SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHNAGE ACT OF 1934
[ ] FILED BY REGISTRANT
[ ] FILED BY A PARTY OTHER THAN THE REGISTRANT
CHECK THE APPROPRIATE BOX:
[X] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)
(2))
[ ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL UNDER RULE 14A-12
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULE 14C-5(G) AND 0-11
(i) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
________
(ii) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES: _______
(iii) PER UNIT PRICE OF OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11. (SEC FORTH THE AMOUNT ON WHICH
THE FILING IS CALCULATED AND STATE HOW IT WAS DETERMINED):__________
(iv) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:_______ (V) TOTAL
FEE PAID: _____ [ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE
ACT RULE 0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING
FEE WAS PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION
STATEMENT NUMBER OF THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
(i) AMOUNT PREVIOUSLY PAID:______
(ii) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:_______
(iii) FILING PARTY:__________ (IV) DATE FILED:____________
XINHUA CHINA LTD.
_________________
(Name of registrant as specified in its charter)
NEVADA 000-33195 88-0437644
______ _________ __________
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
B-26F, ORIENTAL KENZO DONGCHENG DISTRICT
BEIJING 100027
PEOPLE'S REPUBLIC OF CHINA 100027
________________________________________ ______
(Address of principal executive offices) (Zip Code)
(86-10-64168816
_______________
Telephone number, including area code
XINHUA CHINA LTD.
PROXY STATEMENT
DATED DECEMBER 29, 2009
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 3, 2010
Notice is hereby given that a Special Meeting of the Shareholders (the
"Meeting") of Xinhua China Ltd., a Nevada corporation, will be held at 2:00 p.m.
on Wednesday, February 3, 2010 at B-26F, Oriental Kenzo Dongcheng District,
Beijing 10027, People's Republic of China, and any adjournments or postponements
thereof (the "Special Meeting") for the following purposes:
1. To elect the following pne (1) person to serve as directors of the
Board of Directors of the Company until his successor shall have
been elected and qualiied: Xianping Wang.
2. To approve an amendment to the Articles of Incorporation, as
amended, to increase the authorized shares of common stock from
500,000,000 shares to 2,000,000,000 shares, par value $0.00001; and
3. To consider and act upon such other business as may properly come
before the Special Meeting or any adjournment thereof.
Our voting securities consist of shares of common stock, with a par value of
$0.00001 (the "Common Stock"). Shareholders of record at the close of business
on December 28, 2009 are entitled to vote at the meeting. There were 499,911,400
shares of common stock issued and outstanding on the record date. Each share has
one vote on any matter to be acted upon at the meeting. A quorum for the
transaction of business is a majority of the shares entitled to vote. Each
matter to be acted upon at the meeting will be approved if the votes "for" are
greater than the votes "against." Abstentions and "broker non-votes" are counted
in determining a quorum. They are not counted "for" or "against" any matter.
There are no dissenters' rights of appraisal with respect to the matters to be
acted upon at the meeting.
We will conduct this proxy solicitation initially by mailing notice and then by
making materials available at our designated website unless you request a paper
or e-mail copy. This proxy statement and form of proxy will be first sent or
given to shareholders on or about January 14, 2010. Proxies may also be
solicited personally, by mail, e-mail or telephone. We will pay the expenses of
the proxy solicitation, including the cost of preparing, assembling and mailing
the material and making them electronically available. Directors, officers and
regular employees may solicit proxies and will not receive additional
compensation for soliciting. No specially engaged employees, representatives or
other persons have been or are to be employed to solicit proxies. We will
request banks and brokers to forward material to their customers who
beneficially own shares held of record in nominee name and will reimburse the
banks and brokers for reasonable out-of-pocket expenses.
The matters to be acted upon at the meeting are listed in the preceding notice
and more fully discussed below under the caption "Matters to be Acted Upon."
