SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended April 30, 2002
Commission File Number: 0-31539
COVENTURE INTERNATIONAL INC.
----------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 98-0231607
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(Jurisdiction of Incorporation) (I.R.S. Employer
Identification No.)
Suite 174, 3559 - 27th Street N.E.
Calgary, Alberta, Canada T1Y 5E4
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (403) 949-5621
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.) Yes
[x ] No [ ]
As of May 31, 2002 the Company had 6,718,200 shares of common stock issued and
outstanding.
PART I: FINANCIAL INFORMATION
To simplify the language in this document, Coventure International Inc. is
referred to as
"We" or the "Company".
Item 1. Financial Statements
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Financial Statements
April 30, 2002 and April 30, 2001
(Unaudited)
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
Coventure International Inc.
(formerly Liquidpure Corp.)
Calgary, AB Canada
We have reviewed the accompanying consolidated balance sheet of Coventure
International Inc. as at April 30, 2002, the related consolidated statement of
operations for the three-month and nine-month periods then ended, and the
related consolidated statement of cash flows for the nine-month period then
ended. These financial statements are the responsibility of the Corporation's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
N.I. Cameron Inc.
Vancouver, Canada, CHARTERED ACCOUNTANTS
June 11, 2002
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Balance Sheet
April 30, 2002
(expressed in U.S. dollars)
ASSETS
April 30, July 31,
2002 2001
-----------------------------
(Unaudited)
CURRENT
Cash $ 2,619 $ 301
Accounts receivable 282 -
------------------------------------
2,901 301
LICENSE, at cost (Note 4) - 1,000
------------------------------------
$ 2,901 $ 1,301
===================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 12,159 $ 3,229
Advances from stockholder (Note 4) 10,000 -
----------------------------------
22,159 3,229
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STOCKHOLDERS' EQUITY (DEFICIT)
Share capital (Notes 3 and 6)
Common stock - $0.0001 par value
30,000,000 authorized; 10,568,200 issued and
outstanding 1,057 1,057
Preferred stock - $0.0001 par value
5,000,000 authorized
Share subscriptions received (Note 3) 20,000 -
Additional paid-in capital 25,425 25,425
Deficit accumulated in the development stage (65,740) (28,410)
-------------------------------
(19,258) (1,928)
---------------------------------
$ 2,901 $ 1,301
=================================
SUBSEQUENT EVENT (Note 6)
The accompanying notes are an integral part of these financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Statements of Operations
For the Nine-Month and Three-Month Periods Ended
April 30, 2002 and April 30, 2001
(Unaudited)
(expressed in U.S. dollars)
Three Three Nine Nine Period Period
Months Months Months Months from from
Ended Ended Ended Ended March 31, March 31,
April 30, April 30, April 30, April 30, 1999 1999
2002 2001 2002 2001 (date of (date of
incorporation) incorporation)
to April 30, to April 30,
2002 2001
--------------------------------------------------------------------
REVENUE $ 2,678 $ - $ 2,678 $ - $ 2,678 $ -
-------------------------------------------------------------------
EXPENSES
Professional fees 12,673 1,071 12,673 7,289 24,493 9,560
Management fees 11,340 - 12,598 2,026 16,677 4,079
Administration
4,990 419 7,049 5,331 14,210 6,734
Consulting 4,500 - 4,500 - 9,850 5,350
Advertising and 2,188 - 2,188 - 2,188 -
promotion $
Loss on abandonment - - 1,000 - 1,000 -
of license
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(35,691) (1,490) (40,008) (14,646) (68,418) (25,723)
-------------------------------------------------------------------
LOSS FROM OPERATIONS $(33,013) $(1,490) $(37,330) $(14,646) $ (65,740) $ (25,723)
==================================================================
LOSS PER SHARE -
Basic and diluted $ (0.003) $(0.000) $ (0.004) $ (0.001)
=======================================
=======================================
The accompanying notes are an integral part of these financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Statements of Cash Flows
For the Nine-Month Periods Ended
April 30, 2002 and April 30, 2001
(Unaudited)
(expressed in U.S. dollars)
Nine Nine Period From Period From
Months Months March 31, March 31,
Ended Ended 1999 1999
April 30, April 30, (date of (date of
2002 2001 incorporation) incorporation)
to April 30, to April 30,
2002 2001
--------------------------------------------------------
Cash flows used in operating
activities
Net loss for the period $(37,330) $ (14,646) $ (65,740) $ (25,723)
Adjustment to reconcile net loss to
net cash used in operating activities
Loss on abandonment of license 1,000 - 1,000 -
-----------------------------------------------------
(36,330) (14,646) (64,740) (25,723)
Changes in operating assets and
liabilities
Accounts receivable (282) - (282) -
Accounts payable 8,930 (605) 12,159 1,498
-----------------------------------------------------
Net cash used in operating activities (27,682) (15,251) (52,863) (24,225)
-----------------------------------------------------
Investing activities
Purchase of license - - (1,000) (1,000)
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Net cash used in investing activities - - (1,000) (1,000)
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Financing activities
Advances from stockholder 10,000 - 10,000 -
Issuance of share capital - - 26,482 26,482
Deposit on shares to be issued 20,000 - 20,000 -
-----------------------------------------------------
Net cash provided by financing 30,000 - 56,482 26,482
activities
-----------------------------------------------------
Increase (decrease) in cash during 2,318 (15,251) 2,619 1,257
the period
Cash at beginning of period 301 16,508 - -
-----------------------------------------------------
Cash at end of period $ 2,619 $ 1,257 $ 2,619 $ 1,257
=====================================================
The accompanying notes are an integral part of these financial statements.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
April 30, 2002
(Unaudited)
(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 any operational activities other than the
development of its business plan and the selection and acquisition of the domain
name.
