and receive the
purchaser's written agreement to the transaction prior to sale. The Securities
and Exchange Commission also has rules that regulate broker/dealer practices in
connection with transactions in "penny stocks". Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in that security is provided by the exchange or system). The penny
stock rules require a broker/ dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk disclosure
document prepared by the Commission that provides information about penny stocks
and the nature and level of risks in the penny stock market. The broker/dealer
also must provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker/dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker/dealer and salesperson compensation information, must be given to the
customer orally or in writing prior to effecting the transaction and must be
given to the customer in writing before or with the customer's confirmation.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for our common stock. As a result of
these rules, investors in this offering, should a market for our shares ever
develop, may find it difficult to sell their shares.
Management's discussion and Analysis
AND plan of operationS
Our plan of business encompasses the following steps.
o Raise capital of $250,000 through the sale of equity securities prior to
January 31, 2003
o Refine, market and expand our business plan and begin our licensing program
o Hire and train an outside sales force, analysts and consultants
We have made initial progress in implementing our business. Our website,
www.coventure.com became active in May 2002.
We will face considerable risks in each step of our business plan. Refer
to the section of this prospectus entitled "Risk Factors" for more information
concerning these risks.
Year ended July 31, 2001: Activity during the year ended July 31, 2001 was
confined to the development of a business plan and securing an Internet website.
Year ended July 31, 2002: During the year ended July 31, 2002 our
operations used $46,694 in cash. Operating capital was provided by a loan of
$10,000 from John Hromyk, our President, the sale of the 80,000 shares of our
common stock for $20,000 to Jacquie Hromyk, the wife of Mr. Hromyk, and the sale
of shares of our common stock for $17,500 to an unrelated third party.
BUSINESS
We were incorporated in Delaware on March 31, 1999 as Bullet Environmental
Systems, Inc. and on May 25, 2000 we changed our name to Liquidpure Corp. On
February 14, 2002 we changed our name to Coventure International Inc. Our
original business plan involved the manufacturing and marketing of potable and
waste-water treatment systems to various commercial, agricultural, and
industrial markets. We never sold any water treatment systems and on October 1,
2001 the agreement under which this plan of business originated was terminated.
We plan provide consulting services to small and medium sized businesses
in North America through a network of regionally licensed operators. Our
consulting services will be designed to improve a client's profitability through
strategic analysis, planning, consulting and ongoing evaluation. Our core
services will attempt to identify inefficiencies and trouble spots in a business
before they cause significant problems.
We have tested the Coventure Analysis methodologies on a mid-sized firm
located in Calgary, Alberta. The results proved that the methodology for
assessing business dysfunction was sound, however management is refining the
process of presenting the results to the client. Our website, www.coventure.com
became active in May 2002.
Products or Services
We plan to provide the following products and services to our clients. We
will be able to provide these services once we raise $100,000 in capital. Of
this amount, $50,000 will be used to hire and train the analysts and consultants
which will provide these services to future clients and $50,000 will be used to
market our products, services, and licensing program. We do not know when we
will obtain the $100,000 in capital. Our initial focus will be on the
development of Canadian and American markets.
We anticipate pricing our products and services at rates which are
comparable to those charged by consulting firms serving small and mid-sized
businesses and which are located in the same area as the client.
Diagnostic Assessment
Our Business Analysts will be trained to conduct an exhaustive Diagnostic Study.
The Diagnostic Study will reveal the unique conditions, concerns and procedures
that each individual business possesses as well as local economic conditions and
domestic factors that impact a business in the client's area of operation. Upon
completion of the Diagnostic Study, the Analyst will provide a confidential
review and report of the findings, with recommendations.
Our Diagnostic Study reviews the following areas of a client's business:
o Current and historical financial records, statements and reports
o Strategic and Operating Plans/Budgeting Policies
o The Organization Structure
o Policies and Procedures - Employee Manuals
o Internal Reporting Systems and Document Flows
o Employee Moral and Attitudes
o Management - Employee Communication
o Employee and Management Compensation
o Management Goals and Philosophy
o Fixed and Variable Cost Analysis
o Receivable and payable policies and performance
o Breakeven Assessments
o Pricing Strategies
o Sales and Marketing
o Supply Chain Management and Costs
o Inventory Controls and Performance
o Productivity and Employee Training
o Quality Controls and Customer Satisfaction
o Administration and Management Systems and Integration
Consulting Services
Following the completion of the Diagnostic Study, the information in the
Diagnostic Study will be evaluated and a consulting program will be prepared to
address those factors necessary for the client to achieve optimal levels of
profitability.