Please note that throughout this Proxy Statement, and unless otherwise noted,
the words "we," "our," "us," the "Company," or "Xinhua China," refers to Xinhua
China Ltd.
By Order of the Board of Directors
/s/ XIANPING WANG
_______________________________
Xianping Wang, President
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT. All of our directors hold office until the
next annual general meeting of the shareholders or until their successors are
elected and qualified. Our officers are appointed by our board of directors and
hold office until their earlier death, retirement, resignation or removal.
Our directors and executive officers, their ages and positions held are as
follows:
NAME AGE POSITION WITH THE COMPANY
Xianping Wang 49 President, Chief Executive
Officer/Secretary/Treasurer/Chief Financial
Officer and a Director
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience of
each director, executive officer and key employee during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he or she was employed,
and including other directorships held in reporting companies.
XIANPING WANG. Mr. Wang has been one of our directors since August 5, 2004 and
has been our President and Chief Executive Officer since September 4, 2004. He
has been our Chief Financial Officer since August 7, 2007. In addition, Mr. Wang
is the President of Asia-Durable (Beijing) Investments Co., Ltd. from 2002 to
2004, which is a company that has successfully invested in construction and
development projects as well as biotechnology research. From 1997 to 2002, Mr.
Wang was the President of Beijing New Fortune Investment Co., Ltd., which is a
company that has invested in real estate and other profitable projects such as
Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology Co., Ltd. Mr.
Wang helped Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology
Co., Ltd. to become publicly listed companies on Chinese stock markets in
Shanghai and Shenzhen. Mr. Wang received an Engineering Bachelor Degree from
Navy Engineering Institute in 1978 and an Economics Master Degree from Tsinghua
University in 1990.
FAMILY RELATIONSHIPS
There are no family relationships among our directors or officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years, none of our directors, executive officers or persons
that may be deemed promoters is or have been involved in any legal proceeding
concerning: (i) any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time; (ii) any conviction in
a criminal proceeding or being subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses); (iii) being subject to
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction permanently or temporarily enjoining,
barring, suspending or otherwise limiting involvement in any type of business,
securities or banking activity; or (iv) being found by a court, the Securities
and Exchange Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law (and the judgment has
not been reversed, suspended or vacated).
-2-
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE
As of the date of this Proxy Statement, we do not have any members on our audit
committee. We have not appointed additional members to the Board of Directors
and, therefore, the respective role of an audit committee has been conducted by
our Board of Directors. When new members are to be appointed to the audit
committee, the audit committee's primary function will be to provide advice with
respect to our financial matters and to assist our board of directors in
fulfilling its oversight responsibilities regarding finance, accounting, and
legal compliance. The audit committee's primary duties and responsibilities will
be to: (i) serve as an independent and objective party to monitor our financial
reporting process and internal control system; (ii) review and appraise the
audit efforts of our independent accountants; (iii) evaluate our quarterly
financial performance as well as our compliance with laws and regulations; (iv)
oversee management's establishment and enforcement of financial policies and
business practices; and (v) provide an open avenue of communication among the
independent accountants, management and the board of directors.
Our Board of Directors has considered whether the provision of such non-audit
services would be compatible with maintaining the principal independent
accountant's independence. Our Board of Directors considered whether our
principal independent accountant was independent, and concluded that the auditor
for the fiscal year ended June 30, 2009 was independent. CODE OF ETHICS
We have adopted a corporate code of ethics. We believe our code of ethics is
reasonably designed to deter wrongdoing and promote honest and ethical conduct;
provide full, fair, accurate, timely and understandable disclosure in public
reports; comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code.