These financial statements include the accounts of the Company and its
wholly-owned subsidiary Coventure Canada Ltd. (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 April 30, 2002, the Company had accumulated
$65,740 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 or merge with a
revenue-producing venture partner.
2. SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles in the United States
and Form 10-QSB requirements. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the
accompanying interim financial statements contain all the adjustments
(consisting of only normal recurring accruals) necessary to present fairly the
Company's financial position as of April 30, 2002 and its result of operations
and its cash flows for the nine-month period ending April 30, 2002. The results
of operations for the interim period are not necessarily indicative of the
results to be expected for the fiscal year. For further information, refer to
the financial statements and related footnotes for the year ended July 31, 2001
included in the Company's annual report on Form 10-KSB.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
April 30, 2002
(Unaudited)
(expressed in U.S. dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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.
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 April 30, 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. $)
April 30, 2002 rate .6376
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 period, the Company issued a private placement offering memorandum to
issue up to 1,000,000 common shares at a price of $0.25 per share. As at April
30, 2002, the Company had received share subscriptions totaling $20,000 to
purchase 80,000 shares. Subsequent to April 30, 2002, the Company received an
additional $17,500 to purchase 70,000 shares. All shares subscribed have been
issued subsequent to April 30, 2002.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
April 30, 2002
(Unaudited)
(expressed in U.S. dollars)
4. RELATED PARTY TRANSACTIONS
a) During the period, the Company paid management fees of $12,598 (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 April 30, 2001, the Company paid
management fees of $2,026 to a former director and officer of the Company
and rent of $1,064 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) During a prior period, the Company acquired a non-exclusive commercial
license from a company controlled by a former director and officer of the
Company. During the nine-month period ended April 30, 2002, 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.
6. SUBSEQUENT EVENT
Subsequent to April 30, 2002, 4,000,000 common shares were returned to the
treasury of the Company.
Item 2. Management's Discussion and Analysis or Plan of Operations
This report contains certain forward-looking statements. The Company wishes to
advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the ability of the Company to search for appropriate business
opportunities and subsequently acquire or merge with such entity, to meet its
cash and working capital needs, the ability of the Company to maintain its
existence as a viable entity, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.
The Company plans to be a North American provider of management consulting
products and services to a network of regionally licensed operators.
In April 2002 the Company issued a private placement offering memorandum to sell
a maximum of 1,000,000 common shares at a price of $0.25 per share. As at April
30, 2002, the Company had received share subscriptions for $20,000 to purchase
80,000 common shares, which has enabled us to commence operations. Subsequent to
April 30, 2002 the Company received an additional $17,500 to purchase 70,000
common shares
The drafting and design of the Coventure regional sales and marketing materials
continued over the period. Final design and print production was initiated in
early May. The Coventure website (www.coventure.com) was, at the end of April
three-quarters complete, and went live in mid-May.
A test of the Coventure Analysis methodologies was tested 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 how the
presentation of the results to the client is approached. These adjustments are
expected to result in the increased amount of sales of Coventure products and
services following the Analysis.
Over the period the advertising of Coventure services was tested in a selection
of regional publications targeting small business owners. Employment advertising
for an Area Manager to engage in new business development in the test market was
commenced. Two potential candidates were identified and brought in for second
round interviews and a selection for the position was made in May.
During the next twelve months, the Company plans to: (1) raise $250,000 through
the sale of equity securities via a private placement before July 31, 2002; (2)
refine, market and expand the Company's methodologies and initiate its licensing
program, and (3) hire, train and implement outside sales personnel, analysts and
consultants.
During the nine months ended April 30, 2002 the Company's operations used
$27,682 in cash. Operating capital was provided by the sale of the Company's
common stock ($20,000) and a loan of $10,000 from John Hromyk, an officer and
director of the Company.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities
On May 17, 2002 a total of 150,000 common shares were issued to two
individuals for $37,500 cash received through private placements. These
transactions were exempt from registration pursuant to Rule 903 of the
Securities and Exchange Commission.
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holdings - None
Item 5. Other Information
In May, 2002 the President of the Company, John Hromyk, returned
4,000,000 common shares to the authorized and unissued treasury of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarterly Period ended April 30, 2002, has been
signed below by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
Dated: June 14, 2002
COVENTURE INTERNATIONAL INC.
A Delaware Corporation
By: /s/John Hromyk
----------------------------
Title: President and Principal Financial
and Accounting Officer
Coventure 10-QSB draft #2 changes 6-14-02