If requested by a client, we will periodically evaluate the client's
business, changing economic factors, and the client's progress in implementing
our recommendations.
Licensing
Unlike most competing firms that target small businesses on a nation-wide
basis, we plan to secure regional representation through licensing exclusive
territories to third parties.
Licensee candidates will be chosen for their past experience, personality,
education and passion for the small business sector. The amount paid to us as a
licensing fee will provide the licensee with all of the appropriate training for
their regional staff, promotional and diagnostic materials, regional
advertising, the initiation of a telemarketing program, some equipment, software
and most legal costs. All revenues generated by the regional licensee will be
billed through us and an average commission of 15% will be paid to the licensee.
All telephone, regional travel, entertainment and overhead costs in a territory
will be the responsibility of the licensee.
A licensee will be formally reviewed each quarter. Annual and quarterly
targets will be established prior to each new fiscal period. A manager will be
assigned to assist and guide the licensee and his operatives in securing their
targets. Upon two consecutive quarterly targets being not met, the licensee will
receive a warning that his territory is in jeopardy of being revoked. If
attempts to remedy the licensee's territory have proved unsuccessful the
territory will be reassigned and the licensee will lose their licensing fee. A
non-competition agreement will keep licensees from consulting in the regional
market for a period of one year.
We plan to license the following Canadian markets in 2002: Edmonton,
Kelowna and Vancouver. As of the date of this prospectus we have not licensed
any of these markets.
Other Services
If the results of our Diagnostic Study reveal a need for legal,
accounting, tax, or related professional services, we will refer the small
business owner to firms which specialize in providing these services to small
and mid-sized businesses.
Competition
The leaders in the small and medium business consulting market include
George S. May International and International Business Analysts. Both are
located in Chicago, Illinois and are represented through-out North America.
These large competitors are not regionally represented and are priced higher
than the accounting services that most of the target market works with. In each
territory we will also compete with numerous local and regional firms which
provide business consulting services. We believe our competitive advantage will
be our focus on only small and mid-sized businesses. By focusing on small and
mid-sized businesses, we expect that our analysts and consultants will be more
familiar with the unique range of issues facing companies of this size. As of
the date of this prospectus we were not competing in the consulting industry and
we will not be able to compete until we raise a minimum of $100,000 in capital
and begin operations.
Offices and Employees
We do not have any full-time employees. We have one part-time employee,
John Hromyk, who is our sole officer and director. Mr. Hromyk is involved in
other full-time business activities and acts as an officer on a part-time basis
as needed. Hiring of other management, staff and consultants will occur
incrementally as funds become available and the need arises. We have no
collective bargaining agreements or employment agreements in existence.
We have no material assets and, as such, we do not own any real or
personal property. We currently operate out of rented space located at Suite
174, 3359 - 27th Street, N.E., Calgary, Alberta. We rent this space at a cost of
$100 per month. We believe that this space is sufficient at this time.
Management
Name Age Position
John Hromyk 41 President, Secretary, Treasurer and a
director
John Hromyk has been our officer and director since August 30, 2001. 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.
Each director holds office until his successor is duly elected by the
stockholders. Executive officers serve at the pleasure of the board of
directors. John Hromyk presently devotes a limited amount of his time to our
business. If at least $100,000 is raised in this offering or from other sources,
Mr. Hromyk plans to spend approximately 75% of his time on our business. If less
than $75,000 is raised in this offering, and other funding is not available, Mr.
Hromyk, plans to spend approximately 50% of his time on our business.
Executive Compensation.
The following table sets forth in summary form the compensation received
by our Chief Executive Officer. None of our former or current executive officers
have ever received in excess of $100,000 in compensation during any fiscal year.
Other All
Name and Annual Restricted Other
Principal Fiscal Compen- Stock Options Compen-
Position Year Salary Bonus sation Awards Granted sation
----------- ------ ------ ----- ------ ---------- ------- ------
John Hromyk 2002 -- -- $17,426 -- -- $1,322
President since
August 2001
Amar Bahadoorsingh 2001 -- -- -- -- -- --
President prior to
August 2001
The Other Compensation paid to Mr. Hromyk represents automobile allowance
and rent.
We do not have any consulting or employment agreements with any officer or
director of the Company.