DISCLOSURE COMMITTEE AND CHARTER
We have a disclosure committee and disclosure committee charter. Our disclosure
committee is comprised of our officers and directors. The purpose of the
committee is to provide assistance to the Chief Executive Officer and the Chief
Financial Officer in fulfilling their responsibilities regarding the
identification and disclosure of material information about us and the accuracy,
completeness and timeliness of our financial reports.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires our directors and officers, and the
persons who beneficially own more than ten percent of our common stock, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of all filed reports are required to be furnished to us
pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the
reports received by us and on the representations of the reporting persons, we
believe that these persons have complied with all applicable filing requirements
during the fiscal year ended June 30, 2009.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to our Chief Executive
Officer and those executive officers that earned in excess of $100,000 during
fiscal years ended December 31, 2008 and 2007 and 2006 (collectively, the "Named
Executive Officers"):
-3-
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
(A) (B) (C) (D) (E) (F) (G) (H) (I)
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
Xianping Wang (1) 2009 120,000 0 0\ 0 0 0 0
President, CEO and 2008 120,000 0 0 0 0 0 0
Director 2007 120,000 0 0 0 0 0 0
Clement Wu (3)
CFO, Secretary, Treasurer 2008 -0- 0 0 0 0 0 0
and Director 2007 45,231 0 0 0 150,000 0 0
Peter Shandro (5)
VP Business Strategy and 2008 -0- 0 0 0 0 0 0
Director 2007 71,121 0 0 0 0 0 0
(1) Mr. Xianping Wang was appointed as a director on August 5, 2004 and as our
President and Chief Executive Officer on September 4, 2004.
(2) Mr. Xianping Wang was to receive $10,000 per month starting Feb. 2005.
However, this amount has been accrued by Mr. Wang. Therefore, for the fiscal
years ended June 30, 2009, 2008 and 2007, we have outstanding obligations of
$120,000 owing to Mr. Wang for each year.
(3) Mr. Clement Wu was appointed a director and our Chief Financial Officer on
January 1, 2006 and as our Secretary and Treasurer on May 19, 2006. Mr. Wu
resigned as a director and as our Chief Financial Officer on August 6, 2007.
(4) Mr. Clement received $5,938 per month starting on January 1, 2006 and
received a total of $45,231as compensation for the fiscal year ended June 30,
2007.
(5) Mr. Peter Shandro was appointed a director on September 3, 2004 and as our
Vice-President for Business Strategy on April 1, 2006. Mr. Shandro resigned from
both positions on August 1, 2007.
(6) Mr. Peter Shandro received a total of $71,121 as compensation for the fiscal
year ended June 30, 2007.
No long term incentive plan awards were made to any executive officer during the
fiscal years ended June 30, 2009 and June 30, 2008.
Our officers and directors may be reimbursed for any out-of-pocket expenses
incurred by them on our behalf. As of the date of this Annual Report, none of
our officers or directors are a party to employment agreements with us. We
presently have no pension, health, annuity, insurance, profit sharing or similar
benefit plans.
There were no formal arrangements under which our directors were compensated by
us during the most recently completed fiscal year for their services solely as
directors.
-4-
STOCK OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2008
The following table sets forth information as at June 30, 2009 relating to
options that have been granted to the Named Executive Officers during fiscal
year ended June 30, 2009:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS STOCK AWARDS
Equity
Equity Incentive
Incentive Plan Awards:
Market Plan Awards: Market or
Equity Value of Number of Payout Value
Number of Number of Incentive Plan Number of Shares Unearned of Unearned
Securities Securities Awards: Number Shares or or Units Shares, Units Shares, Units
Underlying Underlying of Securities Units of of Stock or Other or Other
Unexercised Unexercised Underlying Option Stock That That Rights That Rights That
Options Options Unexercised Exercise Option Have Not Have Not Have Not Have Not
Exercisable Unexercisable Unearned Options Price Expiration Vested Vested Vested Vested
Name (#) (#) (#) ($) Date (#) ($) (#) (#)
Xianping Wang,
Chief Executive
Officer/President -0- -0- -0- -- -- -- -- -0- -0-
Clement Wu, prior
Chief Financial
Officer/Treasurer -0- -0- -0- -- -- -- -- -0- -0-
The following table sets forth information relating to compensation paid to our
directors during fiscal year ended June 30, 2009:
DIRECTOR COMPENSATION TABLE
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned or Incentive Deferred All
Paid in Stock Option Plan Compensation Other
Cash Awards Awards Compensation Earnings Compensation Total
Name ($) ($) ($) ($) ($) ($) ($)
Xianping Wang -0- -0- -0- -0- -0- -0- -0-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
As of the date of this Proxy Statement, the following table sets forth certain
information with respect to the beneficial ownership of our common stock by each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock and by each of our current directors and executive officers. Each person
has sole voting and investment power with respect to the shares of common stock,
-5-
except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated. As of the
date of this Proxy Statement, there are 499,911,400 shares of common stock
issued and outstanding.
