UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 17, 2006
CHINA NATURAL GAS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-31539 98-0231607
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
Tang Xing Shu Ma Building, Suite 418
Tang Xing Road
Xian High Tech Area
Xian, Shaanxi Province
China
(Address of principal executive offices) (zip code)
86-29-88323325
(Registrant's telephone number, including area code)
Copies to:
Marc J. Ross, Esq.
Thomas A. Rose, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
On January 17, 2006, China Natural Gas, Inc. (the "Company"), entered into
securities purchase agreements with an accredited investor and completed the
sale of $2,824,802 of units. The units contained an aggregate of 1,008,857
shares of common stock and 274,633 common stock purchase warrants. Each common
stock purchase warrant is exercisable for a period of three years at an exercise
price of $3.60 per share. Pursuant to the terms of the warrant, each investor
has contractually agreed to restrict its ability to exercise the warrants to an
amount which would not exceed the difference between the number of shares of
common stock beneficially owned by the holder or issuable upon exercise of the
warrant held by such holder and 9.9% of the outstanding shares of common stock
of the Company.
The Company is obligated to file a registration statement registering the
resale of shares of the Company's common stock and those issuable upon exercise
of the warrants. If the registration statement is not filed within 45 days from
the date of investment, or declared effective within 90 days thereafter (135
days if the registration statement receives a full review by the SEC), or if the
registration is suspended other than as permitted in the registration rights
agreement between the Company and the investors, the Company is obligated to pay
the investors certain fees in the amount of 1% of the aggregate amount invested,
per month, and the obligations may be deemed to be in default.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
--------------------------------------------------
10.1 Form of Securities Purchase Agreement*
10.2 Form of Common Stock Purchase Warrant*
10.3 Form of Registration Rights Agreement*
* Previously filed with the Company's Current Report on Form 8-K, Date of Event:
January 6, 2006, and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHINA NATURAL GAS, INC.
Dated: January 19, 2006 By: /s/ MINQING LU
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Minqing Lu,
Chief Executive Officer