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 January 31, 2003
Commission File Number: 0-31539
COVENTURE INTERNATIONAL INC.
(Exact name of small business issuer as specified in its charter)
Delaware 98-0231607
-------- ----------
(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 March 11, 2003 the Company had 6,718,200 shares of common stock issued and
outstanding.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Financial Statements
January 31, 2003 and January 31, 2002
(Unaudited)
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Consolidated Balance Sheets
(expressed in U.S. dollars)
ASSETS
January 31, July 31,
2003 2002
-------------------------------
(Unaudited)
CURRENT
Cash $ 556 $ 232
Accounts receivable 2,152 1,259
-----------------------------------
2,708 1,491
-----------------------------------
PROPERTY, PLANT AND EQUIPMENT, at cost (Note 2)
Computer equipment 583 875
Less: accumulated depreciation 145 109
------------------------------------
438 766
------------------------------------
$ 3,146 $ 2,257
==================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 57,933 $ 16,035
Customer deposits 657 -
Advances from stockholder (Note 5) 10,000 10,000
Note payable (Note 3) 6,681 -
----------------------------------
75,271 26,035
---------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Share capital (Note 4)
Common stock - $0.0001 par value 30,000,000
authorized; 6,718,200 issued and
outstanding 672 672
Preferred stock - $0.0001 par value
5,000,000 authorized
Additional paid-in capital 63,310 63,310
Deficit accumulated in the development stage (136,107) (87,760)
----------------------------
(72,125) (23,778)
---------------------------------
$ 3,146 $ 2,257
=================================
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
For the Three-Month and Six-Month Periods Ended
January 31, 2003 and January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
Three Three Six Six Period From Period From
Months Months Months Months March 31, March 31,
Ended Ended Ended Ended 1999 1999
January 31, January 31, January 31, January 31, (date of (date of
2003 2002 2003 2002 incorporation incorporation)
to January 31, to January 31,
2003 2002
-----------------------------------------------------------------------------------
Revenue $ 3,971 $ - $ 3,971 $ - $ 6,649 $ -
-----------------------------------------------------------------------------------
Expenses
Professional fees 36,674 - - 67,535 11,820 37,483
Consulting 4,500 - 9,000 - 23,350 5,350
Management fees 1,190 1,258 1,190 1,258 22,695 5,337
Administration 2,319 1,669 2,754 2,059 21,112 9,220
Advertising and 272 - 272 - 5,336 -
promotion
Sub-contract 1,595 - 1,595 - 1,595 -
Write-off of
impaired
Asset (Note 5) - - - 1,000 1,000 1,000
Gain on sale of - - (48) - (48) -
equipment
Depreciation 36 - 72 - 181 -
-----------------------------------------------------------------------------------
46,586 2,927 52,318 4,317 142,756 32,727
-----------------------------------------------------------------------------------
Loss from Operations $(42,615) $(2,927) $(48,347) $ (4,317) $ (136,107) $ (32,727)
===================================================================================
Loss per Share-
Basic and diluted $ (0.01) $ (0.00) $ (0.01) $ (0.00)
=================================================
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 Six-Month Periods Ended
January 31, 2003 and January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
Six Six Period From Period From
Months Months March 31, March 31,
Ended Ended 1999 1999
January 31, January 31, (date of (date of
2003 2002 incorporation) incorporation)
to January 31, to January 31,
2003 2002
------------------------------------------------------
Cash flows used in operating
activities
Net loss for the period $ (48,347) $ (4,317) $ (136,107) $ (32,727)
Adjustments to reconcile net
loss to net cash used in
operating activities
Depreciation 72 - 181 -
Write-off of impaired asset - 1,000 1,000 1,000
Gain on sale of equipment (48) - (48) -
Changes in operating assets and
liabilities
Accounts receivable (893) - (2,152) -
Accounts payable 41,898 (1,367) 57,933 1,862
Customer deposits 657 - 657 -
----------------------------------------------------
Net cash used in operating activities (6,661) (4,684) (78,536) (29,865)
----------------------------------------------------
Investing activities
Proceeds on sale of equipment 304 - 304 -
Purchase of license - - (1,000) (1,000)
Purchase of property, plant and - - (875) -
equipment
----------------------------------------------------
Net cash provided by (used in) 304 - (1,571) (1,000)
investing activities
----------------------------------------------------
Financing activities
Increase in note payable 6,681 - 6,681 -
Advances from stockholder - 7,500 10,000 7,500
Issuance of share capital - - 63,982 26,482
----------------------------------------------------
Net cash provided by financing 6,681 7,500 80,663 33,982
activities
----------------------------------------------------
Increase in cash during the period 324 2,816 556 3,117
Cash at beginning of period 232 301 - -
----------------------------------------------------
Cash at end of period $ 556 $ 3,117 $ 556 $ 3,117
====================================================
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
January 31, 2003
(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 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 January 31, 2003, the Company
had accumulated $136,107 in losses and had no material revenue producing
operations. At present, 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
General Information
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 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 January 31, 2003 and its results of
operations and its cash flows for the six-month period ended January 31,
2003. 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 Company's financial statements and related
footnotes for the year ended July 31, 2002.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
January 31, 2003
(Unaudited)
(expressed in U.S. dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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.