AMOUNT AND
NAME OF BENEFICIAL NATURE OF PERCENT
OWNER BENEFICIAL OWNER POSITION OF CLASS
Xianping Wang 2,500,000(1) President, Chief Executive Officer Nil
B-26F Oriental Kenzo, No. 48 /Chief Financial Officer and a director
Dongzhimenwai, Dongcheng
District, Beijing, China
ALL OFFICERS AND DIRECTORS AS 2,500,000 (1) Nil
A GROUP (1 PERSON)
(1) These are restricted shares of common stock. Under Rule 13d-3, a beneficial
owner of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares:
(i) voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or direct
the disposition of shares. Certain shares may be deemed to be beneficially owned
by more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which
the information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in this table does not necessarily reflect the person's
actual ownership or voting power with respect to the number of shares of common
stock actually outstanding as of the date of this Proxy Statement. As of the
date of this Proxy Statement, there are 490,311,400 shares issued and
outstanding.
CHANGES IN CONTROL
We are unaware of any contract, or other arrangement or provision, the operation
of which may at a subsequent date result in a change of control of our company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
None of our directors, officers or principal stockholders, nor any associate or
affiliate of the foregoing, have any interest, direct or indirect, in any
transaction to the date of this Proxy Statement, or in any proposed
transactions, which has materially affected or will materially affect us.
It is possible, however, that debts owed to Mr. Wang, our President/Chief
Executive Officer and sole director, could be demanded and cause us serious harm
if we are unable to pay and must settle in some manner. The aggregate amount
owed to Mr. Wang up to June 30, 2009 is $5,945,061 (not including his salary of
$120,000 in 2009 and 2008 which remains accrued and unpaid). The shareholders
loan is interest free, but the loan accrues interest at the rate of 6% annually
and has been recorded as additional paid in capital. Adjustments, conversions or
other action could be taken as to his debt, including the recent conversion of
$12,500.00 into 125,000,000 shares of common stock by the Assignee. Moreover,
Mr. Wang was to receive $10,000 per month starting Feb. 2005. However, this
amount has been accrued and is due and owing to Mr. Wang. Therefore, for fiscal
years ended June 30, 2009, June 30, 2008 and June 30, 2007, we have outstanding
obligations of $120,000 owing to Mr. Wang.
PRINCIPAL ACCOUNTING FEES AND SERVICES
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The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for our audit of annual financial
statements for fiscal year ended June 30, 2009 and review of our financial
statements for quarters ended September 30, 2008, December 31, 2008 and March
31, 2009 or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements for those fiscal years was
$50,000 to Wong & Co.
The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for our audit of annual financial
statements for fiscal year ended June 30, 2008 and review of our financial
statements for quarters ended September 30, 2007, December 31, 2007 and March
31, 2008 or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements for those fiscal years was
$55,000 to Wong & Co.
AUDIT RELATED FEES
The aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported in the preceding paragraph was $-0- to Wong & Co.
TAX FEES
The aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was $-0- to Wong & Co.
ALL OTHER FEES
The aggregate fees billed in each of the last two fiscal years for the products
and services provided by the principal accountant, other than the services
reported in paragraphs (1), (2), and (3) was $-0- to Wong & Co.