Our board of directors may increase the compensation paid to our officers
depending upon a variety of factors, including the results of our future
operations.
Options Granted During Fiscal Year Ending July 31, 2002:
-------------------------------------------------------
None.
Long Term Incentive Plans - Awards in Last Fiscal Year
None.
Employee Pension, Profit Sharing or other Retirement Plans
We do not have a defined benefit, pension plan, profit sharing or other
retirement plan, although we may adopt one or more of such plans in the future.
Directors' Compensation
At present we do not pay our directors for attending meetings of the board
of directors, although we expect to adopt a director compensation policy in the
future. We have no standard arrangement pursuant to which our directors are
compensated for any services provided as a director or for committee
participation or special assignments.
Except as disclosed elsewhere in this prospectus none of our directors
received any compensation from us during the year ended July 31, 2002.
Transactions with Related Parties and Recent Sales of Unregistered Securities
In March 1999 we sold 1,000,000 shares of our common stock to Century
Capital Management Ltd., a company controlled by Andrew Hromyk, for $100. Andrew
Hromyk is our founder, a former officer and director, and the brother of John
Hromyk.
In October 1999 we issued 7,000,000 shares of our common stock to Brett
Walker, a former officer and director, for services rendered valued at $700.
In May 2000 we acquired, for $1,000, a license to manufacture and sell
water treatment systems from a company controlled by Andrew Hromyk. Under the
terms of the license, we were required to pay a 3% royalty on the gross sales
price on any products sold using the technology subject to the license and a
2.5% royalty on any royalties or fees from the sale or lease of the license to
third parties. During the nine-month period ended April 30, 2002, we abandoned
this license since we decided we would not be able to raise the capital needed
to compete in the water purification industry.
In July 2000 we sold 2,568,200 shares of common stock to twenty-two
investors, all residents of Missouri, for cash in the amount of $25,682.
In November 2000 Mr. Walker sold his 7,000,000 shares of common stock to
Amar Bahadoorsingh.
During the year ended July 31, 2001, we paid management fees of $2,026 to
Brett Walker a former officer and director of the Company and rent of $1,084 to
a company controlled by Andrew Hromyk, a former officer and director of the
Company.
In August 2001 Mr. Bahadoorsingh, who was then our President, sold
6,500,000 shares to John Hromyk for $650 in cash. Following this sale, and
effective August 30, 2001, Mr. Bahadoorsingh resigned as an officer and director
and appointed Mr. Hromyk as a director.
In September 2001 Mr. Bahadoorsingh sold his remaining 500,000 shares to
John Hromyk for $50 in cash. In September 2001 and February 2002 Mr. Hromyk
acquired the 1,000,000 shares originally sold to Century Capital Management for
$100 in cash.
In February, 2002 we received a loan of $10,000 from Jacquie Hromyk, the
wife of John Hromyk, for $20,000 in cash.
In April 2002 Mr. Hromyk acquired 2,054,900 shares of common stock from
ten of the shareholders who purchased shares in the July 2000 private placement.
In April, 2002 we sold 80,000 shares of our common stock to Jacquie
Hromyk, the wife of John Hromyk, for $20,000 in cash.
In May 2002 Mr. Hromyk returned 4,000,000 shares of common stock to the
Company for cancellation.
In May 2002 we sold 150,000 shares of our common stock to two investors
for cash of $37,500.
During the year ended July 31, 2002 we paid $1,889 to the wife of John
Hromyk for administrative services.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of October 31, 2002, information with
respect to the only persons owning beneficially 5% or more of our outstanding
common stock and the number and percentage of outstanding shares owned by each
of our directors and officers and by our officers and directors as a group.
Unless otherwise indicated, each owner has sole voting and investment powers
over his shares of common stock.
Shares of Percent of
Name and Address Common Stock Class
John Hromyk 6,134,900 (1) 90%
PO Box 731
Bragg Creek, Alberta
Canada T0L 0K0
All Officers and Directors 6,134,900 (1) 90%
as a group (1 person)
(1) includes 80,000 shares owned by Mr. Hromyk's wife.
OFFERING BY COVENTURE
By means of this prospectus we are offering to the public up to 1,000,000
shares of our common stock at a price of $0.25 per share. We arbitrarily
determined the $0.25 offering price and this price does not bear any
relationship to our assets, book value or any other generally accepted criteria
of value for investment.
We will offer the shares through our President on a "best efforts" basis.
