Unassociated Document
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c) of the
Securities
Exchange Act of 1934
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Preliminary
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Definitive
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(1)
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Title
of each class of securities to which transaction applies: Common
Stock
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11:
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(1)
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schedule or registration statement no.:
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Date
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China
Natural Gas, Inc.
Tang
Xing Shu Ma Building, Suite 418, Tang Xing Road, Xian, Shaanxi Province,
China
Tel
: 86-29-88323325
NOTICE
OF ACTION BY
WRITTEN
CONSENT OF SHAREHOLDERS
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
To
our
Shareholders:
This
Information Statement is furnished by the Board of Directors of China Natural
Gas, Inc., a Delaware corporation (the “Company”), to holders of record of the
Company’s Common Stock, $0.0001 par value per share, at the close of business on
September 20, 2007, pursuant to Rule 14c-2 promulgated under the Securities
Exchange Act of 1934, as amended.
The
purpose of this Information Statement is to inform the Company’s shareholders of
an action taken by the written consent of the holders of a majority of the
Company’s voting stock, dated as of August 1, 2007. This Information Statement
shall be considered the notice required under Section 228 of the Delaware
General Corporation Law.
The
action taken by the Company’s shareholders will not become effective until at
least 20 days after the initial mailing of this Information
Statement.
THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS AND
NO SHAREHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN.
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By order of the Board of Directors: |
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/s/
Qinan
Ji |
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Qinan
Ji
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Chief
Executive Officer
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China
Natural Gas, Inc.
Tang
Xing Shu Ma Building, Suite 418, Tang Xing Road, Xian, Shaanxi Province,
China
Tel
: 86-29-88323325
INFORMATION
STATEMENT
PURSUANT
TO SECTION 14
OF
THE SECURITIES EXCHANGE ACT OF 1934
AND
REGULATION 14C AND SCHEDULE 14C THEREUNDER
This
Information Statement is being sent by first class mail to all record and
beneficial owners of the Common Stock, $0.0001 par value, of China Natural
Gas,
Inc., a Delaware corporation, which we refer to herein as “CHNG,” “company,”
“we,” “our” or “us.” The mailing date of this Information Statement is on or
about September 25, 2007.
On
September 20, 2007, the record date for determining the identity of shareholders
who are entitled to receive this Information Statement, 29,145,839 shares of
our
Common Stock were issued and outstanding and no Preferred Stock was issued
and
outstanding. The Common Stock constitutes the sole outstanding class of voting
securities of the Company. Each share of Common Stock entitles the holder
thereof to one vote.
General
Information
On
August
1, 2007, the Company’s
Board
of Directors approved an amendment to the Company’s
Certificate of Incorporation to increase the authorized number of shares of
the
Company’s
Common
Stock from 30,000,000 shares to 45,000,000 shares (the “Amendment”).
On
August 1, 2007, a majority of the holders of the Company’s voting capital stock
approved the Amendment.
The
shareholder approval was granted by written consent, in lieu of a special
meeting of the shareholders. The controlling shareholders have not consented
to
or considered any other corporate action. The shareholders’ approval of the
transactions contemplated by the Amendment was granted in each case subject
to
the filing of an Information Statement with the Securities and Exchange
Commission and delivery of notice to the other shareholders of the
Company.
Because
shareholders holding at least a majority of the voting rights of our outstanding
voting capital stock at the record date have voted in favor of the Amendment,
and have sufficient voting power to approve the transaction through their
ownership of Common Stock, no other shareholder consents will be solicited
in
connection with this Information Statement. Pursuant to Rule 14c-2 under the
Securities Exchange Act of 1934 (the “Exchange Act”), the proposals will not
become effective until a date at least 20 days after the date on which this
Information Statement has been mailed to the shareholders. We anticipate that
the actions contemplated herein will be effected approximately 30 days after
filing of this Information Statement. This Information Statement will serve
as
written notice to shareholders pursuant to Section 228 of the Delaware General
Corporation Law.
The
Company has asked brokers and other custodians, nominees and fiduciaries to
forward this Information Statement to the beneficial owners of the Common Stock
held of record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
The
address of the Company’s principal executive offices is Tang Xing Shu Ma
Building, Suite 418, Tang Xing Road, Xian, Shaanxi Province, China.
NO
VOTE OR OTHER CONSENT OF OUR SHAREHOLDERS IS SOLICITED
IN
CONNECTION WITH THIS INFORMATION STATEMENT.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT
TO SEND US A PROXY.