When existing , our audit committee's pre-approval policies and procedures
described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the
audit committee pre-approve all accounting related activities prior to the
performance of any services by any accountant or auditor.
The percentage of hours expended on the principal accountant's engagement to
audit our financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant's
full time, permanent employees was 0%.
MATTERS TO BE ACTED UPON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Our Bylaws provide authorization to the Board of Directors of the Company to fix
from time to time by resolution that number of directors of the Company.
Directors hold office until their respective successors are elected and
qualified or until their earlier death, resignation or removal. The Board of
Directors intends to appoint the following nominee for director. It is intended
that the proxies solicited hereby will be voted "for" election of the following
nominee unless otherwise specified: Xianping Wang. Mr. Wang is currently a
member of the Board of Directors. For a description of his background and
experience, including his principal occupations during the past five years and
the name and principal business in which such occupations were carried on, and
the nominating process, please refer to Directors and Executive Officers;
Corporate Governance.
-7-
PROPOSAL 2. APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE OUR
AUTHORIZED CAPITAL FROM 500,000,000 TO 2,000,000,000,000 SHARES OF $0.00001 PAR
VALUE COMMON STOCK.
Our Board of Directors approved an amendment to our Articles of Incorporation to
increase our authorized capital from 500,000,000 shares of common stock to
2,000,000,000 shares of common stock. The full text of the Amendment to the
Articles of Incorporation is attached to this Proxy Statement as Exhibit A.
REASONS FOR PROPOSAL
Our Board of Directors believes that the amendment is in the best interests of
our stockholders and us. We believe that the increase is necessary so that we
will have a sufficient number of authorized shares to meet our obligations to
issue additional shares and for future contingencies. The increase in authorized
capital may also be necessary in order to have sufficient shares to issue upon
conversion of notes, exercise of warrants and options.
As of the date of this Proxy Statement, we do not have any specific plans to
issue common stock other than to issue common stock in accordance with private
placement offerings for financing purposes and upon the conversion of notes and
the exercise of warrants as discussed below.
FORBEARANCE AND SETTLEMENT AGREEMENT
Effective December 29, 2006, we entered into a forbearance and settlement (the
"Forbearance and Settlement Agreement") with Cornell Capital Partners, L.P.
("Cornell") and Highgate House Funds, Ltd. ("Highgate"). In accordance with the
terms and provisions of the Forbearance and Settlement Agreement, we agreed to
make certain payments to Cornell and Highgate with respect to the securities
purchase agreement dated November 23, 2005, as amended on March 23, 2006 (the
"Securities Purchase Agreement") previously entered into with Cornell and
Highgate, and the two convertible debentures in the amounts of $1,250,000 to
Highgate dated November 23, 2005 and $2,000,000 to Cornell dated March 23, 2006
(collectively, the "Convertible Debentures") in accordance with the terms and
conditions set forth in the Forbearance and Settlement Agreement.
In further accordance with the Forbearance and Settlement Agreement, we agreed
to use the proceeds from the disposal of Beijing Boheng to repay the principal
and interest due to Cornell and Highgate under the Convertible Debentures in
exchange for the agreement of Cornell and Highgate to: (i) waive on a one-time
basis only any accrued liquidated damages owing to Cornell and Highgate; (ii) no
application of the redemption premium on the scheduled repayments; (iii)
conversion of the Convertible Debentures in an amount equal to at least the
amount of a scheduled repayment subject to certain conditions; (iv) no
additional liquidated damages accruing during the term of the Forbearance and
Settlement Agreement; (v) permitting us to withdraw the registration statement
filed on March 28, 2006 with the Securities and Exchange Commission in
connection with the Convertible Debentures; (vi) during the term of the
Forbearance and Settlement Agreement, waiving the requirement for us to receive
written consent of Cornell and Highgate for any organizational change (as
defined in the Securities Purchase Agreement) to be directly or indirectly
consummated by us, and that we will not effectuate any stock splits for at least
nine months without the consent of Cornell and Highgate; and (vii) terminating
the provisions for security shares as set forth in Section 9 of the Securities
Purchase Agreement and in Section 2 of the transfer agent instructions upon
receipt by Cornell and Highgate of the first scheduled repayment amount.