We will not employ any brokers or sales agents to sell these shares and we will
not compensate any officer or third party for their participation in this
offering. There is no firm commitment by any person to purchase or sell any of
these shares and there is no assurance that any such shares offered will be
sold. All proceeds from the sale of the shares will be promptly delivered to us.
We plan to end the offering on January 31, 2003. However, we may at our
discretion end the offering sooner or extend the offering to February 28, 2003.
We have the right to refuse to accept subscriptions from any person for
any reason whatsoever. No subscription shall be deemed to be binding upon us
until accepted in writing by our President.
SELLING SHAREHOLDERS
This prospectus relates the sale of shares of our common stock by the
persons listed in the following table.
The owners of the common stock to be sold by means of this prospectus are
referred to as the "selling shareholders".
We will not receive any proceeds from the sale of the shares by the
selling shareholders. The selling shareholders may resell the shares they
acquire by means of this prospectus from time to time in the public market. We
will pay all costs of registering the shares offered by the selling
shareholders, estimated to be $25,000. The selling shareholders will pay all
sales commissions and other costs of the sale of the shares offered by them.
Shares to Share
Be Sold Ownership
Shares in this After
Name Owned Offering Offering
Leonard Betz 1,600 1,600 --
James Bommarito 1,600 1,600 --
Vincent Bommarito 1,500 1,500 --
Joseph Buck 1,000 1,000 --
Susan C. Buescher Revocable
Trust DTD 1,500 1,500 --
Cindy Burkholder 20,000 20,000 --
Elaine Burkholder 20,000 20,000 --
Lee Burkholder 20,000 20,000 --
Don Cihelka 70,000 70,000 --
Brian Clark 1,000 1,000 --
Shares to Share
Be Sold Ownership
Shares in this After
Name Owned Offering Offering
Doug Coles 25,000 25,000 --
Helen Cotterchio 30,000 30,000 --
Michael R. Crimmins 1,000 1,000 --
Randy Graf 25,000 25,000 --
Marty Hansen 15,000 15,000 --
Kari Henkel 45,000 45,000 --
James E. Hullverson, Jr. 1,000 1,000 --
James E. Hullverson, Sr. 1,000 1,000 --
Joan Kitz 20,000 20,000 --
Stephen M. Leshe 1,000 1,000 --
Christie Libin 25,000 25,000 --
Sean Libin 25,000 25,000 --
Norman Merry 20,000 20,000 --
Jeanette Moran 35,000 35,000 --
Ken Nilsson 30,000 30,000 --
Roger Placke 1,000 1,000 --
Gerri Polis 50,100 50,100 --
Christopher L. Powers 1,000 1,000 --
Howard Rains 20,000 20,000 --
Terry Rains 30,000 30,000 --
Vivian Shearer 15,000 15,000 --
Christopher Suntrup 1,000 1,000 --
Craig Suntrup 1,000 1,000 --
Jack Walsh 1,000 1,000 --
Brenna Wardrop 15,000 15,000 --
Richard Wuestling IV 1,000 1,000 --
Rozlyn Zuehlke 10,000 10,000 --
---------
583,300
Manner of Sale.
The shares of common stock owned by the selling shareholders may be
offered and sold by means of this prospectus from time to time as market
conditions permit. Since as of the date of this prospectus no market exists for
our common stock, sales by the selling shareholders, until a public market
develops for our common stock, will be made at a price of $0.25 per share. If
and when a public market develops for our common stock, the shares owned by the
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. These shares may be sold by one or
more of the following methods, without limitation:
o a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated.
The selling shareholders and any broker/dealers who act in connection with
the sale of the shares may be deemed to be "underwriters" within the meaning of
ss.2(11) of the Securities Acts of 1933, and any commissions received by them
and any profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. We have agreed
to indemnify the selling shareholders and any securities broker/dealers who may
be deemed to be underwriters against certain liabilities, including liabilities
under the Securities Act as underwriters or otherwise.
We have advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the prospectus delivery requirements under the Securities Act of
1933. We have also advised each selling shareholder that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in the distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. Rule 102 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution. A "distribution" is defined in Rule 102
as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". We have also advised the selling
shareholders that Rule 101 under the 1934 Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the common stock in connection with this offering.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 30,000,000 shares of common stock. As of October
31, 2002 we had 6,718,200 outstanding shares of common stock. Holders of common
stock are each entitled to cast one vote for each share held of record on all
matters presented to shareholders. Cumulative voting is not allowed; hence, the
holders of a majority of the outstanding common stock can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available and, in the
event of liquidation, to share pro rata in any distribution of our assets after
payment of liabilities. The Board of Directors is not obligated to declare a
dividend and it is not anticipated that dividends will ever be paid.