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 January 31, 2003 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. $)
January 31 rate .6572
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. NOTE PAYABLE
The note payable is payable on demand and bears no interest.
Coventure International Inc.
(formerly Liquidpure Corp.)
(a development stage enterprise)
Notes to Consolidated Financial Statements
January 31, 2003
(Unaudited)
(expressed in U.S. dollars)
4. 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.
5. RELATED PARTY TRANSACTIONS
a) The advances from a stockholder are interest-free and repayable on demand.
b) 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.
c) During the six-month period ended January 31, 2003, the Company paid
management fees of $1,190 (2002 - $1,258) to a director and officer of the
Company. These transactions have been recorded at the exchange amount.
Accounts payable include $3,543 (2002 - $195) due to the same director and
officer.
6. FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments consist of cash, accounts receivable,
accounts payable, note 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.
Item 2. Management's Discussion and Analysis or Plan of Operations
The Company plans to provide consulting services to small and medium sized
businesses in North America through a network of regionally licensed operators.
The consulting services will be designed to improve a client's profitability
through strategic analysis, planning, consulting and ongoing evaluation. The
Company's core services will attempt to identify inefficiencies and trouble
spots in a business before they cause significant problems.
The Company has 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 the Company is refining the
process of presenting the results to its client. The Company's website,
www.coventure.com became active in May 2002.
The Company has not commenced significant operational activities, however, it is
providing consulting services to clients in the local Calgary, Alberta region.
The Company will be able to expand consulting services once it raises $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 the Company's products, services, and licensing program.
The Company does not know when it will obtain the $100,000 in capital. The
Company's initial focus will be on the development of Canadian and American
markets.
During the six months ended January 31, 2003 the Company's operations used
$6,661 in cash. Operating capital was provided from consulting fees received for
services provided to clients and a loan from a third party.
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 ability
of the Company 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.
Item 3. Not applicable
Item 4. Controls And Procedures
Based on the evaluation of the Company's disclosure controls and procedures by
John Hromyk, the Company's President, Principal Financial Officer and Principal
Accounting Officer, as of a date within 90 days of the filing date of this
quarterly report, such officers have concluded that the Company's disclosure
controls and procedures are effective in ensuring that information required to
be disclosed by the Company in the reports that it files or submits under the
Securities and Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported, within the time period specified by the Securities and
Exchange Commission's rules and forms.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II: OTHER INFORMATION
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 January 31, 2003, has been
signed below by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
Dated: March 17, 2003
COVENTURE INTERNATIONAL INC.
/s/ John Hromyk
By: John Hromyk
Title: President, Principal Financial
Officer and Principal Accounting Officer
CERTIFICATION
In connection with the Quarterly Report of Coventure International Inc.
(the "Company") on Form 10-QSB for the period ending January 31, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, John Hromyk, the President, Principal Financial Officer and Principal
Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to
the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects the financial condition and results of the Company.
Date: March 17, 2003
By: /s/ John Hromyk
---------------
John Hromyk, President, Principal
Financial Officerand Principal Accounting
Officer
CERTIFICATION
I, John Hromyk, certify that:
1. I have reviewed this Quarterly Report on Form 10-QSB of Coventure
International Inc.;
2. Based on my knowledge, this Quarterly Report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this Quarterly Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this Quarterly Report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the Registrant, and I have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Quarterly Report (the "Evaluation Date"); and
c. presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the Registrant's
auditors and the audit committee of Registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. I have indicated in this Quarterly Report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: March 17, 2003
/s/ John Hromyk
---------------------------------
John Hromyk, President, Principal
Financial Officer and Principal
Accounting Officer