The payment plan under the Forbearance and Settlement Agreement is as follows:
CONVERSION OF
PAYMENT DATE CASH PAYMENT DEBENTURE
March 10, 2007 $ 250,000 250,000
June 30, 2007 375,000 375,000
October 31, 2007 375,000 375,000
January 31, 2008 250,000 250,000
July 31, 2008 625,000 625,000
___________________ ______________________
$ 1,875,000 1,875,000
=================== ======================
-8-
As of June 30, 2007, we paid $250,000 for the payment due March 10, 2007 and
issued 100,000 shares and 125,000 shares of our common stock on March 1, 2007
and April 18, 2007, respectively, pursuant to exercise rights. In addition,
Highgate shall exercise its rights to purchase warrant shares pursuant to the
Warrant issued to it under the Securities Purchase Agreement on a cashless
basis. During fiscal years ended June 30, 2009 and June 30, 2008, Cornell and
Highgate converted an aggregate of 266,655,668 and 44,016,843 shares,
respectively, against the outstanding amount at a total conversion price of
$144,532 and $152,200, respectively.
INTEREST OF MANAGEMENT IN THE AMENDMENT TO THE ARTICLES OF INCORPORATION
Other than as described herein regarding the debt due and owing to Mr. Wang,
management does not have any other direct or indirect material interest in the
proposed Amendment to the Articles of Incorporation.
PROPOSED CHANGES IN AUTHORIZED CAPITAL
Under the Amendment to the Articles of Incorporation, our authorized capital
stock will be 2,000,000,000 shares of common stock, with a par value of $0.0001.
Our authorized capital currently consists of 500,000,000 shares of common stock.
Shares of common stock may be issued from time to time as the Board of Directors
may determine. Holders of common stock will be entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefor after any applicable requirements with respect to
preferential dividends have been met. In the event of liquidation, holders of
common stock will be entitled to a proportionate share in any distribution of
our assets after the payment of liabilities and after distribution in full of
preferential amounts, if any. Holders of common stock will not have preemptive
rights. Each share of common stock will be entitled to one vote, and cumulative
voting will not be permitted in the election of directors.
A quorum for the transaction of business at any meeting of the stockholders will
be a majority of the shares entitled to vote. The affirmative vote of the
holders of at least a majority of the shares voted at a meeting of the
stockholders at which a quorum is present will constitute stockholder approval
of matters to be acted upon by the stockholders. However, in the case of a sale
or other transfer of substantially all our assets, liquidation, merger,
consolidation, reorganization, or similar type of extraordinary corporate
transaction with a beneficial owner of 10% or more of such shares, the
affirmative vote of two-thirds of the shares entitled to vote thereon will
constitute approval unless such transaction is with an affiliate or subsidiary,
or the transaction is approved by the affirmative vote of a majority of our
continuing directors. Continuing directors will be those directors who were our
directors prior to the beneficial owner of 10% or more becoming a beneficial
owner or affiliate, or who are designated continuing directors prior to or at
their first election as directors.
Stockholders may act by written consent of a majority of the shares entitled to
vote, subject to any greater voting requirements as set forth above.
OTHER MATTERS
Our Board of Directors knows of no other matters to be acted upon at the
meeting. However, if other matters should come before the Special Meeting, it is
the intention of the proxies to vote each proxy in their discretion on such
matters.
-9-
ANNUAL REPORT
Our annual report filed with the Securities and Exchange Commission on Form 10-K
for the year ended June 30, 2009, which includes audited financial statements
and financial statement schedules, is included in the proxy and deemed to be a
part of the proxy soliciting material. All of our reports filed pursuant to the
Securities Exchange Act of 1934 together with the exhibits thereto are available
without charge on the database of the Securities and Exchange Commission at
www.sec.gov/edgar.