Holders of common stock do not have preemptive rights to subscribe to
additional shares of our common stock. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock.
Preferred Stock
We have authorized to issue up to 5,000,000 shares of preferred stock. Our
Certificate of Incorporation provides that our Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Delaware statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series of
preferred stock. As the Board of Directors has authority to establish the terms
of, and to issue, the preferred stock without shareholder approval, the
preferred stock could be issued to defend against any attempted hostile
takeover.
LEGAL PROCEEDINGS
We are not involved in any pending or threatened legal proceeding.
EXPERTS
The financial statements included in this prospectus for the years ended
July 31, 2002 and 2001 have been included in reliance on the report of N.I
Cameron Inc., independent accountants, given on authority of said firm as
experts in auditing and accounting.
INDEMNIFICATION
Our Bylaws authorize indemnification of any director, officer, employee or
agent against expenses incurred by him in connection with any action, suit, or
proceeding to which he is named a party by reason of his having acted or served
in such capacity, except for liabilities arising from his own misconduct or
negligence in performance of his duty. In addition, even a director, officer,
employee, or agent who was found liable for misconduct or negligence in the
performance of his duty may obtain such indemnification if, in view of all the
circumstances in the case, a court of competent jurisdiction determines such
person is fairly and reasonably entitled to indemnification. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, or controlling persons pursuant to the
foregoing provisions, we have been 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.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of l934 and in accordance therewith are required to file reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Copies of any such reports, proxy statements and
other information filed by us can be inspected at the public reference facility
maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. Copies of such material can be obtained at prescribed rates.
Certain information concerning us is also available at the Internet Web Site
maintained by the Securities and Exchange Commission at www.sec.gov. We have
filed with the Securities and Exchange Commission a Registration Statement on
Form SB-2 (together with all amendments and exhibits) under the Securities Act
of 1933, as amended (the "Act"), with respect to the Securities offered by this
prospectus. This prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Securities and Exchange Commission. For
further information, reference is made to the Registration Statement.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Financial Statements
July 31, 2002 and July 31, 2001
REPORT OF INDEPENDENT AUDITOR
To the Stockholders of
Coventure International Inc.
(formerly Liquidpure Corp.)
We have audited the accompanying consolidated balance sheets of Coventure
International Inc. (a development stage enterprise) as of July 31, 2002 and 2001
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended July 31, 2002 and 2001 and for each
of the periods from March 31, 1999 (date of incorporation) to July 31, 2002 and
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Coventure
International Inc. at July 31, 2002 and 2001, and the results of its operations
and its cash flows for the years ended July 31, 2002 and July 31, 2001 and for
each of the periods from March 31, 1999 (date of incorporation) to July 31, 2002
and 2001, in conformity with accounting principles generally accepted in the
United States.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage, has no
established source of revenue and is dependent on its ability to raise capital
from stockholders or other sources to sustain operations. These factors, along
with other matters as set forth in Note 1, raise doubt that the Company will be
able to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
N.I. Cameron Inc. (signed)
Vancouver, Canada, CHARTERED ACCOUNTANTS
October 10, 2002
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Balance Sheets
(expressed in U.S. dollars)
ASSETS
July 31 July 31
2002 2001
----------------------------
CURRENT
Cash $ 232 $ 301
Accounts receivable 1,259 -
-----------------------------
1,491 301
-----------------------------
PROPERTY, PLANT AND EQUIPMENT, at cost (Note 2)
Computer equipment 875 -
Less: accumulated depreciation 109 -
-----------------------------
766 -
-----------------------------
LICENSE, at cost (Note 4) - 1,000
--------------------------------
$ 2,257 $ 1,301
============================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 16,035 $ 3,229
Advances from stockholder (Note 4) 10,000 -
----------------------------
26,035 3,229
----------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Share capital (Note 3)
Common stock - $0.0001 par value
30,000,000 authorized; 6,718,200 issued and