AMENDMENT
TO THE CERTOFOCATE OF INCORPORATION
On
August
1, 2007, holders of a majority of the Company’s capital stock approved an
amendment to the Company’s Certificate of Incorporation, to increase the number
of authorized shares of the Company’s Common Stock from 30,000,000 to
45,000,000. As of August 1, 2007 (the “Record
Date”), the
Company had
24,215,518 shares of Common Stock issued and outstanding. The Amendment will
allow the Company to issue warrants to purchase up to 692,308 shares of Common
Stock to certain investors pursuant to a Securities Purchase Agreement dated
August 2, 2007 by the Company and the investors named therein. The Board also
believes that the increase in authorized common shares will provide the Company
greater flexibility with respect to the Company’s capital structure for such
purposes as additional equity financing, and stock-based
acquisitions.
Increase
In Authorized Common Stock
The
terms
of the additional shares of Common Stock will be identical to those of the
currently outstanding shares of Common Stock. However, because holders of Common
Stock have no preemptive rights to purchase or subscribe for any unissued stock
of the Company, the issuance of additional shares of Common Stock will reduce
the current stockholders' percentage ownership interest in the total outstanding
shares of Common Stock. This amendment and the creation of additional shares
of
authorized Common Stock will not alter the current number of issued shares.
The
relative rights and limitations of the shares of Common Stock will remain
unchanged under this amendment.
The
increase in the number of authorized but unissued shares would enable the
Company, without further stockholder approval, to issue shares from time to
time
as may be required for proper business purposes, such as raising additional
capital for ongoing operations, business and asset acquisitions, stock splits
and dividends, present and future employee benefit programs and other corporate
purposes.
The
proposed increase in the authorized number of shares of Common Stock could
have
a number of effects on the Company’s stockholders depending upon the exact
nature and circumstances of any actual issuances of authorized but unissued
shares. The increase could have an anti-takeover effect, in that additional
shares could be issued (within the limits imposed by applicable law) in one
or
more transactions that could make a change in control or takeover of the Company
more difficult. For example, additional shares could be issued by the Company
so
as to dilute the stock ownership or voting rights of persons seeking to obtain
control of the Company, even if the persons seeking to obtain control of the
Company offer an above-market premium that is favored by a majority of the
independent stockholders. Similarly, the issuance of additional shares to
certain persons allied with the Company’s management could have the effect of
making it more difficult to remove the Company's current management by diluting
the stock ownership or voting rights of persons seeking to cause such removal.
The Company does not have any other provisions in its Certificate of
Incorporation, bylaws, employment agreements, credit agreements or any other
documents that have material anti-takeover consequences. Additionally, the
Company has no plans or proposals to adopt other provisions or enter into other
arrangements, except as disclosed below, that may have material anti-takeover
consequences. The board of directors is not aware of any attempt, or
contemplated attempt, to acquire control of the Company, and this proposal
is
not being presented with the intent that it be utilized as a type of
anti-takeover device.
Other
than the issuance of warrants to purchase up to 692,308 shares of Common
Stock
pursuant to a Securities Purchase Agreement dated August 2, 2007 by the Company
and the investors named therein, there are currently no other plans,
arrangements, commitments or understandings for the issuance of the additional
shares of Common Stock which are proposed to be authorized.
The
proposed form of Amendment attached as Exhibit
A
hereto
becomes effective upon filing with the Delaware Secretary of State.
DESCRIPTION
OF CAPITAL STOCK
Common
Stock
As
of the
Record Date, there were 30,000,000 shares of Common Stock authorized with a
par
value of $0.0001 per share, of which 24,215,518 shares were issued and
outstanding. Each holder of the Company’s Common Stock is entitled to one vote
for each share held of record on all matters submitted to the vote of
stockholders, including the election of directors.
Holders
of Common Stock of the Company have no preemptive rights to acquire or subscribe
to any of the additional shares of Common Stock.
The
holders of Common Stock are entitled to receive pro rata dividends, when and
as
declared by the board of directors in its discretion, out of funds legally
available. As a result, the payment of such dividends will depend on the
Company’s financial condition, results of operations, capital requirements and
such other factors as the board of directors deems relevant. The Company has
not
declared any dividends since incorporation and does not anticipate doing so
in
the foreseeable future.
Preferred
Stock
As
of the
Record Date, the Company has 5,000,000 shares of Preferred Stock with a par
value of $0.0001 per share, of which no shares were issued and outstanding.
The
board of directors has sole discretion in designating the preferences,
limitations and relative rights of the Preferred Stock.
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED
UPON
None
of
the following persons has any substantial interest, direct or indirect, by
security holdings or otherwise in any matter to be acted upon:
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1.
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any
director
or
officer of our company;
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2.