STOCKHOLDER PROPOSALS FOR THE NEXT SPECIAL MEETING
Under Rule 14a-8 of the Securities and Exchange Commission, proposals by
stockholders intended for inclusion in our Proxy Statement at our next Special
Meeting must be received by January 29, 2010 in order to be considered for
inclusion in our proxy materials. Proposals must be addressed to President,
Xinhua China Ltd., B-26F, Oriental Kenzo Dongcheng District, Beijing, People's
Republic of China 100027. Under Rule 14a-4 of the Securities and Exchange
Commission, for all other proposals by stockholders to be timely, a
stockholder's notice must be delivered to, or mailed and received at, our
principal executive offices not later than February 1, 2010. If a stockholder
fails to so notify us of any such proposal prior to such date, management will
be allowed to use their discretionary voting authority with respect to proxies
held by management if the proposal is raised at the Special Meeting, without any
discussion of the matter in our Proxy Statement.
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EXHIBIT A
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
XINHUA CHINA LTD.
Pursuant to the provisions of the Nevada Revised Statutes, as amended, the
undersigned corporation enacts the following Amendment to the Articles of
Incorporation:
1. The name of the corporation is:
XINHUA CHINA LTD.
2. The following amendment to the Articles of Incorporation was approved by the
directors on the 28th day of December, 2009.
o Article Fourth of the Articles of Incorporation shall be deleted in its
entirety and Article Fouth shall be as follows:
"The aggregate number of share of all classes of shares which
the Corporation shall have authority to issue is 2,000,000,000 shares
of common stock, $0.00001 par value."
3. The number of shares outstanding at the time of the adoption of the amendment
was 499,911,400 shares of common stock. The total number of shares voting in
favor of such amendment was _______.
4. The effective date of this Amendment to the Articles of Incorporation shall
be upon filing.
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XINHUA CHINA LTD.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Xinhua China Ltd. (the "Company") hereby
constitutes and appoints Xianping Wang with power of substitution, as proxy (the
"Proxy") to represent the undersigned at the Special Meeting of stockholders of
the Company to be held at 2:00 p.m., on Wednesday, February 3, 2010 at the
Company's offices, B-26F, Oriental Kenzo Dongcheng District, Beijing, People's
Republic of China 100027 and at any adjournment(s) thereof (the "Meeting"), and
to vote the number of shares the undersigned would be entitled to vote if
present in person as specified on the following matters and otherwise in their
discretion.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTOR NOMINEE AND
FOR THE APPROVAL OF PROPOSALS 1 AND 2.
1. To elect a director to the Company's Board of Directors as follows:
[ ] FOR the nominee listed below, except "WITHHOLD AUTHORITY" as to
Xianping Wang
Note: To withhold authority to vote for a nominee, strike out the nominee's
name. If you do not strike out the name your proxy will be voted "for" each
nominee above.
2. To approve the Amendment to the Articles of Incorporation to increase our
authorized common stock to 2,000,000,000 shares of common stock, par value
$0.00001.
[ ] FOR approval [ ] AGAINST approval [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. YOU MAY REVOKE THE PROXY
BEFORE IT IS VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY, BY
ISSUING A LATER PROXY, OR BY VOTING IN PERSON AT THE SPECIAL MEETING.
Please mark, date, sign and return this proxy as soon as possible in the
enclosed envelope. For a corporation, limited liability company, partnership,
attorney-in-fact, executor, administrator, trustee, guardian and the like,
please indicate the capacity in which you are authorized to vote on behalf of
the other person or entity, as the case may be. For joint tenants, both should
please sign.
Please sign below
X
____________________________________________________
Please indicate signature capacity below -Or- Other joint tenant please sign
below
X
____________________________________________________
Please date: __________________
[ ] PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING.
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