outstanding (2001 - 10,568,200) 672 1,057
Preferred stock - $0.0001 par value
5,000,000 authorized
Additional paid-in capital 63,310 25,425
Deficit accumulated in the development stage (87,760) (28,410)
---------------------------
(23,778) (1,928)
$ 2,257 $ 1,301
=======================
The accompanying notes are an integral part of these consolidated financial
statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in U.S. dollars)
Period from Period from
March 31, 1999 March 31, 1999
(date of (date of
Year Ended Year Ended incorporation) incorporation)
July 31, July 31, to July 31, to July 31,
2002 2001 2002 2001
--------------------------------------------------------------
REVENUE $ 2,678 $ - $ 2,678 $ -
--------------------------------------------------------------
EXPENSES
Professional fees
18,232 9,549 30,052 11,820
Management fees 17,426 2,026 21,505 4,079
Administration 11,197 5,758 18,358 7,161
Consulting fees 9,000 - 14,350 5,350
Advertising and promotion 5,064 - 5,064 -
Write-off of impaired asset 1,000 - 1,000 -
(Note 4)
Depreciation 109 - 109 -
-------------------------------------------------------------
62,028 17,333 90,438 28,410
-------------------------------------------------------------
LOSS FROM OPERATIONS $(59,350) $ (17,333) $(87,760) $ (28,410)
=============================================================
FOR THE PERIOD
LOSS PER SHARE - Basic and diluted $ (0.006) $ (0.002)
=========================
WEIGHTED AVERAGE NUMBER 9,745,460 10,568,200
=========================
OF SHARES OUTSTANDING
The accompanying notes are an integral part of
these consolidated financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(expressed in U.S. dollars)
Deficit
Accumulated
Common Stock Additional in the
Number of Paid-In Development
Shares Amount Capital Stage Total
------------------------------------------------------------
Issuance of common stock 1,000,000 $ 100 $ - $ - $ 100
Loss for the period - - - (638) (638)
------------------------------------------------------------
Balance, July 31, 1999 1,000,000 100 - (638) (538)
Issuance of common stock 9,568,200 957 25,425 - 26,382
Loss for the Year - - - (10,439) (10,439)
------------------------------------------------------------
Balance, July 31, 2000 10,568,200 1,057 25,425 (11,077) 15,405
Loss for the Year - - - (17,333) (17,333)
-----------------------------------------------------------
Balance, July 31, 2001 10,568,200 1,057 25,425 (28,410) (1,928)
Issuance of common stock 150,000 15 37,485 - 37,500
Common stock cancelled (4,000,000) (400) 400 - -
Loss for the Year - - - (59,350) (59,350)
------------------------------------------------------------
6,718,200 $ 672 $ 63,310 $(87,760) $ (23,778)
============================================================
The accompanying notes are an integral part of
these consolidated financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in U.S. dollars)
Period from Period from
March 31, 1999 March 31, 1999
(date of (date of
Year Ended Year Ended incorporation) incorporation)
July 31, July 31, to July 31, to July 31,
2002 2001 2002 2001
--------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the Period $ (59,350) $ (17,333) $ (87,760) $ (28,410)
Adjustments to reconcile net loss
to net cash used
in operating activities
Write-off of impaired asset 1,000 - 1,000 -
Depreciation 109 - 109 -
---------------------------------------------------------------
(58,241) (17,333) (86,651) (28,410)
Changes in operating assets and
liabilities
Accounts receivable (1,259) - (1,259) -
Accounts payable and accrued 12,806 1,126 16,035 3,229
liabilities
--------------------------------------------------------------
Net cash used in operating (46,694) (16,207) (71,875) (25,181)
activities -----------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, plant and (875) - (875) -
equipment
Purchase of license - - (1,000) (1,000)
--------------------------------------------------------------
Net cash used in investing (875) - (1,875) (1,000)
activities -------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of share capital 37,500 - 63,982 26,482
Advances from stockholders 10,000 - 10,000 -
--------------------------------------------------------------
Net cash provided by financing 47,500 - 73,982 26,482
activities --------------------------------------------------------------
NET CHANGE IN CASH DURING THE PERIOD (69) (16,207) 232 301
CASH AT BEGINNING OF PERIOD 301 16,508 - -
---------------------------------------------------------------
CASH AT END OF PERIOD $ 232 $ 301 $ 232 $ 301
===============================================================
The accompanying notes are an integral part of
these consolidated financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
July 31, 2002
(expressed in U.S. dollars)
1. FORMATION AND BUSINESS OF THE COMPANY
Coventure International Inc. (the "Company") was incorporated in Delaware,
U.S.A. on March 31, 1999 as Bullet Environmental Systems, Inc. and changed
its name on May 25, 2000 to Liquidpure Corp. On February 14, 2002, the
Company changed its name to Coventure International Inc.