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any
proposed nominee for election as a director of our company;
and
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3.
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any
associate or affiliate of any of the foregoing
persons.
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The
shareholdings of our directors and officers are listed below in the section
entitled “Security Ownership of Certain Beneficial Owners and Management.” To
our knowledge, no director has advised that he intends to oppose the Amendment,
as more particularly described herein.
SECURITY
OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth information as of August 1, 2007 regarding the
beneficial ownership of our Common Stock, (a) each stockholder who is known
by
the Company to own beneficially in excess of 5% of our outstanding Common Stock;
(b) each director known to hold Common Stock; (c) the Company’s chief executive
officer; and (d) the executive officers and directors as a group. Except as
otherwise indicated, all persons listed below have (i) sole voting power and
investment power with respect to their shares of Common Stock, except to the
extent that authority is shared by spouses under applicable law, and (ii) record
and beneficial ownership with respect to their shares of stock. The percentage
of beneficial ownership is based upon 24,215,518 shares of Common Stock
outstanding as of August 1, 2007. Unless otherwise identified, the address
of
the directors, officers and 5% beneficial owners of the Company listed above
is
Tang Xing Shu Ma Building, Suite 418, Tang Xing Road, Xian, Shaanxi Province,
China.
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Name
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Amount
and Nature of Beneficial Ownership
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Common
Shares
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Number
of Shares
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Percent
of Class
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Officer
and Directors
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Qinan
Ji, CEO and Director
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5,931,596
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24.5%
(1)
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Zhiqiang
Wang, Director
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0
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0%
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Xiaogang
Zhu, CFO
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0
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0%
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James
Garner, Director
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0
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0%
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All
Officers and Directors as a Group (four persons)
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5,931,596
(1)
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24.5%
(1)
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5%
Beneficial Owners
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Xiang
Ji
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1,456,232
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6.0%
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Xian
Sunway Technology & Industry Co. Ltd.
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2,875,364
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11.9%
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Yangling
Bodisen Biotech Development Co. Ltd.
c/o
New York Global Group, Inc.
14
Wall Street, 12th
Floor
New
York, NY 10005
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2,063,768
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8.5%
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(1) Of
which
2,875,364 shares are owned by Xian Sunway Technology & Industry Co., Ltd.
Qinan Ji owns 42.1% of Xian Sunway and may be deemed to beneficially own such
shares.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT US
China
Natural Gas, Inc. is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith files reports and other
information with the Securities and Exchange Commission. Such reports and other
information and a copy of the registration statement and the exhibits and
schedules that were filed with the registration statement may be inspected
without charge at the public reference facilities maintained by the SEC in
100 F
Street, N.E., Washington, D.C. 20549. Statements made in this prospectus
regarding the contents of any contract, agreement or other document that is
filed as an exhibit to the registration statement are not necessarily complete,
and we refer you to the full text of the contract or other document filed as
an
exhibit to the registration statement. Copies of all or any part of the
registration statement may be obtained from the SEC upon payment of the
prescribed fee. Information regarding the operation of the public reference
rooms may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains
a
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http://www.sec.gov.
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CHINA
NATURAL GAS, INC.
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Dated:
September 21, 2007
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/s/ Qinan
Ji |
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Qinan
Ji
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Chief
Executive Officer
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EXHIBIT
A
CERTIFICATE
OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
CHINA
NATURAL GAS, INC.
The
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware does hereby certify:
FIRST: That
by
unanimous written consent of the Board of Directors of China Natural Gas, Inc.
(the “Corporation”) resolutions were duly adopted setting forth a proposed
amendment of the Corporation’s Certificate of Incorporation, declaring said
amendment to be advisable and requesting a majority of the stockholders of
the
Corporation to give their consent in writing thereto. The resolutions setting
forth the proposed amendment is as follows:
RESOLVED,
that
Article FOURTH of the Certificate of Incorporation of China Natural Gas, Inc.
be
amended and restated to read as follows:
“The
authorized capital stock of the Corporation shall consist of 45,000,000 shares
of common stock, $0.0001 par value, and 5,000,000 shares of preferred stock,
$0.0001 par value.”
SECOND:
That
thereafter, pursuant to resolution of its Board of Directors, a majority of
the
stockholders of said corporation gave their consent in writing to the preceding
resolutions in lieu of meeting of stockholders pursuant to Section 228 of the
General Corporation Law of the State of Delaware.
THIRD:
That
said
amendments were duly adopted in accordance with the provisions of Section 242
of
the General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
Certificate of Incorporation to be signed this ____ day of ___________, 2007.
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By: |
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Qinan
Ji, Chief Executive Officer
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