The Company is a development stage enterprise engaged in the business of
providing management consulting products and services through an eventual
network of regionally licensed operators in North America. The Company's
services will include strategic analysis, planning, consulting and
coaching. To date the Company has not commenced significant operational
activities.
These financial statements include the accounts of the Company and its
wholly-owned subsidiary Coventure Canada Inc. (the "Subsidiary"). The
Subsidiary was incorporated in the Province of Alberta, Canada on February
5, 2002.
Going concern
The accompanying financial statements have been presented assuming the
Company will continue as a going concern. At July 31, 2002, the Company had
accumulated $87,760 in losses and had no material revenue producing
operations. At the date of this report, the Company's ability to continue as
a going concern is dependent upon its ability to raise additional capital,
achieve profitable operations or merge with a revenue-producing venture
partner.
2. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
The Company recognizes revenue in accordance with applicable accounting
regulations. Accordingly, revenues from services are recognized when all
significant contractual obligations have been satisfied and collection is
reasonably assured.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from these estimates.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
July 31, 2002
(expressed in U.S. dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Income taxes
The Company uses the liability method of accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on the
difference between financial statement and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance in respect of amounts considered by management
to be less likely than not of realization in future periods.
Foreign currency translation
Unless otherwise stated, all amounts are in United States dollars. The
functional currency of the Company and its Subsidiary is the Canadian dollar.
Hence, all asset and liability amounts denominated in Canadian dollars have been
translated using the exchange rate as at July 31, 2002 and all expenses have
been translated using the average exchange rate for each month. The rates used
were as follows:
(equivalent Cdn $ per U.S. $)
2002 2001
---- ----
July 31 rate .6318 .6525
Depreciation
Depreciation of property, plant and equipment is provided for on the
straight-line basis over the estimated useful life of the assets, estimated to
be four years. One-half the normal rate is taken in the year of acquisition.
3. SHARE CAPITAL
Holders of the common stock are entitled to one vote per share and share
equally in any dividends declared and distributions on liquidation.
During the year ended July 31, 2002, the Company issued 150,000 shares of
common stock at a price of $0.25 per share.
During the year ended July 31, 2002, 4,000,000 common shares were returned to
the treasury of the Company and were cancelled.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
July 31, 2002
(expressed in U.S. dollars)
4. RELATED PARTY TRANSACTIONS
a) During the year, the Company paid management fees of $17,426 (2001 - $ 0),
rent of $945 (2001 - $0) and automobile allowance of $377 (2001 - $0) to a
director and officer of the Company. In addition, the Company paid $1,889
(2001 - $0) to the spouse of this director and officer for administrative
services. During the period ended July 31, 2001, the Company paid
management fees of $2,026 to a former director and officer of the Company
and rent of $1,084 to a company controlled by a former director and officer
of the Company. These transactions have been recorded using the exchange
amount.
b) The advances from a stockholder are interest-free and repayable on demand.
c) In May 2000, the Company acquired a non-exclusive commercial license from a
company controlled by a former director and officer of the Company for
$1,000. The Company experienced a lack of co-operation from the engineering
firm who owned the patent to the apparatus under license. The Company was
not provided with the technical information it required to start
manufacturing any of the systems for which it was contractually permitted.
Further, due to the capital market decline in 2001, it proved impossible to
execute the business plan. As a result, in October 2001, the Company
abandoned this license.
5. FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments consist of cash, accounts receivable,
accounts payable and advances from stockholder. It is management's opinion
that the Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair value of these
financial instruments approximate their carrying values.
Coventure 10-K fins July 01-02 10-24-02
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY ....................................
FORWARD LOOKING STATEMENTS.............................
RISK FACTORS...........................................
USE OF PROCEEDS........................................
MARKET FOR COMMON STOCK ...............................
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION.............................
BUSINESS...............................................
MANAGEMENT ............................................
PRINCIPAL SHAREHOLDERS.................................
OFFERING BY COVENTURE..................................
SELLING SHAREHOLDERS...................................
DESCRIPTION OF SECURITIES..............................
LEGAL
PROCEEDINGS............................................
EXPERTS
.........................................................
INDEMNIFICATION ........................................
AVAILABLE INFORMATION...................................
FINANCIAL STATEMENTS....................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by Coventure. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
offered in any jurisdiction to any person to whom it is unlawful to make an
offer by means of this prospectus.
PART II
Information Not Required in Prospectus
Item 24. Indemnification of Officers and Directors The Delaware General
Corporation Law and Coventure's Certificate of Incorporation and Bylaws provide
that we may indemnify any and all of its officers, directors, employees or
agents or former officers, directors, employees or agents, against expenses
actually and necessarily incurred by them, in connection with the defense of any
legal proceeding or threatened legal proceeding, except as to matters in which
such persons shall be determined to not have acted in good faith and in our best
interest.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by us in
connection with the issuance and distribution of the securities being registered
hereunder. No expenses shall be borne by the selling stockholder. All of the
amounts shown are estimates, except for the SEC Registration Fee.
SEC Filing Fee $ 39
Blue Sky Fees and Expenses 800
Printing and Engraving Expenses 500
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 3,000
Miscellaneous Expenses 1,000
---------
TOTAL $30,339
=======
All expenses other than the SEC filing fee are estimated.
Item 26. Recent Sales of Unregistered Securities.
In March 1999 Coventure sold 1,000,000 shares of common stock to Century
Capital Management Ltd., a company controlled by a former president and
director, for $100.
In October 1999 Coventure issued 7,000,000 shares of common stock to Brett
Walker, a former officer and director, for services rendered valued at $700.
The sales of the Company's common stock referred to above were exempt from
registration by means of Section 4(2) of the Securities Act of 1933 as
transactions by an issuer not involving a public offering. All of these shares
were acquired for investment purposes only and without a view to distribution.
The persons who acquired these shares were fully informed and advised about
matters concerning the Company, including its business, financial affairs and
other matters. The purchasers acquired the shares for their own accounts. The
certificates evidencing the shares bear legends stating that they may not be
offered, sold or transferred other than pursuant to an effective registration
statement under the Securities Act of 1933, or pursuant to an applicable
exemption from registration. No underwriters were involved with the sale of the
shares of common stock and no commission or other forms of remuneration were
paid to any person in connection with the sale of these shares. All of these
shares are "restricted" securities as defined in Rule 144 of the Securities and
Exchange Commission.
In July 2000 Coventure sold 2,568,200 shares of common stock to twenty-two
investors, all residents of Missouri, for cash in the amount of $25,682. These
sales were exempt from registration pursuant to Rule 504 of the Securities Act
of 1933. At the time of these sales Coventure was not subject to the reporting
requirements of the Securities Exchange Act of 1934 and was not an investment
company. The amount of the securities sold was less than $1,000,000.
During April and May 2002 Coventure sold 150,000 shares of common stock to
two investors, both of whom reside in Alberta, Canada for cash in the amount of
$37,500. These sales were exempt from registration pursuant to Regulation S of
the Securities and Exchange Commission. In making these sales, Coventure
complied with the provisions of Rules 903(a) and 903(b)(3) of the Securities and
Exchange Commission.
Item 27. Exhibits
The following Exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name Page
Exhibit 3 Articles of Incorporation and Bylaws (1)
------------
Exhibit 4 Instruments Defining the Rights of
Security Holders (2)
------------
Exhibit 5 Opinion of Counsel
------------------
Exhibit 21 Subsidiaries ____________
Exhibit 23.1 Consent of attorneys
------------------
Exhibit 23.2 Consent of accountants ____________
(1) Incorporated by reference to the same exhibit filed with the Company's
registration statement on Form 10-SB.
(2) Included as part of Exhibit 3.
Item 28. Undertakings
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 l0 (a)(3) of the
Securities Act of l933;
(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 set forth in the Registration
Statement; and Notwithstanding the forgoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospects filed with the
Commission pursuant to Rule 424(b)) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the maximum aggregated
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(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, including
(but not limited to) any addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of l933, 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.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of l933 may be permitted to directors, officers and controlling
persons of the Registrant, 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 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 or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Calgary, Alberta on the
11th day of November, 2002.
COVENTURE INTERNATIONAL INC.
By: /s/ John Hromyk
-------------------------------------
John Hromyk, President, Chief Operating
Officer, Principal Financial Officer and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ John Hromyk
John Hromyk Director November 11, 2002
COVENTURE INTERNATIONAL INC.
FORM SB-2/A
AMENDMENT NO. 2
EXHIBITS